Property advice Updated 06.07.2026

Abu Dhabi freezes 5% rent increases - What property owners and tenants need to know

3 min read

If you've been renting an apartment, a shop, or a warehouse for that matter in Abu Dhabi, you can finally take a long, deep breath. With the property market heating up, the government has stepped in to look out for regular residents and local businesses, ensuring the city stays an affordable place to live and work

Rreezes annual rent increases in Abu Dhabi

The Abu Dhabi Real Estate Centre (ADREC) has just dropped the annual rent increase cap from 5% all the way down to a flat 0%. So in short, your rent is exactly where it is for now.

What just happened?

Before this directive, landlords under Abu Dhabi regulations were legally allowed to increase rents by up to 5% annually upon lease renewal, provided they gave proper notice.

That 5% allowance is completely frozen until further notice. Under the new and improved rules, all tenancy renewals must be processed with a 0% rent increase.

The government has left no room for grey areas. To ensure compliance, ADREC announced that all lease renewals and new agreements must reference the rental value recorded in the property's very last registered Tawtheeq contract (Abu Dhabi's official tenancy registration system).

Which properties are included?

Luxury apartments

The freeze isn't just for a select few luxury apartments; it is a sweeping policy that saves the core components of the city's infrastructure:

Residential properties: Apartments, villas and townhouses Commercial properties: Offices, retail outlets and storefronts Industrial properties: Warehouses and industrial facilities

There are only a couple of major changes to keep in mind. First, the law is not retroactive. If you negotiated and registered a lease increase just before the law went into effect on June 2, 2026, that contract unfortunately still stands. Secondly, the Abu Dhabi Global Market (ADGM) financial free zone on Al Maryah Island is exempt, as it operates under its own independent legal and regulatory framework.

Why the sudden intervention

Let's look at a bigger picture: Abu Dhabi's rental market has basically been bursting at the seams. Over the past couple of years, a massive wave of new residents and businesses moved into the city, causing the demand for space to quickly outpace what's actually available.

With occupancy rates hitting historic highs, prices really took a rise! ADREC's data shows that this supply-demand mismatch pushed prices for new open-market leases by an average of 15% across the capital, and a staggering 23% in hot investment zones over the last year alone. By dropping the cap down to 0%, the government is stepping to give families and corporate tenants some much-needed financial breathing room and stability during a pretty intense economic shift.

Our take: A welcome relief for tenants

For tenants and small business owners, this is an incredible win for peace of mind, allowing families and corporate tenants to budget without the looming dread of an expensive move.

For property owners and investors, it means a temporary cap on near-term rental growth. However, market experts aren’t panicking; capital values for Abu Dhabi real estate are still projected to rise heavily by 15-16% through the rest of 2026, proving the market's long-term fundamentals remain rock solid. Navigating these regulatory shifts smoothly requires expert guidance.

As specialist advisors, Benham and Reeves helps overseas investors and landlords stay compliant, restructure portfolios for maximum capital growth, and identify high-yield off-plan opportunities untouched by the freeze.

Leanne Ruscoe
About the Author
Leanne Ruscoe - Head of Middle East & Africa
Leanne is the Head of Middle East & Africa, specializing in UAE residential property with a strong foundation in financial services. She advises international clients on strategic property acquisitions, helping them secure homes across the UAE. Based in Dubai, Leanne works closely with global investors on long-term wealth growth and portfolio diversification through property.

by Leanne Ruscoe

circular logo

Benham and Reeves UAE

BRITISH OWNED & OPERATED

10 Countries
65+ Years
Contact us

Speak to a Benham & Reeves specialist for personalised UAE market advice.

Upcoming projects in UAE
Everly Place

Mohammed Bin Rashid (MBR) City, Dubai

The Yards-Arancia

City of Arabia, Dubai

Raw District

Downtown Jebel Ali

Hudayriyat Golf Estates

Hudayriyat Island, Abu Dhabi

Sobha City Abu Dhabi

Waterfront near Yas Island

Sign up to our newsletter

Latest news

July 1, 2026

A new era for Dubai real estate - Dubai Holding takes the helm as Emaar’s largest shareholder

If you've been closely watching Dubai's property market, you know it moves fast. But a massive new shift just...

June 18, 2026

The UAE property market shift - Inside the UAE's strategic 2026 real-estate surge

Mid-2026 has brought renewed acceleration to the UAE property market, but with a sharper edge. Today's growth...

June 16, 2026

What happens if you miss an off-plan property payment in the UAE?

Buying property in Dubai is a genuinely exciting move. The UAE market just keeps growing, which is why so many...

Dubai real estate investment guide

Dubai real estate investment guide

Download our free guide to real estate investment in Dubai. A comprehensive guide designed to facilitate your real estate purchase and get the best return on investment.