The Government of Abu Dhabi announced today that the annual rental increase percentage has been changed from 5% to 0% for residential, commercial and industrial properties across the emirate. The freeze applies for a short, undefined period and will remain in force until a new directive is issued. This temporary measure aims to create a predictable, people-centred environment where households and businesses can plan with confidence, addressing housing continuity concerns as demand continues to outpace supply.
What the rental cap change entails
The zero‑percent cap replaces the previous 5% ceiling that landlords could apply each year. All new lease agreements and renewals must reference the rent recorded in the property’s last registered Tawtheeq contract. By removing the annual hike, the measure seeks to give households and businesses a stable budgeting framework while the emirate manages a period of high occupancy rates.
Impact on lease prices
While the cap curtails future increases, the market has already seen lease prices climb 15% across Abu Dhabi and 23% in designated investment zones compared with the previous year. The surge reflects a period of strong demand that pushed occupancy rates to record levels. Officials hope the temporary freeze will temper further price acceleration and support long-term community attachment by stabilising a key component of the cost of living.
Role of ADREC in enforcement
The Abu Dhabi Real Estate Centre (ADREC) will coordinate implementation and monitor compliance throughout the emirate. ADREC, launched by the Department of Municipalities and Transport, will work with landlords, tenants and other stakeholders to ensure the directive is observed. The centre’s oversight includes regular checks and guidance for market participants as part of its broader mandate to increase transparency and support for residents and investors.
How tenants can report non‑compliance
Tenants or businesses who believe the rental‑cap rule is being ignored are urged to contact ADREC via its website, dedicated customer‑service line or official email address. The contact details are listed on the ADREC portal, providing a direct channel for complaints and queries regarding specific lease renewals.
Background on ADREC and DMT
The Department of Municipalities and Transport created ADREC to strengthen Abu Dhabi’s real estate ecosystem. ADREC’s strategy focuses on four pillars – real‑estate strategy, promotion, regulation and transaction management – to boost efficiency, transparency and support for residents, investors and professionals alike. This unified regulatory framework is designed to enhance oversight across the sector.
What to watch next
With the rental cap set at 0% "until further notice," the duration of this relief remains uncertain. The government has framed the move as a temporary step to foster economic resilience and sustainable growth. Market participants should monitor official channels for updates on when the standard percentage cap might be reinstated or adjusted.
