Dubai: Abu Dhabi provided further details on the emirate’s newly announced rental freeze, confirming on Wednesday that the annual rental increase cap has been temporarily removed while setting out how rents will be calculated during the period.The rental increase percentage was updated from 5% to 0% per annum on residential, commercial, and industrial properties across the Emirate for a temporary short period and until further notice, the Abu Dhabi Real Estate Centre (ADREC) said in a statement on Wednesday.How rent will now be decidedThe update also clarifies how rental values will be determined while the policy remains in force. According to the government, all lease renewals and new agreements must reference the rental value recorded in the property's most recent registered Tawtheeq contract, effectively preventing rent increases linked to contract renewals."All lease renewals and new agreements will reference the rental rate from the property's last registered Tawtheeq contract,” said ADREC, who will also oversee coordinated implementation and compliance and engage with all relevant stakeholders throughout the period to ensure the directive is upheld across the Emirate.“Tenants and businesses who believe the directive is not being observed are encouraged to contact ADREC through its official channels: the website adrec.gov.ae, the Centre's dedicated customer service line, and the official email address,” it added.Why the rent freeze was announcedThe temporary measure has been introduced as Abu Dhabi's rental market continues to experience strong demand and limited supply, ADREC said in a statement, adding that occupancy rates have reached record highs in recent years, with demand consistently exceeding available housing stock.The pressure has translated into higher rents across the market. New lease prices have risen by 15% across Abu Dhabi over the past year and by 23% in investment zones, the government figures indicated."With demand consistently exceeding supply over the past few years, occupancy rates have reached record highs. This demand has driven new lease prices up 15% across Abu Dhabi and 23% in investment zones compared to last year, impacting housing continuity for many residents," it said. For tenants, the latest update essentially provides clearer guidance on what the rental freeze means in practice. Residents renewing their leases should not face any increase in rent while the measure remains in effect, while businesses renewing commercial leases will receive the same protection.Justin is a personal finance author and seasoned business journalist with over a decade of experience. He makes it his mission to break down complex financial topics and make them clear, relatable, and relevant—helping everyday readers navigate today’s economy with confidence.