Abu Dhabi rents rose by just 1.75% in the second quarter of 2015, the slowest increase in two years, a CBRE report has found.

Despite the minimal quarter-on-quarter rise, rents are still about 10% higher than they were a year ago, the consultancy said.

Rents for luxury properties recorded year-on-year growth of 14%, and continue to outperform the wider residential market due to limited supply, CBRE found.

“As has been the case historically, there appears to be a renewed focus on the development of high-end residences, particularly within the Investment Zone areas, with less focus on much needed affordable homes,” said Mat Green, head of research and consultancy for the UAE at CBRE Middle East.

“This underlines a potential challenge for the wider market, with a continued mismatch between demographic trends and housing development,” he added.

Al Reef Downtown has emerged as one of the preferred communities in Abu Dhabi, CBRE said. Two-bedroom units in Al Reef Downtown rent for AED85,000–105,000 per annum, while three-bedroom units are in excess of AED115,000 per annum.