Increasing rents in Abu Dhabi are giving a boost to more affordable areas of the city, according to a report by CBRE.

Average rents in the city rise by 3% in the last quarter of 2014, the consultancy firm said, marking a 17% year-on-year increase.

Despite the pace of increase cooling, higher prices are still pushing residents out to cheaper areas of the city, CBRE said in its ‘Q4 2104 Abu Dhabi MarketView’ report.

“As the cost of living has risen over the past 12 months, there has been a more noticeable increase in demand for low to middle income units and also for non-prime areas of the capital. This in turn has driven rental growth in more affordable locations as a flight to quality continues,” said Mat Green, head of research and consultancy for the UAE at CBRE Middle East.

Residential properties situated on the outskirts of the city “have continued to gain popularity, principally due to affordability reasons”, CBRE said. “With sustained rental growth in central city locations, housing units situated in areas such as Khalifa City A & B, Mohammed bin Zayed City and Mussafah have become viable alternatives for price-conscious residents.”

Annual rents for a four bedroom villa in prime areas of Abu Dhabi are as high as AED350,000 a year, CBRE said. But similar residences in off-island locations are currently being rented for as little as AED140,000.

A separate report by consultancy firm JLL, published last month, said there was no increase in the value of residential property during the fourth quarter of 2014.