Image credit: Cavendish Maxwell Report
Abu Dhabi’s residential market maintained its growth momentum in Q2 2025, with average prices rising by 6.4 per cent quarter-on-quarter to Dhs 1,230 per square foot, according to global property consultancy Knight Frank’s latest Abu Dhabi Residential Market Review.
This brings the emirate’s total annual growth to 17.3 per cent, and represents a 31.3 per cent increase in values since Q1 2020.
Read-Abu Dhabi real estate market surges 39% in H1 2025
Apartments outperformed other segments during the quarter, with values jumping 6.8 per cent to Dhs 1,296 per square foot. On a year-on-year basis, this marks a 17.3 per cent increase, placing current values 28.7 per cent above Q1 2020 levels.
Al Raha Beach emerged as the top-performing area, registering 11 per cent price growth since H1 2024. Saadiyat Island followed closely at 10 per cent. Both locations are popular for their prime beachfront living and proximity to leisure destinations, especially Yas Island.
Villas show strong long-term gains
Villas posted a 3.4 per cent quarter-on-quarter increase in Q2 2025, reaching Dhs 1,103 per square foot. This reflects a substantial 42.3 per cent increase since Q1 2020. Saadiyat Island villas led the charge with a 28 per cent year-on-year price surge, while Yas Island villas followed with a 22 per cent rise.
Faisal Durrani, partner – head of research, MENA at Knight Frank, noted: “Villas have delivered 35 per cent growth over the last five years. Despite strong demand, villas make up just 37.4 per cent of the supply pipeline, the rest being apartments. With average villa prices at around Dhs 1,100 per square foot, nearly half the price of villas in Dubai, Abu Dhabi is viewed as better value, especially for families.”
Future supply and development pipeline
The market is struggling to match increasing demand. Residential transactions totalled Dhs 9 billion during H1 2025, which is 36 per cent lower than H1 2024, suggesting a supply lag despite high interest.
Only 890 new residential units were delivered in 2025 so far. However, Knight Frank reports 33,074 homes under construction, scheduled for completion by 2029. Apartments make up 62 per cent of that pipeline.
Yas Island is the most active area for future supply, with more than 8,000 units in the pipeline, followed by Al Shamkha with approximately 3,000 units. Meanwhile, branded luxury residences on Saadiyat Island, including those by Mandarin Oriental and Nobu—are set to expand high-end offerings.
Will McKintosh, regional partner, head of Residential, MENA, said:
“There is growing interest from international buyers, thanks to Abu Dhabi’s world-class amenities and supportive business environment. Our data shows 7 per cent of buyers prefer off-plan homes, indicating demand for immediate-use properties.”
Global capital flows into Abu Dhabi
Knight Frank’s Destination Dubai 2025 report highlighted $1.6bn in private capital targeting Abu Dhabi’s residential real estate—making it the UAE’s second most popular investment hub after Dubai.
While Abu Dhabi trails Dubai’s $10.3bn, it offers average prices 30 per cent lower, appealing to both investors and homebuyers.
The report also shows growing interest from global high-net-worth individuals (HNWIs). About 19 per cent plan to purchase in 2025—up from 14 per cent in 2024. Demand is strongest among individuals worth $30–50m, with 75 per cent eyeing Abu Dhabi homes. Additionally, 65 per cent of individuals worth more than $50m plan to buy in the capital.
Among buyers with $1–5m, around 40 per cent plan to spend up to $2m on a home in Abu Dhabi. On the other end, a similar percentage of those worth over $20m aim to spend more than $80m, though this is less than Dubai’s focus on the “super-prime” segment.
Shehzad Jamal, partner, Strategy & Consulting, MENA, explained:
“About 63 per cent of HNWIs buy for personal use—as main residences, holiday homes, or for retirement. The rest are investing. For those priced out of Dubai, or looking to diversify, Abu Dhabi’s appeal is growing—supported by 17 per cent year-on-year residential price growth.”
Economic growth underpins property market
According to Cavendish Maxwell’s Q1 2025 report, Abu Dhabi’s economy grew 3.8 per cent year-on-year in 2024, hitting an all-time high of Dhs 1.2 trillion, based on Statistics Centre – Abu Dhabi (SCAD) data. The growth was led by a 6.2 per cent rise in the non-oil sector, which now accounts for 54.7 per cent of GDP.
The International Monetary Fund (IMF) projects even stronger growth: 4.2 per cent in 2025 and 5.8 per cent in 2026.
This macroeconomic momentum is fueling confidence in the real estate market, even as transactional volumes slowed slightly in early 2025 due to seasonality and fewer new launches. Still, Abu Dhabi recorded around 1,300 residential sales in Q1, driven largely by the ready property segment.
Demand set to outpace supply
Looking ahead, the outlook remains bullish. With about 11,900 new homes expected to be delivered in the remainder of 2025—and 7,000 more in 2026—supply will continue rising. But population growth, rising end-user demand, and government policies are likely to keep demand ahead of supply.
Government initiatives, like the Golden Visa and other long-term residency programmes, are attracting skilled professionals and global investors, driving sustained demand for quality homes.
The emirate’s broader strategy to grow knowledge-based industries is also helping solidify Abu Dhabi’s reputation as a desirable place to live, work, and invest.
