Abu Dhabi’s property market is entering a defining phase in 2025, with demand surging for ready homes amid constrained new supply, rising prices, and robust investor sentiment.
Official figures show that real estate transactions in the capital have already surpassed Dh61.1 billion so far this year through more than 16,800 deals, underscoring the resilience of the emirate’s housing sector.
The DARI platform, Abu Dhabi’s official digital real estate ecosystem, revealed that property sales accounted for Dh34.9 billion across 9,210 transactions, while mortgages added Dh23.1 billion through 7,399 deals. Usufruct contracts contributed Dh2.9 billion. Combining sales and mortgage activity, the overall value of real estate transactions has exceeded Dh67 billion across 21,123 deals.
This headline growth masks a profound shift in the composition of demand. Market reports from Cavendish Maxwell and ValuStrat highlight that buyers are increasingly focusing on ready villas and townhouses, fuelling secondary-market activity and pushing prices to multi-year highs. In the first half of 2025, ready villa and townhouse sales jumped 72 per cent year-on-year to their highest level since 2021, with roughly 2,300 completed-home transactions out of 3,300 total deals. The average transaction price rose to Dh2.5 million from Dh2.1 million a year earlier, reflecting both scarcity and sustained demand.
In sharp contrast, off-plan sales have stumbled. Cavendish Maxwell data shows off-plan volumes dropped nearly 70 per cent year-on-year and almost 50 per cent compared to the second half of 2024. Overall residential sales in H1 2025 totalled Dh8.9 billion across 3,300 transactions—a 33 per cent decline in value and 37 per cent fall in volume versus the same period last year. Analysts say the shift is largely due to limited new launches and buyers’ preference for immediate occupancy in an environment where population growth and job creation are buoyant.
ValuStrat’s Q2 2025 “Real Estate Review” confirms the upward trajectory in values and rents. Its Price Index climbed 8.1 per cent year-on-year to 128.3 points, with villas leading the rally — up more than 10 per cent annually. Apartment prices also advanced, though more modestly, rising nearly 6 per cent year-on-year. On the rental side, residential rents jumped almost 10 per cent annually, with apartment rents soaring 12.5 per cent—the fastest pace in years. Villa rents climbed 7 per cent. Rising rental yields are further supporting investor appetite for ready homes, particularly in family-oriented communities.
The scarcity of off-plan supply underpins this dynamic. Only 2,400 units were delivered in the first half of 2025, with another 10,400 expected before year-end and 11,000 in 2026. Analysts say this pipeline may be insufficient to meet growing demand, particularly given Abu Dhabi’s rising population and the government’s Vision 2030 focus on diversification, infrastructure development, and long-term residency initiatives. CBRE’s latest market update notes that residential rents are climbing in step, with apartments up 5.5 per cent and villas 6.3 per cent in H1 2025, further boosting yields for landlords.
The tilt toward ready homes is most visible in prime communities. Yas Island villas saw price gains of more than 15 per cent year-on-year in Q1 2025, with Al Reef and Saadiyat Island also recording strong appreciation. Mortgage activity reflects the same shift: lending for villas and townhouses surged nearly 60 per cent from a year earlier, while mortgage uptake for apartments declined. Analysts argue this shows buyers’ growing focus on long-term living options — larger spaces, gardens, and immediate usability — over speculative off-plan investments.
Despite seasonal slowdowns during Ramadan and Eid, the average residential property price hit Dh2.5 million in Q1, the highest in three years. Industry experts say the resilience of prices despite softer volumes underlines the market’s maturity. “There is sustained demand for ready homes and a clear reduction in off-plan launches. We are also seeing encouraging signals in secondary market activity and bank financing, which reflect healthy investor sentiment and end-user confidence,” said Andrew Laver, associate director at Cavendish Maxwell – Abu Dhabi.
Abu Dhabi’s appeal is reinforced by structural factors: investor-friendly policies such as long-term Golden Visas, retirement residency options, and family visas; major infrastructure projects including transport upgrades and cultural landmarks; and continued economic diversification supported by stable oil revenues. Together, these drivers are anchoring long-term confidence in the housing market.
Still, challenges remain. Supply constraints risk creating affordability pressures if developers cannot keep pace with demand. Analysts caution that unless more projects are launched soon, the imbalance between supply and demand could intensify by 2026. Rising interest rates globally also add an element of uncertainty, although so far they have not dented demand in Abu Dhabi, where buyers are often long-term residents or institutional investors.
For now, the capital’s real estate market is in a “sweet spot”—underpinned by high demand for completed family homes, limited supply of new projects, and strong fundamentals. With transaction values already exceeding Dh61 billion this year and price momentum accelerating, the outlook for the rest of 2025 remains bullish. As one market analyst put it, “Abu Dhabi’s real estate has matured into a resilient, investor-friendly market. The real challenge ahead is not selling homes—but building enough of them.”
- Abu Dhabi
