Abu Dhabi’s real estate sector continues to show resilience, supported by sustained demand, limited new supply and the emirate’s growing international appeal, despite transaction volumes moderating.
The latest Savills report reveals that average sales rates across the market rose from AED14,100 per sqm in Q1 2024 to AED16,200 per sqm in Q1 2025, representing a 13.4 percent year-on-year increase.
“Demand is clearly present, particularly within well-connected and master-planned communities. The shortage of new launches has channelled activity towards the ready market, and we are seeing this reflected in both transaction share and rising capital values,” stated Ali Ishaq, head of residential agency, Abu Dhabi at Savills Middle East.
Limited supply pushes prices up
Abu Dhabi recorded a 3.8 percent GDP increase in 2024, with the UAE’s economy forecast to grow by 4.7 percent in 2025, according to Oxford Economics. The emirate was also named the world’s safest city for the ninth consecutive year, reinforcing its position as a destination of choice for individuals and businesses alike.
Continued investment in cultural, educational and lifestyle infrastructure, including the Saadiyat Cultural District and the announcement of Harrow International School’s first GCC site, is further contributing to the city’s appeal as a place to live and invest.
In Q1 2025, Abu Dhabi’s real estate recorded just under 1,500 residential unit transactions within Abu Dhabi Municipality, reflecting a 39 percent year-on-year decline and the lowest quarterly figure since Q2 2022. Only 10 new projects entered the market during the period, delivering fewer than 3,000 units, impacting transaction levels.
This limited pipeline has resulted in a competitive landscape across the leasing, secondary sales and off-plan segments, with waiting lists for good quality buildings re-emerging and off-plan units increasingly trading at a premium.
Villa prices rise in key areas
The share of ready property transactions grew to 68 percent, compared to 44 percent in 2024 and 25 percent in 2023, indicating stronger demand for move-in-ready stock.
In Abu Dhabi’s villa segment, real estate capital values increased by 7 percent on Al Reef, 10 percent on Yas Island, and 26 percent on Saadiyat Island, highlighting continued demand for prime, lifestyle-led developments.
For apartments, Saadiyat Island saw the highest year-on-year growth at 22 percent, while values across Al Raha, Reem Island, and Yas Island remained steady. Overall, apartment transactions accounted for 63 percent of activity in Q1 2025, with completed units making up the majority.
Read| UAE real estate: Transactions surpass $65 billion in Q1 2025 across five emirates
Disney theme park to further boost demand
According to the report, interest in the Abu Dhabi residential real estate market continues to be supported by broader shifts in sentiment among expatriate families, driven by recent visa reforms and the development of the education sector. The announcement of a Disney theme park on Yas Island and the entry of international developers into the market are also expected to enhance future demand.
Savills anticipates continued activity in the ready market over the coming months, with demand likely to remain strong for high-quality residential product, particularly within established communities.
