Abu Dhabi’s residential real estate market continued to grow in Q2 2025, with average prices rising by 6.4 percent quarter‑on‑quarter to AED1,230 per sqft. The Q2 figures bring total annual growth in the emirate to 17.3 percent, representing a 31.3 percent increase in values since Q1 2020.
According to Knight Frank’s latest Abu Dhabi Residential Market Review, apartments were the top performer during the quarter, with values increasing by 6.8 percent to AED1,296 per sqft. This marks a 17.3 percent year‑on‑year rise and is 28.7 percent above Q1 2020 levels.
Villas on Al Saadiyat Island see strongest price growth
In Abu Dhabi’s residential real estate market, Al Raha Beach led the apartment market with price growth of 11 percent since H1 2024, followed by Al Saadiyat Island at 10 percent. Both locations epitomize the prime beachfront living available in Abu Dhabi, with Al Raha Beach also benefiting from its proximity to the leisure attractions of Yas Island.
Over the long term, villas are the standout for value growth. Prices registered a 3.4 percent quarter-on-quarter rise in Q2, reaching AED1,103 per sqft, representing a 42.3 percent uplift since Q1 2020. Villas on Al Saadiyat Island saw the strongest price appreciation, up 28 percent year-on-year, followed by Yas Island, where villas experienced a 22 percent increase.
“Villas have continued to outperform over the past five years, delivering growth of 35 percent. In Abu Dhabi, villas make up 37.4 percent of the total supply pipeline, the rest is apartments. Based on current demand, which is heavily tipped in favor of villas, prices will likely continue outperforming apartments simply because there are not that many villas coming through,” said Faisal Durrani, Partner – Head of Research, MENA.
“When you overlay average prices for villas, which stand at around AED1,100 psf, compared to double that level in Dubai, it is easy to understand why some buyers view Abu Dhabi as better value for money, which for some also offers a more family-friendly lifestyle,” he added.
33,074 homes scheduled for delivery by 2029
Knight Frank also revealed that supply in Abu Dhabi’s residential real estate market struggled to keep pace with rising demand during the first half of the year, with residential transactions totalling AED9 billion during H1 2025, 36 percent lower than H1 2024.
890 new residential units have been delivered in 2025; however, Knight Frank is tracking 33,074 homes currently under construction and scheduled for delivery by 2029. Apartments comprise 62 percent of this future supply pipeline.
“There is growing interest in Abu Dhabi from international buyers thanks to the emirate’s excellent leisure and lifestyle amenities, and supportive business conditions, and we therefore expect strong uptake of the 33,000-plus new units coming to market between now and 2029,” said Will McKintosh, Regional Partner – Head of Residential, MENA.
Yas Island, with its world-class theme parks and beach resorts, is the top location for new supply by some margin, with more than 8,000 units in the pipeline. It is followed by circa 3,000 units planned in the more traditional residential district of Al Shamkha. Meanwhile, new branded residences developed by Aldar for Mandarin Oriental and Nobu bolster the pipeline for Saadiyat Island.
“Our data shows that, of those surveyed, 7 percent of buyers are interested in off-plan homes, suggesting an increasing desire to purchase property that can be used immediately, whether as a primary residence or holiday home,” added McKintosh.
Demand from HNWIs grows
Knight Frank’s Destination Dubai 2025 report identified $1.6 billion of private capital targeting residential real estate in Abu Dhabi, making it the UAE’s second most popular destination for global wealth. Although short of the $10.3 billion aimed at Dubai’s residential market, the fact that average prices in Abu Dhabi are about 30 percent less than in Dubai makes it a compelling option for investors and homebuyers alike.
The report found that demand from global high-net-worth individuals (HNWIs) for residential real estate in Abu Dhabi is strengthening, with 19 percent looking to purchase a home in 2025, up from 14 percent last year. Demand is especially strong among those worth $30-50 million, with some 75 percent of potential purchasers in this wealth bracket expressing a desire to own residential real estate, while 65 percent of individuals worth more than $50 million are looking to purchase a home in Abu Dhabi.
“Some 63 percent of global high-net-worth individuals interested in buying in Abu Dhabi are doing so for personal reasons; they intend to use the property as their main residence, or holiday home, or for retirement. The remaining 37 percent are investment-driven. For buyers who may have been priced out of Dubai, or who want to diversify their UAE portfolio, Abu Dhabi is increasingly attractive, with average residential prices growing by around 17 percent year-on-year,” added Shehzad Jamal, Partner – Strategy & Consulting, MENA.
In terms of budgets, around 40 percent of individuals with private wealth of between $1 million and $5 million are looking to spend up to $2 million on a home in Abu Dhabi. Although a similar percentage of those worth more than $20 million are looking to spend over $80 million, unlike Dubai’s super prime focus, the Abu Dhabi market is tilted more towards the lower to mid-range price bracket.
