Abu Dhabi’s residential property market set for continued growth as demand surges

Residential property demand in Abu Dhabi is gaining momentum, with 38,700 new units expected to enter the market by 2028, according to the latest Abu Dhabi Residential Market Performance Report by Cavendish Maxwell.

The emirate recorded a strong performance in 2024, with 9,700 residential sales transactions valued at AED26 billion ($7.1 billion). This solid foundation sets the stage for continued growth, driven by rising demand and supportive government initiatives.

New supply and market expansion

According to the report, approximately 10,800 new units are scheduled for delivery in 2025, with another 6,000 expected in 2026. By the end of 2028, Abu Dhabi’s total residential stock is projected to reach around 313,700 units. Last year alone, 5,200 homes were completed—mainly in Al Raha Beach, Yas Island, Masdar City, and Saadiyat Island—bringing the year-end inventory to 275,000 units.

“The residential sector in Abu Dhabi is experiencing steady growth, driven by increased demand from both local and international investors, as well as strategic government initiatives such as residency incentives,” said Andrew Laver, Associate Partner at Cavendish Maxwell.

He added that sustainable development and innovative housing solutions will be key to shaping the future of Abu Dhabi’s residential market, supported by infrastructure expansion and enhanced community offerings.

Price trends and investor demand

In 2024, average sales prices for apartments rose by nearly 11.5%, while villa prices saw an increase of just over 12.5%. Yas Island led the price growth, with apartment prices rising by more than 20% and villa prices increasing by 13%.

Rental rates also surged, with average increases of nearly 13% for apartments and 8% for villas. Yas Island again recorded the highest rises, with rents up 16% for apartments and 10% for villas.

Demand for ready properties jumped by nearly 50% year-on-year, while off-plan transactions declined by 13%, largely due to fewer new project launches. Of the 9,700 sales recorded last year, 75% were for apartments—up 63% compared to the previous year.

Apartment sales totaled 7,300 units valued at AED12.6 billion ($3.4 billion). In contrast, 2,400 villas and townhouses were sold for a combined AED13.4 billion ($3.6 billion), representing a 44% drop in both volume and value due to limited new supply. However, demand for completed villas and townhouses rose 47% and 26% respectively, reflecting growing investor and end-user confidence in the ready property segment.

Mortgage market growth and future outlook

The mortgage market also saw notable growth, with nearly 5,000 mortgages worth AED7.1 billion ($1.9 billion) issued in 2024—a 34% increase from the previous year. Loans for apartments dominated, rising 66% in volume and 55% in value. Falling interest rates, attractive financing options, and greater investor confidence contributed to the surge.

Nearly 40 residential projects were launched in Abu Dhabi last year, bringing 11,000 new units to market. Al Reem Island led with 2,000 new units, followed by Saadiyat Island with 1,800, and Al Bahyah with 1,700.

Aldar Properties maintained its leadership position, launching around 4,000 units across 12 projects.

Looking ahead, the performance of the off-plan segment in 2025 will depend largely on the pace of new project launches. A slowdown in new supply could result in a dip in off-plan transaction volume and value, the report concludes.