Abu Dhabi residential market shows resilience amid supply constraints
According to Savills' latest Abu Dhabi Residential Market in Minutes – Q1 2025 report, the share of ready property transactions grew to 68 per cent, compared to 44 per cent in 2024 and 25 per cent in 2023, indicating stronger demand for move-in ready stock.
The report reveals that while transaction volumes have moderated, the market continues to show resilience, supported by sustained demand, limited new supply, and the emirate's growing international appeal.
Abu Dhabi recorded a 3.8 per cent GDP increase in 2024, with the UAE's economy forecast to grow by 4.7 per cent 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, just under 1,500 residential units were transacted within Abu Dhabi Municipality, reflecting a 39 per cent 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.
In the villa segment, capital values increased by seven per cent on Al Reef, 10 per cent on Yas Island, and 26 per cent on Saadiyat Island, highlighting continued demand for prime, lifestyle-led developments. For apartments, Saadiyat Island saw the highest year-on-year growth at 22 per cent, while values across Al Raha, Reem Island, and Yas Island remained steady. Overall, apartment transactions accounted for 63 per cent of activity in Q1 2025, with completed units making up the majority.
Ali Ishaq, Head of Residential Agency, Abu Dhabi at Savills Middle East, said: '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.'
According to the report, interest in the Abu Dhabi residential 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.
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