Abu Dhabi properties see robust capital appreciation in Q2 2025: ValuStrat report
ABU DHABI (ALETIHAD)Abu Dhabi's residential property market continued its robust upward trajectory in the second quarter of 2025, with the capital values recording an 8.1% year-on-year (YoY) and 2.2% quarter-on-quarter (QoQ) rise across both villas and apartments. The report by ValuStrat highlights a market driven by limited supply, resilient demand, and increasing investor confidence.Villas outpaced apartments in capital appreciation, with villa prices rising 10.1% YoY and 2.6% QoQ. Apartment prices rose by 5.9% annually—the strongest growth in three years—and 1.7% quarterly. The average citywide home value stood at Dh966 per sq ft, with villas averaging Dh795 per sq ft and apartments Dh1,037 per sq ft.Saadiyat Island led villa capital gains with a 21.2% annual rise, while Hydra Village remained flat. For apartments, Saadiyat Island again topped the list with an 8% annual increase, followed by Al Reef (7.3%), Al Muneera Island (7%), and Al Reem Island (5.8%).Rental values also saw strong growth, with average rents rising 9.5% YoY and 1.5% QoQ. Apartments outperformed villas in rental growth, with apartment rents rising 12.5% YoY and 2% QoQ, while villa rents grew 7% annually but remained flat quarterly. Average citywide gross yields stood at 8.1%, with apartments yielding 8.5% and villas 7%.Citywide apartment asking rents averaged Dh117,000 per annum. Studios fetched Dh65,000, one-beds Dh91,000, two-beds Dh128,000, and three-beds Dh183,000. Among communities, Al Reef posted the highest quarterly increase at 5.4%. Villa rents averaged Dh249,000, with three-beds at Dh185,000, four-beds Dh249,000, and five-beds Dh313,000. Mohammad Bin Zayed City saw the strongest villa rent growth at 3.7% QoQ.New supply remains constrained, with only 7.1% of the projected 2025 pipeline delivered by mid-year. A total of 12,499 units are scheduled for completion this year, and 33,000 units are expected by 2030. Several new launches were announced, including Modon's Wadeem project on Hudayriyat Island, Bloom Holding's Granada Phase 2, and Seamont Autograph Residences on Al Reem Island.Sales activity rebounded sharply. Off-plan transactions surged 53.1% QoQ but were still 51.8% lower YoY. The average off-plan property price stood at Dh1,781 per sq ft, with a 38.1% annual increase. The average ticket size rose to Dh3 million, reflecting strong demand for high-end units. Off-plan deals made up nearly 30% of all residential sales.Ready home sales grew by 6.4% QoQ and 3% YoY. The average transaction price for ready homes was Dh1,180 per sq ft, and the average ticket size was Dh2.4 million. Total mortgage-backed transactions reached Dh8.3 billion, matching cash transactions, which also stood at Dh8.2 billion. Mortgages accounted for 50% of all ready property sales, supported by steady US interest rates.The office market remained buoyant, with average asking rents rising 6.1% QoQ and 28.3% YoY, driven by high occupancy rates in central business districts, which reached 90.5%. Masdar City Square added 50,000 sq m of new office space in Q2.
In the hospitality sector, the emirate recorded an 83.7% occupancy rate in the first four months of the year. The average daily room rate reached Dh623, while revenue per available room (RevPAR) climbed to Dh521, up 26.8% YoY. The market welcomed 1.7 million guests during the same period. The planned Disney theme park resort on Yas Island is expected to reinforce Abu Dhabi's growing tourism appeal.
Source: Aletihad - Abu Dhabi
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