Today's Edition
A. SREENIVASA REDDY (ABU DHABI)
Abu Dhabi’s real estate market recorded its strongest growth on record in the third quarter of 2025, as demand for affordable freehold apartments and high-quality villas fuelled a broad-based rally across both sales and rental segments, according to ValuStrat, a noted real estate consultancy.
Average residential prices rose 4% quarter on quarter and 10.5% year on year, reflecting a sharp acceleration from 1.7% and 5.3%, respectively, during the same period last year, ValuStrat data showed. Villa prices jumped 11.6% annually, with Saadiyat Island leading gains at 21.2%, followed by Al Reef (8.1%) and Al Raha (7.7%). Apartment values increased 4.4% over the quarter, with the strongest annual rises seen in Al Reef (13.3%) and Saadiyat Island (10.5%).
The weighted average home value stood at Dh10,818 per sqm, with apartments averaging Dh11,647 per sqm and villas Dh8,859 per sqm.
Rental values mirrored the sales momentum, rising 2.3% quarterly and 9.3% annually. Apartment rents outpaced villas, climbing 2.7% quarter on quarter and 12.8% year on year, while villa rents rose 1.9% and 5.6%, respectively. Citywide occupancy averaged 88.1%, while gross yields reached 8.1%, with apartments offering higher returns at 8.5% compared to 7% for villas.
Average apartment rents in Abu Dhabi City reached Dh120,000 per year, with studios at Dh67,000, one-bedrooms at Dh95,000, two-bedrooms at Dh132,000 and three-bedrooms at Dh185,000. Among top-performing areas, Al Reef saw quarterly rent growth of 4.5%, while Saadiyat Island registered a 2.8% rise. For villas, average annual rents stood at Dh188,000 for three-bedrooms, Dh255,000 for four-bedrooms and Dh317,000 for five-bedrooms, with Al Raha (+3.7%) and Mohammed bin Zayed City (+2.3%) leading quarterly increases.
New housing supply remained limited, with only 10.3% of the projected 2025 pipeline delivered as of September. The emirate is expected to add 33,000 new units by 2030, including major developments such as Waldorf Astoria Residences Yas Island, Yas Living, and Bloom Holding’s Marbella project in Zayed City.
When asked about the slow completion of proposed residential projects in 2025, Haider Tuaima, Managing Director and Head of Real Estate Research at ValuStrat, told Aletihad: “Construction delays continue to be influenced by several factors, including rising material costs, challenges in sourcing materials within allocated budgets, and increasing difficulty in securing qualified contractors amid a surge in project activity across the UAE and wider region.”
With constrained supply and a rapidly expanding population, property prices are expected to rise at a faster pace.
“Given the current market momentum, we forecast price growth to accelerate to between 12% and 15% by the end of 2026, compared to the 10.5% annual rise reported in the third quarter,” Tuaima said.
Off-plan activity reached an all-time high, accounting for 79% of total residential sales — up 97.5% quarterly and 118% annually — supported by a surge in premium project launches. The average price for off-plan properties climbed 13.2% quarter on quarter and 22.4% year on year to Dh20,839 per sqm, while the average transaction size rose 10.4% to Dh3.4 million.
Sales of ready properties grew 12.5% annually, with an average price of Dh13,896 per sqm and an average ticket size of Dh2.6 million. Mortgage-backed purchases represented 67% of all transactions, totalling Dh12.4 billion during the quarter.
The office market also registered robust performance, with rents up 22.7% annually and 3.6% quarterly, and average occupancy in central districts reaching 90.5%. Average office asking prices stood at Dh2.39 million, an 8.7% increase year on year.
The industrial and logistics segment also expanded, with warehouse asset prices up 13.7% annually. Rental rates climbed between 10.9% and 15.5%, with modern cold-storage facilities achieving the highest returns.
