Today's Edition
MAYS IBRAHIM (ABU DHABI)
Abu Dhabi's residential real estate market continued to expand in the second quarter of 2026, with capital values, office rents and industrial demand all maintaining upward momentum, according to the latest quarterly review by global consultancy ValuStrat.
The ValuStrat Price Index (VPI) for the capital's freehold residential market climbed to 151.1 points, up 2.1% quarter-on-quarter and 17.8% year-on-year.
“Despite ongoing geopolitical uncertainty across the region, Abu Dhabi's residential market has remained resilient, with no material evidence of weakening demand,” said Haider Tuaima, Managing Director and Head of Real Estate Research at ValuStrat, in the report’s foreword.
Apartments continued to outperform villas. The apartment sub-index rose 2.9% quarterly and 24.1% annually to 147.5 points, while villa values increased 1.3% quarterly and 12% annually to 154.8 points.
Al Reef recorded the strongest annual capital appreciation among apartment communities at 41.6%, followed by Al Muneera Island, Al Reem Island and Al Bandar.
On the rental side, the residential VPI rose 4.7% annually to 128.6 points, holding broadly stable quarter-on-quarter. The average citywide annual apartment rent stood at Dh122,500, while villa rents averaged Dh260,000.
Notably, Abu Dhabi introduced a temporary 0% cap on rent increases across residential, commercial and industrial properties from June 2, replacing the previous 5% annual limit.
Transaction activity showed a mixed picture. Off-plan sales volumes surged 156% year-on-year to 6,061 units, representing 84% of total sales, even as ready-property transactions fell 28.3% annually.
Overall sales volumes across the market declined 8% quarter-on-quarter to 7,206 transactions, with the average sales ticket size down 12.9% to Dh4.14 million.
The office market remained tight, with asking rents in primary commercial districts up 11.4% quarter-on-quarter and 27.3% year-on-year, supported by sustained business activity and limited high-quality supply.
Average occupancy in the city's central business districts stood at 90%. Meanwhile, new business licences rose 21% year-on-year in the first quarter of 2026.
The industrial and logistics sector also continued to perform strongly, driven by demand from logistics operators, manufacturers and trade-related occupiers. KEZAD reported occupancy of approximately 98%, reflecting a persistent shortage of Grade A warehousing stock.
Hospitality performance was softer. Hotel occupancy fell 6% year-on-year to 75.6% in the year to March 2026, while RevPAR dropped 3.9% to Dh477, even as the average room rate edged up 1.7% to Dh631.
Looking ahead, 18,339 new homes are projected to enter Abu Dhabi's housing supply in 2026, with roughly 37,700 units scheduled for delivery by 2030.
