Abu Dhabi is rapidly emerging as a significant opportunity for investors during the current UAE real estate surge. With a strategic blend of smart urban planning, infrastructure advancements, and an expanding lifestyle narrative, the capital is becoming increasingly attractive to both local and international buyers. Experts highlight how this momentum is not just a passing trend but a substantial evolution within the region’s property landscape, offering robust investment prospects.
In a series of exclusive interviews, leading real estate experts revealed how the capital’s property market is becoming a magnet for both domestic and international investors—driven by smart planning, long-term vision, and a wave of infrastructure and lifestyle upgrades.
“Abu Dhabi has surpassed Oslo to become the city with the highest concentration of sovereign wealth,” Ali Ishaq, Head of Residential Agency in Abu Dhabi, told Arabian Business.
Abu Dhabi’s Reem and Yas Islands: Standout Performers
“This is driving significant opportunity both for individuals and corporate entities, which in turn is driving growth in Abu Dhabi’s real estate market,” he added.
This capital strength is being translated into large-scale urban development. New plans featuring integrated, community-driven environments are emerging, offering a variety of product types not previously available in the emirate.
Infrastructure enhancements—including new bridges and tunnels connecting key districts and islands—are also contributing to the city’s livability and accessibility. Rental yields across the capital remain robust.
According to Haider Tuaima, Managing Director and Head of Real Estate Research, “Gross rental yields averaged 7.8 percent, with apartments in Al Muneera offering the highest yields at 8.8 percent and villas in Hydra Village showing the strongest yield growth at 7.6 percent.”
Residential occupancy stood at 88.1 percent in Q1, he added, noting that supply remains constrained. “Only 279 units were delivered in the first quarter—just 2 percent of the nearly 14,000 expected for the full year.”
Ishaq confirmed that Reem Island and Yas Island are indeed standout performers: “Reem Island and Yas Island are delivering the highest rental yields, owing to attractive pricing and location.”
Both apartments and villas are witnessing increased demand, with the latter particularly appealing to families establishing longer-term bases.
Abu Dhabi’s Diverse and Growing Investor Base
Abu Dhabi is now attracting a broader, more diversified investor demographic. “We’re seeing both short- and long-term investors entering the market,” Ishaq said.
“Abu Dhabi’s appeal lies in its position as the capital of the UAE, a hub for talent, and a city committed to innovation and digital transformation.”
Tuaima further pointed to mortgage trends as indicators of end-user activity. “In Q1, two-thirds of transactions were mortgage-backed, with just one-third completed in cash—the inverse of what we typically see in Dubai,” he noted.
Both apartments and villas in Abu Dhabi are seeing increased demand, with the latter particularly appealing to families establishing longer-term bases.
“Abu Dhabi’s strong appeal to investors stems from its strategic location, thriving economy, and government support for growth and innovation,” Ishaq added.
“The city’s world-class infrastructure, connectivity, and ease of business further enhance its attractiveness to investors.”
Additionally, sustainability has transitioned from a trend to a priority in Abu Dhabi’s real estate landscape.
“Residential occupiers and younger generations are increasingly mindful of wellness and sustainability, seeking developments that offer more than just housing,” Ishaq noted.
“In the commercial sector, occupiers are also conscious of how their operations impact the environment, with global firms leveraging real estate to offset operational impacts,” he added.
This trend is complemented by the city’s growing lifestyle offerings and family-oriented ecosystem.
Upcoming International Schools Boosting Investor Interest in Abu Dhabi
Recent school openings, including Gordonstoun, Harrow, and King’s College School Wimbledon, have further enhanced the city’s appeal for long-term residents.
While comparisons with Dubai are inevitable, Abu Dhabi’s momentum is grounded in its own fundamentals.
“The significant price rises in Dubai post-pandemic make Abu Dhabi a much more affordable option in the UAE,” Ishaq observed.
However, affordability isn’t the only factor. “Recent announcements about Disney, a growing entertainment schedule, the concentration of sovereign wealth, and world-renowned school openings are all contributing to the city’s livability.”
The ValuStrat Price Index for Abu Dhabi rose 7.2 percent year-on-year in Q1 2025, with villa prices up 9.7 percent and apartment prices up 4.5 percent.
According to Tuaima, “Abu Dhabi’s capital values continue to show healthy single-digit growth, supported by constrained supply and steady demand, with prices expected to rise up to 7 percent by the end of 2025.”
Off-plan prices averaged AED 17,061 per sq m—significantly higher than ready property prices—although transaction volumes were down due to fewer new launches.
“Off-plan transactions fell sharply, down 57.7 percent quarter-on-quarter and 79.2 percent year-on-year,” Tuaima stated. “Ready home sales declined 33.6 percent quarter-on-quarter but increased 13.6 percent year-on-year.”
Echoing the sentiment, Declan King, Senior Partner and Group Head of Real Estate, remarked: “Great to see the real estate sector in the capital reporting consecutive periods of quarterly growth in sales values of late. It will be interesting to observe if the recent announcement of Disney on Yas Island will act as a further catalyst for the local property market.”
Abu Dhabi is no longer just an alternative; it’s increasingly becoming a primary destination. Supported by sovereign investment, a transparent regulatory framework, and a future-focused approach to urban living, the capital is steadily winning over investors everywhere. With these positive market fundamentals, Abu Dhabi’s quiet yet formidable real estate surge is gaining undeniable traction.