Abu Dhabi‘s real estate market is witnessing a significant transformation, with residential prices surging by 17.3%, driven primarily by robust demand from global investors. According to Knight Frank’s latest report, the emirate’s real estate landscape is becoming increasingly appealing to buyers, particularly high-net-worth individuals seeking both lifestyle and investment opportunities. As the market continues to flourish, Abu Dhabi’s residential sector is on track for consecutive quarters of growth, demonstrating its resilience and attractiveness in a competitive region.
In the second quarter of 2025, Abu Dhabi’s residential property market showcased a remarkable upward trend, with average prices seeing a 6.4% increase quarter-on-quarter, reaching AED1,230 per sq ft ($335). This substantial growth contributes to an impressive annual price rise of 17.3%, reflecting a cumulative increase of 31.3% since the first quarter of 2020.
Apartments led this upward trajectory, climbing 6.8% to AED1,296 per sq ft ($353), marking a year-on-year increase of 17.3%. The standout locations for apartment price growth include Al Raha Beach and Al Saadiyat Island, where prices surged by 11% and 10%, respectively, since the first half of 2024. These areas offer exceptional beachfront living, with Al Raha Beach particularly benefiting from its proximity to Yas Island’s array of leisure activities.
Long-Term Growth in Villa Prices
When examining the long-term performance of villas in the region, they significantly outpaced other property types, showing a 3.4% quarterly increase to AED1,103 per sq ft ($300) and an impressive 42.3% rise since Q1 2020. Villas on Al Saadiyat Island recorded a remarkable 28% increase year-on-year, closely followed by Yas Island, which saw a 22% climb. Currently, villas constitute 37.4% of Abu Dhabi’s supply pipeline, with demand remaining strong due to limited new villa developments and competitive pricing compared to Dubai.
Despite a decrease in residential transactions, which totaled AED9bn ($2.45bn) in the first half of 2025—a 36% drop from the previous year—this downturn does not seem to hinder overall market growth. The supply constraints stem from the delivery of only 890 new units against a backdrop of more than 33,000 homes currently under construction, with apartments making up 62% of this future supply.
Investor Interest and Future Prospects
Yas Island stands out as a hotspot for new developments, featuring over 8,000 units, while Al Shamkha is set to introduce around 3,000 units. Additionally, Aldar’s branded residences at both the Mandarin Oriental and Nobu are set to enhance Saadiyat Island’s appeal. Knight Frank reports that international interest in Abu Dhabi’s residential market is growing significantly, with private capital aimed at this sector estimated at $1.6bn, positioning it as the UAE’s second most sought-after destination after Dubai.
Interest from global high-net-worth individuals (HNWIs) is on the rise, with 19% planning to invest in Abu Dhabi property in 2025, compared to 14% the previous year. Notably, those with fortunes ranging from $30m to $50m demonstrate a particularly strong intent to purchase, with 75% indicating they plan to buy. Additionally, 65% of those possessing over $50m have similar aspirations.
As noted by Shehzad Jamal, Partner – Strategy and Consulting, MENA, “Some 63% of global high-net-worth individuals interested in buying in Abu Dhabi are doing so for personal reasons; they intend to use the property as their main residence or holiday home, or for retirement.” He added, “For buyers who may have been priced out of Dubai or who want to diversify their UAE portfolio, Abu Dhabi is increasingly attractive, with average residential prices growing by around 17.3% year-on-year.”
With average residential prices approximately 30% lower than those in Dubai, the Abu Dhabi real estate market offers enticing value for both investors and homebuyers. This combination of strong demand amidst limited supply ensures that the emirate remains a focal point in the region’s real estate boom.