Abu Dhabi’s residential property market remained resilient in the first quarter of 2025, despite a notable drop in transaction volumes, according to Savills’ latest Abu Dhabi Residential Market in Minutes – Q1 2025 report.
Lower transactions, limited supply
The capital saw just under 1,500 residential transactions within Abu Dhabi Municipality during Q1 2025, marking a 39% year-on-year decline—the lowest level since Q2 2022. This slowdown is attributed to the limited number of new project launches, with only 10 developments entering the market and delivering fewer than 3,000 units.
Despite the dip in activity, the market remains competitive. Waiting lists for quality buildings have resurfaced, and off-plan units are increasingly trading at a premium.
Rising property values
Average sales rates increased from Dhs 14,100 per sqm in Q1 2024 to Dhs 16,200 per sqm in Q1 2025—a 13.4% annual rise. Demand shifted notably toward ready properties, which accounted for 68% of transactions, compared to 44% in 2024 and 25% in 2023.
Villa capital values also rose, with gains of 7% in Al Reef, 10% on Yas Island, and 26% on Saadiyat Island. For apartments, Saadiyat Island recorded the highest year-on-year growth at 22%, while prices on Al Raha, Reem Island, and Yas Island remained largely unchanged.
Expat demand and infrastructure growth
According to Savills, the market continues to benefit from growing interest among expatriate families, encouraged by recent visa reforms and ongoing investment in the education and cultural sectors. Major announcements like the future Disney theme park on Yas Island and Harrow International School’s upcoming GCC debut are expected to support future demand.
Abu Dhabi was also named the world’s safest city for the ninth consecutive year. This, combined with a 3.8% GDP growth in 2024 and strong economic forecasts for the UAE in 2025, has enhanced the emirate’s global appeal.
Focus on ready homes
“Demand is clearly present, particularly within well-connected and master-planned communities. The shortage of new launches has channelled activity towards the ready market, and we are seeing this reflected in both transaction share and rising capital values,” said Ali Ishaq, Head of Residential Agency, Abu Dhabi at Savills Middle East.
Savills expects continued demand for high-quality homes in established neighbourhoods, especially within the ready property segment.
tanvir@dubainewsweek.com
