Rental prices escalate in Abu Dhabi, home values maintain stability due to reduced housing supply on the market
Abu Dhabi Real Estate Market Surges in Q2 2025
The Abu Dhabi real estate market has experienced a significant surge in Q2 2025, with the ready home market leading the charge. Transaction volume for ready homes increased by 45.5% quarter-on-quarter and 51% year-on-year, according to recent data. The average ticket size for ready home sales stands at Dh2.4 million.
Off-plan activity also remained strong, albeit with a slight decrease year-on-year. The volume of off-plan transactions increased by 53.1% quarter-on-quarter, but decreased by 51.8% year-on-year. The average off-plan price is Dh19,171 per sq m, marking a 38.1% year-on-year increase.
Several notable launches and completions are underway in Abu Dhabi. These include Wadeem by Modon (Hudayriyat), Seamont Autograph Residences (Al Reem), Muheira by Modon (Al Reem), Granada Phase 2 by Bloom (Zayed City), and a 1.87 million sq m project near Saadiyat by Palm Hills Development & Wave Seven.
The property prices in Abu Dhabi have also seen an increase. In Q2 2025, property prices rose by 2.2% quarter-on-quarter and 8.1% annually. Villa prices grew at a faster clip, up 2.6% quarter-on-quarter and 10.1% year-on-year, while apartment values rose by 1.7% quarter-on-quarter and 5.9% year-on-year, marking the strongest annual growth for flats in three years.
The rental market in Abu Dhabi is experiencing its fastest pace of increase in years, primarily due to limited new supply, strong demand, and attractive infrastructure developments. Apartment rents, especially mid-tier and affordable segments, saw increases ranging from about 3% up to 21% in early 2025, with mid-tier apartments increasing between 3% to 19% and affordable apartments up to 21%. This surge is stronger compared to villa rentals, which showed more modest growth—up to 7% for mid-tier villas and a maximum of 13% for affordable villas.
| Rental Market Segment | Rental Increase Range H1 2025 | Key Drivers | |-------------------------------|------------------------------|------------------------------------------------| | Apartments (Affordable & Mid-tier) | 3% to 21% (mid-tier: 3-19%) | Limited supply, infrastructure projects, greater demand, platform transparency | | Villas (Affordable & Mid-tier) | Up to 13% (affordable), up to 7% (mid-tier) | More stable demand, family-oriented areas, slower growth in supply pressure |
The citywide average home price is Dh10,398 per sq m, with the average ready home price at Dh12,701 per sq m and the average off-plan price at Dh19,171 per sq m. In Q2 2025, cash transactions totaled 1,821 with a value of Dh8.2 billion, and mortgage transactions totaled 2,878 with a value of Dh8.3 billion. Gross rental yields are 8.1% overall, with 8.5% for apartments and 7% for villas. The average asking apartment rent for a studio is Dh65,000, for a 1-bed is Dh91,000, for a 2-bed is Dh128,000, and for a 3-bed is Dh183,000.
A total of 178 apartments and 712 villas were completed in H1 2025. By 2030, 33,000 new units are expected to be added to the market. The infrastructure projects contributing to this demand include Etihad Rail and the upcoming Disneyland on Yas Island, which have increased demand for housing in nearby areas. Enhanced transparency and transaction efficiency due to digital platforms like Madhmoun have also supported market growth and visibility for properties.
- The surge in the Abu Dhabi real estate market in Q2 2025 has attracted attention in the finance news world, as investors see potential for profit in the growing market.
- The strong business activity in the Abu Dhabi real-estate sector not only involves the ready home market but also off-plan projects, as evidenced by the increasing transaction volume and prices.
- With the ongoing development of significant infrastructure projects such as Etihad Rail and Disneyland on Yas Island, the growth in the Abu Dhabi real estate market is poised to continue, appealing to both local and international investors.
