Crompton stated that Abu Dhabi’s real estate market delivered one of its strongest performances in more than a decade, with 2025 emerging as a standout year for both rents and sale prices. He noted that data up to the third quarter showed significant year-on-year growth across all residential segments, including a 16 percent rise in apartment rents, a 7 percent increase in villa rents, and sales price growth of 28 percent for apartments and 25 percent for villas. According to Crompton, these levels of growth had not been seen since 2014 and reflected a shift toward a more dynamic and demand-driven market. He added that with supply remaining controlled and demand continuing to exceed expectations, the outlook for Abu Dhabi’s property market remains firmly positive.

Building on this momentum, Abu Dhabi continues to attract foreign investors and high-net-worth individuals seeking long-term value in prime residential locations. Yas Island, Saadiyat Island, and Al Reem Island remain the most in-demand communities, supported by their freehold status, waterfront settings, and lifestyle-led developments that appeal to both investors and end users.

Industry analysts highlight that Abu Dhabi’s competitive pricing, combined with a growing pipeline of high-quality residential projects, has strengthened its position as a key regional investment hub. Referring to Bloom Holding’s recent findings, experts noted that more than 30 residential projects are currently under development, offering a broad range of options for buyers targeting medium- and long-term capital growth.

This trend is reinforced by Knight Frank’s Destination Dubai 2025 report, which identified USD 1.6 billion in private capital targeting Abu Dhabi’s residential real estate market. While Dubai remains the UAE’s largest investment destination with USD 10.3 billion in private capital, Abu Dhabi offers average residential prices approximately 30 percent lower, increasing its appeal to investors and homebuyers alike. 

Growing interest from high-net-worth individuals continues to underpin demand. Around 19 percent of HNWIs plan to purchase residential property in Abu Dhabi in 2025, up from 14 percent in 2024. Demand is particularly strong among individuals with net worths between USD 30 million and USD 50 million, with 75 percent considering homes in the capital. Interest is even higher among ultra-high-net-worth individuals, with approximately 65 percent planning to invest in Abu Dhabi.

ValuStrat’s latest market assessment supports this outlook, reporting the strongest real estate growth on record during the third quarter. The report attributes this performance to rising residential values, firmer rental rates, sustained buyer demand, and elevated levels of off-plan activity.

Savills data further illustrates the strength of the market. Average residential sales prices increased by 16 percent year on year, rising from AED 14,485 per square metre in the third quarter of 2024 to AED 17,394 per square metre in the same period of 2025. Apartments accounted for 78 percent of all transactions, while supply expanded with more than 5,700 units launched during the quarter. Branded residences continued to gain traction, highlighted by the complete sell-out of Waldorf Astoria Residences Yas, which achieved AED 850 million in sales on launch day.

The short-term rental sector has also recorded strong performance, with average occupancy rates exceeding 88 percent. Limited supply in this segment has intensified demand, while new beachfront developments expected in 2026 are anticipated to support further growth. Overall real estate transactions in Abu Dhabi have increased by nearly 50 percent compared to 2024.

Despite rising demand, future supply growth is expected to remain measured. ADREC’s first-half 2025 report indicates that residential inventory is likely to increase by less than 5 percent annually through 2028. Population growth of over 8 percent in 2024 has further tightened the supply-demand balance, supporting continued upward pressure on prices and rents.

International buyer interest continues to be supported by Abu Dhabi’s stable regulatory framework, business-friendly environment, and world-class infrastructure. Economic fundamentals remain strong, with the International Monetary Fund forecasting growth of approximately 6 percent in 2025 and 5.8 percent in 2026.

Infrastructure investment, major transport projects such as Etihad Rail, and ongoing cultural and lifestyle developments continue to enhance the capital’s global appeal. While challenges such as limited land availability and evolving short-term rental regulations remain, supply levels are considered manageable, and demand is expected to remain resilient barring external economic or geopolitical disruptions.

Looking ahead, ValuStrat estimates that more than 33,000 new residential units will be delivered by 2030, including ultra-luxury branded developments and large-scale community projects. Additional partnerships are expected to introduce over 1,000 new villas and townhouses, further strengthening Abu Dhabi’s residential offering and reinforcing confidence in the market’s long-term prospects.

Original source: https://www.khaleejtimes.com/business-technology-review/abu-dhabi-property-boom-foreign-investors-drive-growth-in-prime-real-estate-hubs?_refresh=true