Abu Dhabi Property Prices Rise 1.7%, 33K New Homes Expected by 2030

Abu Dhabi, UAE – August 12, 2025 – The ValuStrat Price Index (VPI) for Abu Dhabi’s residential sector recorded strong growth in Q2 2025, climbing 2.2% quarter-on-quarter and 8.1% year-on-year to reach 128.3 points, based on a 100-point baseline set in Q1 2021. The surge is driven primarily by robust performance in the freehold apartment market. Villa prices also posted solid gains, rising 2.6% QoQ and 10.1% YoY to 138.2 points.

The ValuStrat Abu Dhabi Real Estate Review for Q2 2025 provides a comprehensive analysis of the emirate’s residential, office, retail, hospitality, and industrial markets, highlighting growth propelled by strong demand, favorable economic conditions, and strategic developments.

Apartment prices rose 1.7% QoQ and 5.9% YoY, the highest annual growth rate in three years. Residential rental values also strengthened, with the rental VPI increasing 1.5% QoQ and 9.5% YoY to 122.8 points. Apartment rents outpaced villa rents, growing 2% QoQ and 12.5% YoY, while villa rents increased 7% YoY but remained flat in the first half of 2025.

Despite limited completions, only 7.1% of the projected 2025 housing pipeline delivered in H1, approximately 33,000 new residential units are expected over the next five years. Sales activity rebounded after a slower Q1, with off-plan transactions rising 53.1% QoQ, though still down 51.8% YoY. Ready home sales increased by 6.4% QoQ and 3% YoY, with an average transaction size of about USD 653,000 (AED 2.4 million).

Office Market Sees Surging Demand

Abu Dhabi’s office sector continues to experience strong demand, with asking rents increasing 28.3% YoY and 6.1% QoQ to reach USD 234 (AED 860) per sq m. Occupancy levels remain high in central business districts. The emirate’s total office stock stands at approximately 3.9 million sq m (42 million sq ft), with Masdar City Square recently adding 50,000 sq m of new supply.

Retail Sector Maintains Strength

The retail sector remains resilient, with shopping center stock at 1.95 million sq m (20.9 million sq ft) of gross leasable area. Expansion projects, including the redevelopment of Al Jimi Mall, are set to boost capacity. Aldar’s retail portfolio saw a 12% YoY revenue increase, while Yas Mall reported a 98% occupancy rate.

The UAE’s e-commerce market is forecast to surpass USD 13.2 billion (AED 48.5 billion) by 2028, further enhancing Abu Dhabi’s retail landscape.

Hospitality Sector Delivers Strong Performance

As of April 2025, Abu Dhabi’s hospitality market reported an occupancy rate of 83.7%, up 1.5% from last year. The Average Daily Rate (ADR) rose 25.1% YoY to USD 170 (AED 623), while Revenue Per Available Room (RevPAR) increased 26.8% to USD 142 (AED 521).

The upcoming Disney theme park resort on Yas Island, announced by The Walt Disney Company and Miral, is expected to further boost tourism and hospitality demand.

“The hospitality sector delivered exceptional results, with significant annual growth in occupancy and revenue metrics, underpinned by strong tourism activity. The recent announcement by The Walt Disney Company and Miral to develop a new Disney theme park resort on Yas Island is expected to further boost long-term demand,” said Haider Tuaima, Managing Director & Head of Real Estate Research, ValuStrat.

Industrial Market Growth

The industrial sector continues to expand, with industrial property asking prices growing 15.9% YoY. Warehouse prices range from USD 454 to USD 1,289 (AED 1,668 to AED 4,736) per sq m, depending on specifications. The newly established vaccine distribution hub at KEZAD underscores the sector’s growth trajectory.

Strong Macro-Economic Backdrop

The UAE economy is projected by the World Bank to grow 4.6% in 2025, driven by robust non-oil sector performance. Abu Dhabi’s GDP reached USD 79.2 billion (AED 291 billion) in Q1 2025, with non-oil activities accounting for 56.2% of the total. Abu Dhabi city’s population stands at 2.85 million, underpinning continued real estate demand.