Knight Frank: Annual Residential Price Growth Tops 17% in Abu Dhabi

Abu Dhabi, UAE – August 4, 2025 - Abu Dhabi’s residential market maintained its upward trajectory in Q2 2025, with average property prices rising by 6.4% quarter‑on‑quarter to $335 (AED 1,230) per sqft, according to the latest Abu Dhabi Residential Market Review published by global real estate consultancy Knight Frank. This brings the emirate’s total annual growth to 17.3%, marking a 31.3% increase in values since Q1 2020.

Apartments Lead Q2 Surge

Apartments led the quarterly gains, with values jumping 6.8% to $353 (AED 1,296) per sqft - a 17.3% year-on-year uplift and 28.7% increase from Q1 2020 levels. Al Raha Beach stood out with 11% price growth since H1 2024, followed closely by Saadiyat Island at 10%. These areas reflect Abu Dhabi’s premier beachfront living appeal, with Al Raha Beach also drawing strength from its proximity to Yas Island’s leisure offerings.

Villas: Long-Term Winners

Although apartment prices dominated in Q2, villas continue to be the standout performer in long-term value growth, posting a 3.4% quarterly rise to $300 (AED 1,103) per sqft, up 42.3% since Q1 2020. Saadiyat Island villas appreciated 28% year-on-year, while Yas Island villas climbed 22%.

“Villas have continued to outperform over the past five years, delivering growth of 35%,” said Faisal Durrani, Partner – Head of Research, MENA at Knight Frank. “In Abu Dhabi, villas make up 37.4% of the total supply pipeline… Based on current demand, which is heavily tipped in favour of villas, prices will likely continue outperforming apartments simply because there are not that many villas coming through.”

Durrani added that with villa prices averaging around $300 (AED 1,100) psf, nearly half that of Dubai. Abu Dhabi represents better value for money, especially for families seeking a more tranquil lifestyle.

Future Supply & Delivery

Abu Dhabi recorded $2.45 billion (AED 9 billion) in residential transactions during H1 2025, down 36% compared to the same period in 2024. Only 890 new units were delivered so far this year.

Knight Frank is currently tracking 33,074 homes under construction, expected for delivery by 2029, 62% of which are apartments.

Yas Island leads in future supply with over 8,000 units in the pipeline, followed by Al Shamkha (approx. 3,000 units). Branded residences from Aldar for Mandarin Oriental and Nobu will further boost Saadiyat Island’s luxury offerings.

“There is growing interest in Abu Dhabi from international buyers thanks to the emirate’s excellent leisure and lifestyle amenities, and supportive business conditions,” said Will McKintosh, Regional Partner – Head of Residential, MENA. “We expect strong uptake of the 33,000-plus new units coming to market between now and 2029.”

Global Wealth Targeting Abu Dhabi

Knight Frank’s Destination Dubai 2025 report found that $1.6 billion in private capital is earmarked for residential property in Abu Dhabi — second in the UAE only to Dubai. Though significantly lower than the $10.3 billion aimed at Dubai, Abu Dhabi's 30% lower average prices make it a compelling option for global investors.

The report highlighted increasing interest from high-net-worth individuals (HNWIs):

• 19% of global HNWIs plan to buy a home in Abu Dhabi in 2025, up from 14% last year
• Among individuals worth $30–50 million, 75% want to purchase in Abu Dhabi
• 65% of those worth more than $50 million are also looking to buy

In terms of budget:

• 40% of individuals with $1M–$5M in private wealth aim to spend up to $2 million on a home
• A similar share of $20M+ net worth buyers are seeking homes above $80 million

“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,” said Shehzad Jamal, Partner – Strategy & Consulting, MENA. “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% year-on-year.”

The combination of strong annual price growth, vibrant global investor interest, and limited villa supply has positioned Abu Dhabi as a key player in the region’s real estate landscape. With a pipeline of premium branded homes and a focus on lifestyle-centric communities, the emirate is well on its way to becoming one of the most sought-after residential markets in the Middle East.