Villa prices outperformed apartments, climbing 2.7% quarterly and 9.7% annually to 134.7 points in Abu Dhabi.
Abu Dhabi property market report Q1 2025
Abu Dhabi rental values increased, with the residential rental VPI rising by 2.2% quarter-on-quarter and 9% year-on-year to reach 121 points. Image: Shutterstock
Abu Dhabi’s property market delivered its strongest capital gains in three years during the first quarter of 2025, even as sales volumes declined due to limited supply, according to the latest ValuStrat report.
The ValuStrat Price Index (VPI) for residential properties rose 2.1% quarterly and 7.2% annually to reach 125.6 points, based on a Q1 2021 baseline of 100.
Villa prices outperformed apartments, climbing 2.7% quarterly and 9.7% annually to 134.7 points, while apartment prices increased 1.5% quarterly and 4.5% annually to 116.9 points.
Abu Dhabi records strongest capital gains in three years, whilst sales volumes slow due to constrained supply,” said Haider Tuaima, Managing Director at ValuStrat.
The weighted average home value in Abu Dhabi stood at AED 10,226 per square metre (AED 950 per square foot), with apartments averaging AED 10,979 per square metre and villas at AED 8,407 per square metre.
Saadiyat Island led annual capital gains for villas, recording a 21.2% increase, followed by Al Raha at 8.2% and Mohammed Bin Zayed City at 4.7%.
Among apartments, Al Reef saw the highest annual gains at 7.5%, followed by Saadiyat Island at 6.2% and Al Muneera Island at 5.7%.
Rental values rise sharply
Rental values also increased, with the residential rental VPI rising 2.2% quarterly and 9% annually to 121 points.
Apartment rents outpaced villas, growing 3.4% quarterly and 11.6% annually, while villa rents rose 6.3% annually but remained flat quarterly.
The average annual apartment asking rent stood at AED 114,000, with studios at AED 63,000, one-bedroom units at AED 89,000, two-bedroom apartments at AED 125,000, and three-bedroom units at AED 180,000.
Villa rents averaged AED 245,000 annually, with three-bedroom properties at AED 180,000, four-bedroom homes at AED 244,000, and five-bedroom villas at AED 312,000.
Gross yields averaged 7.8%, with apartments delivering 8.3% and villas 6.7%. The estimated average residential occupancy rate reached 88.1%.
Abu Dhabi’s residential market update
Abu Dhabi completed just 90 apartments and 189 villas during the first quarter, representing 2 % of the expected 2025 residential pipeline of 13,941 units.
Despite the limited completions, several major developers announced new projects. Aldar released 72 apartments and townhouses at Mamsha Gardens on Saadiyat Island.
IMKAN unveiled Naseem Al Jurf, featuring 111 villas, eight apartment towers and 60 townhouses in Ghantoot.
Bloom Holding launched Carmona in Zayed City, while Burtville Developments introduced Bab Al Qasr Resort Residence 18 and 19 in Masdar City with 483 units.
Taraf, collaborating with Marriott International, launched W Residences Abu Dhabi on Al Maryah Island, a 37-storey development.
Abu Dhabi off-plan sales plummet 79% annually
Sales activity presented contrasting trends. Total sales volume reached 1,301 transactions, down 42.9% quarterly.
The average sales ticket size increased 8.8% quarterly to AED 2.88 million.
Off-plan sales, representing 28.5% of overall sales, fell 57.7% quarterly and 79.2% annually to 371 transactions, attributed to fewer project launches.
However, the average off-plan price stood at AED 1,585 per square foot, decreasing 8.8% quarterly but growing 8.7% annually.
The average off-plan ticket size reached AED 3.56 million, up 19.2% annually.
Ready property transactions totalled 930 units, down 33.6% quarterly but up 13.6% annually.
Average ready home prices reached AED 1,146 per square foot, increasing 5.8% annually and 7.9% quarterly. The average ready home ticket size hit AED 2.6 million, up 28.9% quarterly and 23.8% annually.
Mortgage transactions dominated the market with 2,846 deals worth AED 9 billion, compared to 1,375 cash transactions valued at AED 5 billion.
Abu Dhabi office rents jump 31.8% annually
The office market showed strong performance, with rising prices and rents amid high occupancy levels, particularly in central business districts. Retail remained resilient, supported by robust foot traffic and tenant sales. Meanwhile, the hospitality sector saw exceptional results, with occupancy and revenue metrics showing significant YoY growth, backed by strong tourism activity,” Tuaima added.
The office market showed strong performance, with asking rents growing 8 % quarterly and 31.8% annually to AED 811 per square metre.
Median asking prices increased 6% to AED 2.25 million. Average occupancy in central business districts reached 90.5%.
Office stock totalled 3.9 million square metres of gross leasable area. Aldar Properties expects to complete the HB Office Tower on Yas Island by year-end, while Masdar City Square will add 50,000 square metres during the second quarter.
Shopping centre stock stood at 1.95 million square metres of gross leasable area. The occupancy rate for Aldar’s retail assets reached 90% during 2024.
Yas Mall recorded 97% occupancy with a 10% increase in tenant sales and 18% rise in footfall. My City Centre Masdar achieved 81% occupancy.
The hospitality sector delivered exceptional results. Hotel occupancy reached 86.9% during the first two months of 2025, up 1.2% from the same period in 2024.
The Average Room Rate stood at AED 683, up 37.1% annually, while Revenue Per Available Room reached AED 594, increasing 38.7% annually.
Abu Dhabi welcomed 5.2 million guests in 2024, a 28.7% increase. The emirate had 34,372 hotel keys as of February 2025, with supply expected to surpass 50,000 by 2030.
Mondrian Hotels will debut its first UAE property in Downtown Abu Dhabi, while Hilton and Aldar will open Abu Dhabi’s first Waldorf Astoria at the former Anantara Eastern Mangroves site.
Industrial property asking prices rose 14.8% annually and 1.5% quarterly.
Warehouse prices ranged from AED 152 to AED 430 per square foot, with modern cold storage facilities commanding premium rates.
Annual rental rates increased 12.3% at the lower end and 17.9% at the higher end, ranging from AED 25 to AED 54 per square foot.
AD Ports Group inaugurated the Al Faya Dry Port between Abu Dhabi and Dubai.
Bisconni Middle East Manufacturing signed a 50-year lease with KEZAD Group for a 37,000 square metre facility, investing AED 110 million.
AquaChemie opened a 25,804 square metre manufacturing facility in KEZAD.
The UAE economy is projected to grow 5% to 6% in 2025, supported by technology, renewable energy, trade, financial services, and infrastructure sectors.
Abu Dhabi’s economy grew 3.8% in 2024, driven by the non-oil sector, with manufacturing contributing 9.5% to GDP and construction recording 11.3%.
The Abu Dhabi Consumer Price Index for February 2025 stood at 106.4 points, stable annually. Housing and utilities increased 2% annually to 101.9 points, the highest in two years.
The US Federal Reserve maintained interest rates at 4.25% to 4.5% as of March 2025. Abu Dhabi’s Murban crude oil price stood at AED 277.1 ($75.5) per barrel as of March 2025.
The UAE’s foreign trade reached AED 3 trillion for the first time by the end of 2024, growing 14.6%.
The UAE aims to double annual foreign direct investment inflows to AED 240 billion and nearly triple total FDI stock to AED 2.2 trillion by 2031.
For a detailed perspective on the property market, visit: Dubai - VPI Residential Capital Values - April 2025
