Abu Dhabi real estate outlook 2025: 11,900 homes, soaring villa prices, and record sales

Abu Dhabi’s residential real estate market is showing strong signs of growth, with demand for ready properties, particularly villas and townhouses, pushing prices higher and shifting buyer interest away from off-plan projects. According to a new report by real estate consultancy Cavendish Maxwell, the emirate is expected to deliver 11,900 new homes by the end of 2025, but rising population and investor appetite could soon cause demand to outstrip supply.

The UAE capital saw 600 new residential units delivered in Q1 2025. With an additional 7,000 homes planned for 2026, the pipeline remains robust. However, high levels of demand – especially for completed units – are already placing upward pressure on prices.

In Q1 2025, Abu Dhabi recorded 1,300 residential transactions with a total sales value of AED 3.7 billion. The average transaction value hit AED 2.5 million – the highest quarterly average since Q1 2022.

According to Andrew Laver, Associate Director at Cavendish Maxwell, “The UAE capital is seeing a notable shift towards the secondary residential market, with sustained demand for ready homes and fewer off-plan project launches compared to previous quarters. The average sales transaction reached a record AED 2.5 million in Q1, with encouraging signs of broader price appreciation – a trend we expect to continue in the months ahead.”

Ready property sales dominated market activity in Q1, accounting for 900 out of the 1,300 transactions, with a total value of AED 2.3 billion. Off-plan transactions dropped to just 400 deals, reflecting fewer new project launches and a clear buyer preference for completed units.

Despite a quarter-on-quarter dip in overall transaction volume and value, partly attributed to the post-festive period slowdown and reduced activity during Ramadan and Eid, the average deal value for ready properties rose to a record high.

The biggest shift in buyer preferences was seen in the growing demand for villas and townhouses. Transaction volumes for these property types jumped almost 60% year-on-year and 3.5% quarter-on-quarter, driven largely by end-users and families seeking more space, private gardens, and long-term living options.

Popular villa locations saw notable price increases:

• Yas Island: Up 15.5% year-on-year, 3.5% quarter-on-quarter
• Saadiyat Island: Up 10% annually, 2.3% quarterly
• Al Reef: Up 4.4% annually, 2.6% quarterly

Meanwhile, mortgage activity for villas and townhouses also grew, while apartment lending declined, further highlighting the shift in buyer demand.

The strong performance of Abu Dhabi’s residential sector is being bolstered by multiple factors, including a stable macroeconomic environment, growing investor confidence, and attractive rental yields. In addition, initiatives from the Abu Dhabi government and developers, such as flexible payment plans, long-term residency schemes, and infrastructure upgrades, are driving both sales and price appreciation.

This article was originally published in Construction Week.