Abu Dhabi’s residential real estate market is set for a significant supply boost, with 11,900 new homes expected to be delivered by the end of 2025. However, rising population figures and growing investor interest could result in demand surpassing available inventory, according to a new report by real estate consultancy Cavendish Maxwell.
The emirate added 600 residential units in the first quarter of the year, bringing the total projected deliveries for 2025 to 12,500 homes. Looking ahead, another 7,000 units are expected to enter the market in 2026, the consultancy said.
Cavendish Maxwell’s analysis of the first quarter revealed a strong start to the year, with total sales transactions reaching AED 3.7 billion across 1,300 deals. The average transaction value stood at AED 2.5 million—the highest quarterly figure recorded since the first quarter of 2022. Apartments continued to dominate transaction volumes, but villas and townhouses have started to gain ground, reflecting a shift in buyer preferences.
“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,” said Andrew Laver, Associate Director – Abu Dhabi, at Cavendish Maxwell. “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. Robust bank activity and strong project delivery during the early part of the year underscore the resilience and dynamism of the Abu Dhabi real estate sector.”
Out of the 1,300 transactions, 900 were for ready properties, with the remaining 400 attributed to off-plan sales. While ready property volumes and values rose year-on-year, there was a slight dip compared to the previous quarter, likely due to the seasonal slowdown following Ramadan and Eid. Despite this, the average ticket size for ready properties continued to climb, underpinned by healthy demand and limited new launches.
Prices across all residential segments posted robust gains. Apartment prices rose 12.3% year-on-year and 4.1% quarter-on-quarter, while villas and townhouses recorded increases of 12.5% annually and 2.4% from the previous quarter. The upward momentum in pricing has been supported by a combination of investor confidence, stable economic conditions, and a range of government and developer-led incentives, including long-term residency programmes, infrastructure improvements, and flexible payment schemes.
Yas Island led villa price growth with a 15.5% year-on-year increase and a 3.5% quarterly gain. Saadiyat Island and Al Reef also posted notable increases, underscoring the growing appeal of premium and mid-market communities among end-users and families seeking larger, long-term living spaces.
The mortgage market also reflected strong end-user interest, with AED 1.7 billion in lending recorded across 800 home loans in the first quarter. Notably, mortgage transactions for villas and townhouses increased by almost 60% year-over-year and 3.5% quarter-over-quarter, while lending for apartments declined, reinforcing the growing demand for larger, family-oriented residences.
While apartments continue to dominate in terms of transaction volume, their market share declined over the past year, signalling a shift in consumer preference. Villas and townhouses saw a corresponding increase in both annual and quarterly market share, driven by end-user demand and a desire for more space and amenities.
The combination of resilient end-user demand, favourable lending conditions, and a stable policy environment continues to lend support to Abu Dhabi’s residential property market. With limited new supply in the offing beyond 2025 and healthy absorption of existing inventory, pricing trends are expected to remain firm in the near term.
