Abu Dhabi's property market delivered impressive results in the first quarter of 2025.
According to the latest report from ValuStrat, capital growth rates were the highest in three years, despite a decline in the number of transactions due to limited supply in the market.
The ValuStrat Price Index (VPI) rose to 125.6 points, up 2.1% on the previous quarter and 7.2% on the same period last year. Villas performed best, with prices rising 2.7% quarter-on-quarter and 9.7% year-on-year to 134.7 points. Apartments rose 1.5% quarter-on-quarter and 4.5% year-on-year, with the index reaching 116.99 points.
Haider Tuayma, Managing Director of ValuStrat, said: "Abu Dhabi is experiencing steady growth in property prices while sales volumes are declining due to the limited availability of new supply. The average property price reached 10,226 dirhams per square metre in the first quarter of 2025. Apartments were valued at an average of AED 10,979 per square metre, while villas were valued at AED 8,407 per square metre. Among the areas with the highest value growth for villas, Saadiyat Island topped the list with an annual growth of 21.2%. This was followed by Al Raha Island (+8.2%) and Mohammed Bin Zayed City (+4.7%). In the residential segment, Al Riffa recorded the highest growth at 7.5%, followed by Saadiyat Island (+6.2%) and Al Munirah (+5.7%).
The rental market also showed a steady upward trend. The Residential Rental Index rose by 2.2% for the quarter and 9% for the year, reaching 121 points. Apartment rents rose by 3.4% for the quarter and 11.6% for the year. In contrast, villa rents rose by 6.3% year on year, but the quarterly figures remained stable. The average annual rent for an apartment was AED 114,000, ranging from AED 63,000 for a studio to AED 180,000 for a three-bedroom apartment. The average rental price for villas was 245,000 dirhams per annum, ranging from 180,000 dirhams for a three-bedroom villa to 312,000 dirhams for a five-bedroom villa.
Investment attractiveness remained high, with gross yields averaging 7.8% (8.3% for apartments and 6.7% for villas). The occupancy rate reached 88.1%.
In the construction sector, only 279 units were completed in the first three months of 2025: 90 apartments and 189 villas, representing only 2% of the 13,941 units planned for completion. Despite this, leading developers are still actively launching new projects. These include Aldar with the Mamsha Gardens complex on Saadiyat Island, IMKAN with the Naseem Al Jurf project in Gantut, Bloom Holding with the Carmona residential complex and Burtville Developments with two projects in Masdar. Taraf, in partnership with Marriott International, launched W Residences Abu Dhabi, a 37-storey luxury residential development on Al Maryah Island.
Property sales showed mixed dynamics. The total number of transactions fell to 1,301, down 42.9% from the previous quarter.
Sales of under-construction properties fell particularly sharply, by 57.7% in the quarter and 79.2% year-on-year. Despite this, the average price per square metre in this segment remained at AED 1,585. At the same time, the average transaction value in the under construction segment increased by 19.2% to AED 3.56 million.
Completed homes also saw a decline in activity, with the number of transactions falling by 33.6% during the quarter, although the annual growth rate was 13.6%. The average price increased by 5.8% year-on-year and 7.9% quarter-on-quarter to reach AED 1,146 per square metre. The typical transaction for a completed property was AED 2.6 million.
Mortgage transactions dominated in Abu Dhabi during the first quarter of 2025. Of the 4,221 sales contracts totalling AED 14 billion, 2,846 were mortgage-backed, with the remainder paid in cash.
The office market also gained momentum. Rental rates in this segment increased by 8% for the quarter and 31.8% for the year to reach AED 811 per square metre. The average cost of office space was AED 2.25 million and the occupancy rate in the business districts reached an impressive 90.5%. There are 3.9 million square metres of office space on the market. Key projects such as Aldar's HB Office Tower and Masdar City Square are expected to be completed in the near future.
Thus, the Abu Dhabi real estate market continues to demonstrate steady growth and high investment attractiveness, despite some corrections in sales dynamics.