Abu Dhabi Villas See Rising Popularity

Abu Dhabi's Real Estate Market: Villa Demand Surges Due to Apartment Shortage

Abu Dhabi's real estate market is dynamically transforming. Fresh data for the second quarter of 2025 indicates that demand for villas is continuously rising, while the supply of apartments cannot keep pace with the demand. Investment in luxury properties continues to attract affluent foreigners, yet more buyers are now choosing Abu Dhabi primarily for living purposes – whether for family homes, vacation spots, or retirement.

Why Are Villas Most Sought After?

In the past five years, villa prices in Abu Dhabi have increased by 35%, currently accounting for 37.4% of available inventory. Experts suggest this proportion will further decline, as demand significantly outstrips the newly built villa stock. The current average price per square foot for villas is approximately 1,100 dirhams – roughly half of what is observed in Dubai. This makes Abu Dhabi a more attractive value proposition for many.

Villa prices on Al Saadiyat Island rose by 28% last year, and on Yas Island by 22%. Both locations offer unique appeal to buyers, thanks to nearby beaches, cultural sites, and recreational facilities.

Apartments: Rising Prices, But Limited Supply

The capital's housing market is also strengthening; apartment prices grew by 6.8% in Q2 2025 and 17.3% annually, reaching 1,296 dirhams per square foot. The largest increases were in Al Raha Beach (11%) and Al Saadiyat Island (10%). These areas represent the premium beachfront lifestyle, especially for those looking to avoid the congestion of Dubai.

What's Driving the Demand?

According to a survey by international real estate consultant Knight Frank, 63% of buyers purchase for personal use – primarily permanent residence, vacation home, or retirement property. The proportion of investment-driven purchases is 37%. For many, Abu Dhabi represents "attainable luxury": favorable pricing, a family-friendly environment, and a more relaxed lifestyle.

Supply Constraints and Future Developments

In the first half of 2025, the total value of residential real estate transactions was 9 billion dirhams, 36% lower than the same period of the previous year, mainly due to limited supply. Only 890 new units were completed, while 33,074 properties are under construction, of which 62% are apartments.

Yas Island leads the new project list with over 8,000 planned units, followed by Al Shamkha with approximately 3,000 units. Saadiyat Island is also gaining momentum with branded residential developments by Mandarin Oriental and Nobu.

Outlook to 2029

Based on current and planned supply, the Abu Dhabi market is poised for further growth. Global interest is rising, particularly due to the premium lifestyle and business-friendly environment. Knight Frank forecasts that over 33,000 new residential units may hit the market in the next four years, many in off-plan construction. Buyers are increasingly seeking properties ready for immediate use or available in the short term.

(The article is based on research by real estate market experts.)