Early estimates from the Statistics Centre – Abu Dhabi (SCAD) indicate that Abu Dhabi’s economy grew well in 2024, with real GDP increasing 3.8% annually to surpass the previous record of AED 1.2 trillion. The non oil sector continues to show an impressive contribution of 54.7% to the GDP with a record growth of 6.2%. The International Monetary Fund (IMF), building on this momentum, projects additional acceleration, with GDP predicted to expand by 5.8% in 2026 and 4.2% in 2025.
The International Monetary Fund has projected additional acceleration with GDP expected to expand by 4.2% in 2025 and 5.8% in 2026.
Abu Dhabi’s residential real estate market showed resilience in the phase of a brief dip in transactional volumes during Q1 2025 which was primarily caused by seasonal reasons and a lack of new project launches. This was consistent with the larger macroeconomic expansion. About 1,300 residential transactions were made in the emirate with rising average ticket prices and ongoing momentum in the ready to move-in property market.
The residential market is projected to continue growing steadily in the future due to numerous factors like population expansion, investor demand and government initiatives that encourage long-term residency and economic diversification. Demand is expected to keep exceeding supply which in result increases both sales and rental rates. Currently there are over 11,900 residential properties scheduled for delivery in the remaining months of 2025.
📊 Abu Dhabi Real Estate Market Pulse – Q1 2025
- The Emirate’s economy continues to move with confidence, with a projected GDP growth of 4.2% for 2025.
- Residential sales activity took a hit, recording just 1,300 total transactions, marking a sharp 56.4% decline from Q1 2024. But it wasn’t all gloom.
- Ready properties stood resilient, growing by 7.0% year-over-year with 920 transactions, valued at an impressive AED 2.3 billion — a 70.4% surge in value.
- On the flip side, off-plan activity plunged, with only 380 transactions (an 82% drop) and values tumbling 74% to AED 1.4 billion.
- Mortgage activity slowed:
- A total of 800 residential mortgage deals were recorded, down 27.4%, although the total value dipped only slightly by 0.7%, landing at AED 1.7 billion — signaling higher-value financing despite the drop in volume.
- Supply dynamics are steady:
- 600 new residential units were delivered in Q1.
- A total of 11,900 units are scheduled for delivery across 2025, shaping a pipeline that could shift market momentum.
Macroeconomic Overview and Outlook
The Emirate’s economy grew well in 2024, according to estimates from the Statistics Centre – Abu Dhabi (SCAD), with real GDP reaching a record AED 1.2 trillion, up 3.8% year over year. The non-oil sector was a major contributor to this increase, growing at the fastest rate ever, 6.2%, which raised its share of the overall GDP to 54.7%, the greatest yearly contribution ever.
Abu Dhabi’s effective diversification initiatives to lessen dependency on hydrocarbons and create a robust and sustainable growth model for the coming decades are reflected in the non-oil sector’s good performance across a wide variety of economic sectors. Construction and manufacturing were leading the way as both of these sectors achieved new output records and held onto their respective GDP shares of AED 107.4 billion (9.1%) and AED 111.6 billion (9.1%). The Emirate’s increasing popularity as a commercial and investment hub is further evidenced by the 16.0% rise in new economic licenses granted on the mainland.
The International Monetary Fund (IMF) forecasts Abu Dhabi’s economy to grow by 4.2% in 2025 and 5.8% in 2026 and this is mainly due to the solid foundation laid in recent years and surpassing international standards. All of this is being done while keeping the inflation low, controlling the national debt and preserving a positive trade balance.
This economic success demonstrates the ongoing efficacy of Abu Dhabi’s investor-focused regulatory structure, open governance and business-friendly policies.
Sales Deals
Abu Dhabi City registered about 1,300 residential sales transactions in the first quarter of 2025, of which about 900 were ready sales and 400 were off-plan sales. A decrease in off-plan activity occurred both quarterly and annually, primarily as a result of fewer new project launches. Ready sales rose year over year despite a decline from the prior quarter, suggesting that there is still a market for finished homes despite temporary swings. Reduced business days during Ramadan and Eid which came within the reporting period, may possibly have had a seasonal impact on the overall decrease in activity.
Abu Dhabi City Transactions – By Volume
Both on a quarterly and annual basis, transactional value decreased in tandem with the reduction in transaction numbers. With ready properties making up the largest portion at AED 2.3 billion, the overall transactional value of residential sales in Abu Dhabi City in Q1 2025 reached AED 3.7 billion.
The average ticket price for ready transactions rose both quarterly and annually despite the recession, hitting AED 2.5 million in Q1 2025, the highest amount in recent memory.
Abu Dhabi City Apartment Transactions – By Volume
Apartments continued to dominate Abu Dhabi City’s residential market activity in Q1 2025, accounting for 65.7% of all sales transactions. Even though they are still the most popular kind of real estate, their market share decreased in comparison to the same time last year and overall sales volume also decreased.
Volumes of apartment transactions decreased by 60.5% annually and 53.1% quarterly. Activity decreased in both the ready and off-plan categories, with the off-plan market seeing the biggest drop.
Townhouses and Villas Sales
As compared to apartments, ready-to-move-in villa and townhouse transaction volumes rose both quarterly and annually, indicating consistent end-user demand, especially from families searching for greater space and possibly wishing to make the city their permanent home. However, because there were fewer new project launches around that time, off-plan villa and townhouse transactions decreased.
Transactions involving mortgages
Residential mortgage activity decreased on a quarterly and annual basis, mostly as a result of fewer apartment mortgage transactions, which was consistent with the general drop in sales transaction volumes. In contrast, there was a rise in mortgage activity for townhouses and villas, suggesting that end users rather than investors made up the majority of buyers this quarter. Given the higher ticket costs linked to these property types, this tendency indicates stronger end-user demand, which usually depends more on mortgage financing.
Villas and townhouses accounted for AED 1.3 billion of the AED 1.7 billion in residential mortgage transactions that took place in the first quarter of 2025. The significant increase in average mortgage ticket prices throughout the quarter indicates that there was also more activity in higher-value houses.
Current and Upcoming Supply
In the first quarter of 2025, about 600 residential units were delivered; 11,900 more are anticipated for the rest of the year and an additional 7,000 are anticipated for 2026. Demand is predicted to surpass supply in 2025 due to population increase and growing end-user interest, even if the incoming supply pipeline seems solid. The Abu Dhabi government’s initiatives to create and attract knowledge-based industries—a tactic meant to lure in foreign talent and sustain long-term housing demand—further encourage this need.
Furthermore, by making it simpler for qualified professionals and investors to live and work in Abu Dhabi, residency pathways like the Golden Visa and other long-term visa programs are anticipated to encourage population growth and increase demand for high-quality residential real estate.
Changes in Abu Dhabi Sales Prices
In Q1 2025, apartment prices continued their upward trajectory, rising 4.1% on a quarterly basis and 12.3% on an annual basis. Demand stayed high despite a slowdown in transactional volumes, helped by steady end-user interest and investment confidence. A stable macroeconomic climate and competitive rental yields, especially in desirable areas, are the main drivers of this resilience.
Additionally, the Abu Dhabi government’s and developers’ efforts—such as flexible payment plans, infrastructure development, long-term residency possibilities and quality-of-life initiatives—have supported price growth and stimulated buyer interest.
The demand for villas was still high in Q1 2025, as evidenced by sales prices rising 2.4% from quarter to quarter and 12.5% from year to year. Yas Island and Saadiyat Island also saw significant increase.
Changes in Abu Dhabi Rental Rates
Occupancy rates have increased gradually as demand continues to exceed supply. This has been aided by population expansion, an economic recovery and improvements in the labor market, which have attracted a continuous stream of foreign workers. Rental growth has been fueled by this combination, as apartment rental prices have increased by 12.8% annually and 3.2% quarterly.
The cost of renting a villa increased 4.3% annually and 0.9% quarterly. Nonetheless, certain neighborhoods, like Saadiyat Island and Yas Island had quarterly drops which most likely reflected a temporary seasonal shift in rental costs. The growing number of family families looking for greater living areas is projected to fuel the market for villas even in the face of these declines.
Outlook for the Real Estate Market in 2025
The view for the rest of 2025 is still stable and optimistic, even if the first quarter saw a decrease in activity that was mostly caused by a lack of new project launches and seasonal factors like fewer trade days during Ramadan and Eid. Strong demand from investors and end users, continuous economic diversification, proactive government policies and a constant flow of relocations brought on by job expansion, long-term residency programs and general improvements in quality of life all support this. The size and timing of new project launches will determine how well the off-plan segment performs, even though ready transaction activity is predicted to stay consistent throughout the year.
Regarding future supply, it is anticipated that 11,900 residential units will be delivered throughout the remaining months of 2025. Actual completions, however, are probably going to be less than this estimate. Consequently, it is anticipated that demand will continue to exceed supply, pushing up both sales and rental prices. Even though this mismatch might lead to additional price increases, the rate is probably going to stay consistent and controlled due to continued end-user demand and a more controlled market environment.
Overall, the outlook for the residential market in Abu Dhabi in 2025 is still bright, bolstered by the emirate’s continuous infrastructural development as well as demographic and economic fundamentals.
How Henry Wiltshire International is handing the situation!
As demand continues to outpace supply, we see this as more than a market surge—it’s a strategic pivot for Abu Dhabi real estate,” shares the team at Henry Wiltshire International, a multi-award-winning brokerage with 11+ years of experience in the city. We’ve adapted by:
- Expanding our portfolio in high-demand areas like Saadiyat and Yas Islands
- Using verified insights from Quanta, which show a 6% rise in ready property prices and a 13% spike in off-plan transactions
- Elevating our market expertise through hyper-local specialization, enabling tailored advice for clients with diverse investment and lifestyle goals
- Communicating current real estate market updates with home and property owners
For buying, leasing or selling a property in Abu Dhabi, contact us at +971 56 484 3380
