Despite global uncertainty, Abu Dhabi’s real estate market shows resilience and growth

Despite global uncertainty, Abu Dhabi's real estate market shows resilience and growth

Despite global economic challenges, Abu Dhabi’s real estate market performed well in the first half of 2025, solidifying its standing as a long-term capital haven.

The H1 2025 report from Driven Properties states that the emirate’s real estate market profited from increased institutional interest, infrastructure-led development, and fiscal restraint.

Off-plan properties: Before leveling off to Dh1,127 per square foot in H1 2025, prices rose from Dh487 per square foot in H1 2019 to a peak of Dh1,350 per square foot in H1 2024. Developers’ more practical pricing tactics, in line with supply schedules and market saturation, are reflected in this moderation. However, because the Abu Dhabi Municipality only records original launch prices and not secondary market premiums, official data may understate actual resale values. This means that the resale market is probably greater than stated.

Prices for ready-to-move-in properties started at Dh966 per square foot in H1 2019, dropped to Dh680 per square foot in H2 2020 due to the pandemic, and then progressively increased to Dh1,086 per square foot in H1 2025. Increased end-user demand, better inventory quality, and the allure of instant occupancy and rental income are the main drivers of this recovery.

Segment convergence: A maturing market is shown by the price difference between ready and off-plan units, which has decreased to just Dh41 per square foot. While developers are setting more conservative prices for new launches, buyers are becoming more aware of the value in completed inventory.

Yield stability: Over the previous five years, gross residential rental yields have continuously hovered between 5.9% and 6.3%. With the help of capital value stabilization, robust rental demand, and population expansion, yields rose to 6.2% in H1 2025. Abu Dhabi’s attraction to yield-focused investors is strengthened by this constancy.

All things considered, the residential market is growing more investor-friendly and providing opportunities at every stage of the project lifecycle, from income-generating ready units to speculative off-plan investments. Abu Dhabi’s appeal to both domestic and foreign investors is further increased by its transparent pricing, minimal transaction costs, and zero property taxes.

Top performing communities

Due to the affordability and activity of mid-tier apartments, Al Reem Island had the highest volume of transactions. Prices increased 10.7% from H2 2024 to Dh1,194 per square foot. Due to its ultra-prime positioning and exclusivity, Nurai Island and Saadiyat Island continued to be the most expensive submarkets, with prices of Dh3,068 and Dh2,342 per square foot, respectively.

Key drivers of growth

Infrastructure Development: The UAE’s national rail system has advanced toward complete connectivity, and future high-speed service is predicted to reduce travel times between Abu Dhabi and Dubai to 30 minutes.

Regulatory innovation: The introduction of the blockchain-based property data platform Madhmoun improved transactional efficiency and market transparency.

Global investor confidence: The demand for executive and commercial homes increased when Disney announced the opening of its first Middle Eastern theme park on Yas Island and the growth of Abu Dhabi Global Market (ADGM), drawing in big players like Morgan Stanley and BlackRock.

Strategic capital allocation: “Collateral-backed cash flows” are becoming more and more popular among investors, and Abu Dhabi real estate offers inflation-linked returns and fiscal stability.

Office market trends

Due to demand from international financial institutions, Grade A assets in ADGM and free zones surpassed 95 percent, while non-free zone office occupancy remained stable at 90.3%. Premium assets are outperforming older stock that lacks contemporary conveniences, causing the market to split.

Outlook

Abu Dhabi, which provides yield-accretive opportunities and policy clarity amidst global volatility, is becoming a key allocation market in the GCC. The emirate is in an excellent position to draw in both domestic and foreign investment in the second half of 2025 because to ongoing infrastructure investment, regulatory reforms, and strong governmental support.

“In a global environment characterised by elevated rates, stagflationary tail risks, and geopolitical bifurcation, Abu Dhabi stands out for its clarity of policy, investability, and potential for long-term alpha generation. For allocators seeking regional diversification and inflation-aligned cash flows, the case for real estate is not only intact — it is strengthening,” the report stated.

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