
Real Estate & Construction
Abu Dhabi’s Real Estate Market in 2025
Image credit: Shutterstock / Tanya Keisha
Certain core factors underpin the strength of a country’s real estate sector, be it investor confidence in sustained economic performance or its appeal as a touristic destination.
Both factors that provide scalability to the real estate sector clearly apply to Abu Dhabi.
Indeed, with tourism being a supporting pillar of the national vision, it stands to reason that the novelty of individual destinations is matched by a massive array of attractions for leisure, lifestyle, and investment.
Then, we add the magnetic effect on foreign direct investment of a diversified economic matrix, which, again, fuels industry verticals across the spectrum of residential, retail, commercial, and industrial development in the twin sectors of construction and real estate.
A solid foundation
Recent improvement to an already appealing investment environment has a catalytic effect on demand for high-end real estate property extending from the record-breaking base of 2024 into 2025.
Transparency advancements introduced last year have been fruitful. In JLL’s 2024 Global Real Estate Transparency Index (GRETI), the UAE’s capital ranked fifth for improvements made from 2022-24.
And in 41st position—up five places—the emirate has profoundly improved in terms of ‘scaling digital capabilities, implementing strong anti-money laundering (AML) and beneficial ownership (BO) regulations, and increasing the availability of market data for established and start-up market providers.’
Building the numbers
The Emirate, like the nation at large, has become a prime global address for high-net-worth individuals.
The nation’s real estate market remains supported by a mix of investment initiatives for property and ongoing infrastructure schemes key to sustained economic performance.
Last year, Abu Dhabi’s real estate market welcomed notable foreign interest from India, Russia, and Canada, all keen to buy into a safe-bet residential market for personal use or return on investment.
In 9M2024, Abu Dhabi’s property sector attracted around USD227 million in FDI, up 363% from 2022, according to UAE-based property consultants Top Luxury Property.
The overall UAE real estate market registered a vertiginous USD243 billion in transactions. Among that total, Abu Dhabi’s real estate transactions tally was at USD21.6 billion generated by 25,046 sales and mortgage deals by year-end.
The Emirate’s Department of Municipalities and Transport in Abu Dhabi records 5,646 transactions for completed units and 9,169 for off-plan properties.
There were 10,230 mortgage transactions valued at USD8.9 billion.
Given the transparency plaudits listed above, in combination with available purchase incentives, there is no indication of a different performance for 2025.
This is certainly the prognosis of Top Luxury Property, which in January forecast 10-12% price increases in the luxury villas, with 6% in affordable apartments and 7-9% in premium ones. The firm also highlights state incentives to ensure the adequate availability of affordable property for citizens—Abi Dhabi is the regional leader in this commitment.
The local government’s stipulations on affordable housing include mandatory affordable housing quotas for new projects, with tax incentives and subsidies for developers meeting affordable housing targets. Additionally, joint state private developer schemes ensure a healthy supply for this segment.
Another factor buoying general investor interest is the inclusion of Reem Island—of which more later—into the Abu Dhabi Global Markets free zone. Foreign investor demand for real estate is also reflected in the 15% YoY rise in residential rents in Abu Dhabi, the most pronounced in a decade, with a 15% YoY rise by mid-2024.
At the same time residential prices climbed 9%. As an added incentive, Ex-pats, tomorrow’s potential investors, today enjoy a streamlined visa process, making Abu Dhabi more welcoming. Moreover, real estate regulations and paperwork, too, have been simplified to the delight of local and foreign investors alike.
What’s selling best?
Unsurprisingly, current findings of the Abu Dhabi Real Estate Centre (ADREC) point to record direct investment in the capital, positioning it firmly among key global property markets over the past two years.
Al Reef and Al Ghadeer have been the more popular choice for affordable apartments, with Al Reem Island and Al Raha Beach being the prime target of those seeking luxury apartments.
Al Reef and Khalifa City remain strong options for more modestly-pried villas, and of course, for those with no financial limit, the luxury villas that grace Yas Island and Saadiyat Island continue to house the high-net-worth individual. A report from Top Luxury Property reveals the following projected price growth for 2025: Luxury Villas: 10-12%; Affordable Apartments: 6-8%; Premium Apartments: 7-9%; Commercial Properties: 5-7%; and Mixed-Use Developments: 8-10%.
Its evaluation of the most promising property sub-sectors by location and return on investment (ROI) puts Luxury Villas on Yas Island and Saadiyat Island on 6-9% ROI, Affordable Apartments in Al Ghadeer and Al Reef on 7-8%, Commercial Office Spaces in the Central Business District on 5-7%, and Mixed-Use Developments at Al Raha Beach and Al Reem Island on 6-8%.
Sound investment
Tourism, as enshrined in its Transformative Tourism Strategy for 2030, is a supporting pillar of Abu Dhabi’s place in the 21st century.
World-renowned attractions include the Louvre Abu Dhabi and, later, the Guggenheim Abu Dhabi. Those, in turn, vie for attention with prestigious international sporting events such as the NBA and Formula 1 Grand Prix.
In short, the something-for-everyone factor prompts demand for hotel beds and hospitality-related facilities, as well as residential property.
Tourist numbers in Abu Dhabi soared by 26% in 10M2024 at close to five million visitors according to Department of Culture and Tourism (DCT) Abu Dhabi data.
With the prospect of generating 178,000 new jobs and raking in revenues of USD 24.49 billion by the end of this decade, it’s small wonder that Abu Dhabi has channeled USD 10 billion into building related infrastructure to accommodate future growth.
Abu Dhabi’s real estate sector is driven by economic diversification that includes strategic investment in tourism, culture and the arts and, not insignificantly, benefits from its climatic advantages. Whether it’s the customer loyalty of high-net-worth individuals making repeat residential purchases, locals becoming homeowners or commercial property commitments, real estate is a winning force.
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