11,900 New Homes To Be Delivered In Abu Dhabiby Year End, But Demand For Residential Real Estate Could Outstrip Supply – Cavendish Maxwell
Abu Dhabi is set to add 11,900 new homes to its residential real estate inventory by the end of 2025, but population growth and increased investor interest could mean that demand for housing outpaces supply, according to new insight from leading real estate advisory and property consultant, Cavendish Maxwell.
The UAE capital delivered 600 new residential properties in Q1 this year, meaning a total 12,500 new homes will come to the market by the end of 2025. Another 7,000 are in the pipeline for Abu Dhabi in 2026, Cavendish Maxwell said.
Cavendish Maxwell’s latest report on the Abu Dhabi residential real estate sector also shows that in Q1 2025:
- Sales values reached AED3.7 billion across 1,300 transactions
- Buyers paid an average AED2.5 million per property – the highest quarterly value since Q1 2022
- Apartment prices were up 12.3% on last year, and 4% quarter-on-quarter; villas were 12.5% and 2.4% respectively
- Ready property transactions increased year-on-year and are most in demand, accounting for 900 transactions worth a total AED2.3 billion
- Mortgage values hit AED1.7 billion across 800 loans
- While ready property volumes and values were up compared to the same period last year, they were down quarter-on-quarter, potentially reflecting reduced activity post-festive season and less trading during Ramadan and Eid
Andrew Laver, Cavendish Maxwell Associate Director– Abu Dhabi, said: “The UAE capital is seeing a notable shift towards the secondary residential market, with sustained demand for ready homes and fewer off-plan project launches compared to previous quarters. The average sales transaction reached a record AED2.5 million in Q1, with encouraging signs of broader price appreciation – a trend we expect to continue in the months ahead. Robust bank activity and strong project delivery during the early part of the year underscore the resilience and dynamism of the Abu Dhabi real estate sector.”
Transaction trends …
There were 1,300 residential real estate transactions in Q1, with sales values reaching AED3.7 billion. The majority – 900 – of these were for ready units, with off-plan properties accounting for 400 deals. Off-plan activity declined year-on-year and quarter-on-quarter, mainly because of fewer off-plan launches. Sales of ready properties increased year-on-year.
As would be expected, the reduction in transaction volumes was mirrored by a decline in sales values. Despite the slowdown, the average ticket price on ready sales hit AED2.5 million – the highest recorded value since Q1 2022.
… and sales price stats
Apartments, villas and townhouses all saw price increases of over 12% year on year. Quarter-on-quarter, apartment prices were up 4.1% and villas/townhouses 2.4%. Buyer activity continues to be driven by growing investor confidence, end-user interest, a stable macroeconomic environment and competitive rental yields. In addition, initiatives from Abu Dhabi Government and developers – including flexible payment plans, infrastructure development, long-term residency options and schemes to enhance quality of life in the capital – are stimulating real estate sales and supporting price growth.
Hot locations
The biggest prices rise for villas was in Yas Island (15.5% year-on-year, 3.5% quarter-on-quarter), followed by Saadiyat Island (1.0% and 2.3%). Al Reef prices rose 4.4% and 2.6% respectively.
Villas and town houses gain ground
While apartment sales continue to dominate Abu Dhabi’s residential sector, their market share fell year-on-year, indicating a shift towards villas and townhouses, whose market share showed both an annual and quarterly increase. Growing demand for villas and townhouses is largely from end-users, and in particular from families potentially seeking more space, a garden and place to live long-term.
More mortgages for villas
AED1.7 billion worth of mortgages across 800 individual loans were secured in Q1, with transactions on villas and town houses up almost 60% year-on-year and 3.5% compared to the previous quarter, reinforcing higher demand for these properties and a shift towards end-users. By contrast, there was a decline in mortgage lending for apartments.
Download the full Cavendish Maxwell Dubai Residential Market Performance report here.To contact Cavendish Maxwell, emaildubai@cavendishmaxwell.com or call +9714 453 9525.
