Knight Frank: Annual Residential Price Growth Tops 17% In Abu Dhabi

Abu Dhabi’s residential market continued to grow in Q2 2025, with average prices rising by 6.4% quarter‑on‑quarter to AED 1,230 per sqft, according to the latest Abu Dhabi Residential Market Review from global property consultancy Knight Frank. The Q2 figures bring total annual growth in the emirate to 17.3%, representing a 31.3% increase in values since Q1 2020.

Apartments were the top performer during the quarter, with values increasing by 6.8% to AED 1,296 per sqft. This marks a 17.3% year‑on‑year uplift and is 28.7% above Q1 2020 levels. Al Raha Beach led the apartment market with price growth of 11% since H1 2024, followed by Al Saadiyat Island at 10%. Both locations epitomise the prime beachfront living available in Abu Dhabi, with Al Raha Beach also benefitting from its proximity to the leisure attractions of Yas Island.

Over the long term, villas are the standout for value growth. Prices registered a 3.4% quarter-on-quarter rise in Q2, reaching AED 1,103 per sqft, representing a 42.3% uplift since Q1 2020. Villas on Al Saadiyat Island saw the strongest price appreciation, up 28% year-on-year, followed by Yas Island, where villas experienced a 22% increase.

Faisal Durrani, Partner – Head of Research, MENA, said: “Villas have continued to outperform over the past five years, delivering growth of 35%. In Abu Dhabi, villas make up 37.4% of the total supply pipeline, the rest is apartments. Based on current demand, which is heavily tipped in favour of villas, prices will likely continue outperforming apartments simply because there are not that many villas coming through. When you overlay average prices for villas which stand at around AED 1,100 psf, compared to double that level in Dubai, it is easy to understand why some buyers view Abu Dhabi as better value for money, which for some also offers a more family-friendly lifestyle.”

FUTURE SUPPLY

Supply struggled to keep pace with rising demand during the first half of the year, with residential transactions totalling AED 9 bn during H1 2025, 36% lower than H1 2024.

890 new residential units have been delivered in 2025, however, Knight Frank is tracking 33,074 homes currently under construction and scheduled for delivery by 2029. Apartments comprise 62% of this future supply pipeline.

Yas Island, with its world-class theme parks and beach resorts, is the top location for new supply by some margin, with more than 8,000 units in the pipeline. It is followed by circa 3,000 units planned in the more traditional residential district of Al Shamkha. Meanwhile, new branded residences developed by Aldar for Mandarin Oriental and Nobu bolster the pipeline for Saadiyat Island.

Will McKintosh, Regional Partner – Head of Residential, MENA, said: “There is growing interest in Abu Dhabi from international buyers thanks to the emirate’s excellent leisure and lifestyle amenities, and supportive business conditions, and we therefore expect strong uptake of the 33,000-plus new units coming to market between now and 2029. Our data shows that, of those surveyed, 7% of buyers are interested in off-plan homes, suggesting an increasing desire to purchase property that can be used immediately, whether as a primary residence or holiday home.”

GLOBAL DEMAND

Knight Frank’s Destination Dubai 2025 report identified US$ 1.6 billion of private capital targeting residential real estate in Abu Dhabi, making it the UAE’s second most popular destination for global wealth. Although short of the US$ 10.3 billion aimed at Dubai’s residential market, the fact that average prices in Abu Dhabi (around 1,250 dirhams psf) are about 30% less than in Dubai make it a compelling option for investors and homebuyers alike.

The report found that demand from global high-net-worth individuals (HNWIs) for residential real estate in Abu Dhabi is strengthening, with 19% looking to purchase a home in 2025, up from 14% last year. Demand is especially strong among those worth US$ 30-50 million, with some 75% of potential purchasers in this wealth bracket expressing a desire to own residential real estate, while 65% of individuals worth more than US$ 50 million are looking to purchase a home in Abu Dhabi.

In terms of budgets, around 40% of individuals with private wealth of between US$ 1 million and US$ 5 million are looking to spend up to US$ 2million on a home in Abu Dhabi. Although a similar percentage of those worth more than US$ 20 million are looking to spend over US$ 80 million, unlike Dubai’s super prime focus, the Abu Dhabi market is tilted more towards the lower to mid-range price bracket.

Shehzad Jamal, Partner – Strategy & Consulting, MENA, said: “Some 63% of global high-net-worth individuals interested in buying in Abu Dhabi are doing so for personal reasons; they intend to use the property as their main residence, or holiday home, or for retirement. The remaining 37% are investment-driven. For buyers who may have been priced out of Dubai, or who want to diversify their UAE portfolio, Abu Dhabi is increasingly attractive, with average residential prices growing by around 17% year-on-year.”

To explore the data, read the full Abu Dhabi Residential Market Review.