Abu Dhabi is expected to deliver around 11.9k new residential units over the rest of 2025, though completions may fall short of projections, according to Cavendish Maxwell’s latest Abu Dhabi Residential Market Performance report (pdf). The capital’s housing market had a sluggish start to the year, with sales activity plunging even as prices continued to rise.

Only 600 units were completed in 1Q, contributing to a drop in residential sales to just 1.3k transactions in 1Q 2025, down 56.4% y-o-y and 46.6% q-o-q. The slowdown was driven by a sharp decline in off-plan activity — by some 82% y-o-y — amid fewer new launches, alongside the seasonal impact of Ramadan and Eid. Ready sales fared slightly better at 900 transactions, down only 13.3% y-o-y.

Average ticket size for ready units rose to AED 2.5 mn — the highest in recent quarters. Still, the total value of residential sales declined 44.6% y-o-y to AED 3.7 bn, with ready properties accounting for AED 2.3 bn.

Apartments made up 65.7% of all transactions, though volumes fell 60.5% y-o-y and 53.1% q-o-q, and the segment’s market share also saw a downturn. Both ready and off-plan segments declined, with the latter seeing the steeper drop. On the other hand, ready villa and townhouse sales rose 10.4% y-o-y, reflecting stronger demand from families and long-term residents.

Despite weaker volumes, prices continued to climb: Apartment prices rose 12.3% y-o-y during the quarter, led by Al Reem Island and Yas Island, which saw prices rise by over 13%. Villa prices increased 12.5% y-o-y, with the strongest growth also seen on Yas Island, which saw prices rise by 15.5% y-o-y, and Saadiyat Island, up 10.6%.

The rental market also stayed strong, on the back of expat-driven population growth. Apartment rents rose 12.8% y-o-y and 3.2% q-o-q, with Yas Island and Al Reem Island leading y-o-y gains. Villa rents were up 4.3% y-o-y but remained largely flat q-o-q, with some seasonal declines in Saadiyat Island.

How mortgages fared: Total mortgage volumes dropped 44.5% y-o-y to 800, driven by reduced apartment financing. Villa and townhouse mortgages, however, surged 58.1% y-o-y, accounting for AED 1.3 bn of the AED 1.7 bn in residential lending and pointing to a shift toward higher-value, end-user purchases.

Looking ahead: Despite the muted start, the report projects stable momentum for the rest of 2025, supported by population growth, long-term visa programs, and government-backed economic diversification. Demand is set to outstrip supply, despite the 11.9k units expected to be delivered this year and 7k in 2026. Any recovery in off-plan sales “will depend on the scale and timing of new project launches,” the report noted.

ICYMI- Cavendish Maxwell’s findings broadly align with EFG Hermes’ 1Q 2025 tracker, which also reported a sharp decline in off-plan sales, continued price growth, and a firm rental market.

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