Abu Dhabi’s property market extended its rally in 2Q 2025, with residential prices and rents both accelerating on limited new supply, according to ValuStrat’s latest report (pdf). The ValuStrat Price Index for the capital’s residential sector rose 2.2% q-o-q and 8.1% y-o-y, marking the strongest annual gains since 2022.

Villas led the surge, up 10.1% y-o-y, while apartments climbed 5.9% — the highest annual growth rate for flats in three years. Saadiyat Island posted the steepest villa price gains at 21.2%.

Rents also moved higher: Apartment rents jumped 12.5% y-o-y, outpacing the rate of increase in villas’ rents, with citywide gross yields averaging 8.1%. Occupancy remained robust at 88.1%, underpinning strong end-user demand despite limited handovers.

Supply came in short: Only 7.1% of the 2025 residential pipeline was delivered in 1H, though 33k new units are scheduled by 2030.

Sales activity rebounded after a subdued start to the year. Off-plan transactions rose 53.1% q-o-q but were still down 51.8% y-o-y amid fewer project launches. Still, average off-plan ticket sizes reached AED 3 mn, on the back of prices rising by 38.1% y-o-y.

Meanwhile, ready-home sales climbed 6.4% q-o-q and 3% y-o-y, with ticket sizes averaging AED 2.4 mn — a 6.4% y-o-y price increase. Mortgage-backed agreements accounted for half of all sales, totaling AED 8.3 bn.

HOW THE OFFICE, INDUSTRIAL, HOSPITALITY, AND RETAIL MARKETS FARED-

In the office market, asking rents in central districts surged 28.3% y-o-y and 6.1% q-o-q on 90.5% occupancy. Masdar City Square added 50k sqm of new supply, pushing total stock to 3.9 mn sqm. Industrial real estate also posted gains, with asking prices up 15.9% y-o-y and rents rising as much as 20.2%.

Hospitality saw another strong quarter: Hotel occupancy reached 83.7% for the first four months of the year, with revenue per available room up 26.8% y-o-y. Abu Dhabi now counts more than 34k hotel keys, with supply set to exceed 50k by 2030. A planned Disney resort on Yas Island is expected to further lift demand.

Meanwhile, in the retail sector, shopping center stock stood at 1.95 mn sqm for 2Q — with Yas Mall maintaining a 98% occupancy rate. The redevelopment of Al Jimi Mall is set to expand its footprint to nearly 91k sqm by year-end, while Majid Al Futtaim plans to open more than 30 new stores across the GCC this year, including in Abu Dhabi.

ICYMI- The property market entered 2025 on strong footing, with 1Q marking the steepest capital gains in three years. Residential prices rose 7.2% y-o-y, apartment rents surged 11.6%, and office and hotel segments also posted double-digit growth.

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