The UAE real estate market saw some tremendous highs in 2024 with a notable increase in prime and super prime sales across both the secondary and off-plan sectors. New records were set in Dubai communities like Jumeirah Bay Island and Dubai Hills Estate, and Abu Dhabi witnessed its most expensive villa sale yet – an incredible AED 130 million villa on Saadiyat Island. The total value of transactions in the UAE at the end of the year stood at AED 893 billion ($243 billion) from 331,300 deals.
Dubai claimed the lion’s share of the market in 2024, generating a staggering AED 522.5 billion in transaction value – an increase of 27.2% from the previous year. Though modest by comparison, Abu Dhabi’s real estate market also demonstrated a solid performance, with a total of AED 47.9 billion in transactions. Abu Dhabi has become a significant market of interest of late, with steady growth in its residential sector, and the introduction of legislative changes that are aimed at increasing the level of foreign investment coming into the emirate.
Recap of Abu Dhabi Real Estate in 2024
ADGM, Abu Dhabi’s financial centre and a key commercial authority, made significant changes to Abu Dhabi’s real estate infrastructure last year. Enhancements were made to off-plan property legislation, including the introduction of escrow to allow for more efficient fund management. New regulations were also introduced for short-term rentals, though perhaps the most important announcement was the introduction of AccessRP, a unified digital real estate platform. AccessRP is designed to provide a common space where property owners, developers and property managers can avail of key services and manage them with ease.
Witnessing continued growth as a major urban centre, Abu Dhabi saw more than AED 834 million in foreign investment over the second half of 2024, an increase of over 350% from the same period in 2023. The majority of that investment was in the luxury sector, underscoring Abu Dhabi’s position as an emirate for the refined and the discerning.
So, how does Abu Dhabi’s luxury real estate market look in 2025, and what are some of the key trends we might see? Here are our thoughts on what to expect.
Growth in Branded Residences
Across the world, the popularity of branded residences continues to surge. The UAE is one of the top three destinations for branded residences, the majority being located in Dubai. Understandably, other emirates are seeking the unique draw that established hospitality brands provide. One of the most talked about launches in recent years is Wynn Al Marjan Island, which is the first gaming resort in the region, following in the footsteps of its predecessors in Las Vegas and Macau. Abu Dhabi is building its profile in this space with new launches such as Four Seasons Private Residences at Al Maryah Island and Mandarin Oriental Residences on Saadiyat Island.
Over the course of 2025, we can anticipate several more launches of branded projects that will not only help to cement Abu Dhabi’s position as a premier destination for real estate investment, but will also further its credentials as a key pillar of the UAE’s property market.
The Year of Off-Plan
In 2024, the off-plan sector in Abu Dhabi performed extremely well, accounting for over 55% of transaction volume and almost 64% of the total value. On a quarter-by-quarter basis, the ready and off-plan markets were fairly neck-and-neck. However, given the scarcity of new off-plan launches throughout the year, the performance of the off-plan sector has been particularly noteworthy and underscores Abu Dhabi’s rising appeal in the eyes of investors.
With more projects slated to launch in 2025, the off-plan sector has another potentially stellar year in store. Enhanced regulations for the sale and marketing of off-plan residences introduced last year will also increase confidence amongst global investors who will be turning their eyes toward this burgeoning market.
The Bilbao Effect
Abu Dhabi has positioned itself as the cultural headquarters of the UAE with its array of centres for arts and culture, though its global presence was catapulted to new heights with the opening of Louvre Abu Dhabi in 2017. Since then, the emirate has solidified its brand as a cultural destination, attracting a higher calibre of property buyers and, by extension, raising the value of properties located near major attractions.
Also known as the ‘Guggenheim Effect’, this phenomenon refers to when a city experiences urban and economic growth as a result of investment in iconic landmarks and cultural institutions. It’s an apt term for the Abu Dhabi market, as the Guggenheim Abu Dhabi on Saadiyat Island is expected to formally open its doors in 2025.
The Guggenheim is anticipated to unleash its eponymous effect shortly after opening, and to help transform Saadiyat Island into a regional epicentre for culture.
Rental Surge
Last year, Abu Dhabi’s rental prices saw their highest growth in the span of a decade, with a year-on-year increase of 15%, outpacing the sales market which saw a 9% increase in price. This is a testament to the soaring demand for rentals in the emirate, where even rising prices have done little to slow the pace of transactions.
In August, the first Abu Dhabi Residential Rent Index was launched to track and regulate rental growth, and to introduce a greater level of transparency for both tenants and landlords. With supply continuing to lag behind demand, we can expect to see further price increases across the market in 2025.
Historically, the super prime market in Abu Dhabi has catered primarily to GCC nationals. For international buyers, real estate in the capital is significantly undervalued in relation to the potential it holds. In 2024, a new record was set for the most expensive villa which sold at AED 130 million - a relatively understated figure compared to some of the record-breaking sales in Dubai, but one that highlights how much room the market has to grow.
This year, all eyes will be on Abu Dhabi’s prime and super prime market. The emirate’s ‘cultural renaissance’ in recent years, driven by developments in key areas like the Saadiyat Cultural District, has made it an attractive prospect for aficionados of art and design. Forward-thinking investors are already showing great interest in Saadiyat Island and the neighbouring Al Maryah Island. As the emirate continues to grow in 2025, this will undoubtedly lead to new pricing benchmarks for the real estate sector.