Abu Dhabi Residential Market Set for Growth: 38,700 Units by 2028

The demand for residential real estate in Abu Dhabi is experiencing a significant uptick, with an estimated 38,700 new units set to be introduced by 2028, according to leading property consultancy Cavendish Maxwell.

Strong Market Performance in 2024

Following a robust performance in 2024, where 9,700 property sales were recorded, totalling AED 26 billion, the sector is primed for continued growth. Cavendish Maxwell’s latest report highlights that this expansion is driven by increased demand and proactive government initiatives.

Projected Residential Supply Growth

This year, Abu Dhabi is expected to see the completion of 10,800 new units, with an additional 6,000 set for delivery in 2026. By the close of 2028, the city's total residential supply will reach approximately 313,700 units. In 2024, around 5,200 new homes were completed, mainly in Al Raha Beach, Yas Island, Masdar City, and Saadiyat Island, pushing the total residential inventory to 275,000 units.

Andrew Laver, Cavendish Maxwell Associate Partner, Abu Dhabi, said: “The residential sector in Abu Dhabi is experiencing steady growth, driven by increased demand from local and international investors as well as strategic Government initiatives such as residency incentives. Sustainable development and innovative housing solutions will be key in shaping the future of capital’s residential property market, with rising demand and price appreciation further boosted by infrastructure expansion and enhanced community offerings.”

Rising Sales and Rental Prices

The property market saw a notable price surge, with apartment prices rising by nearly 11.5% and villa prices increasing by over 12.5% in 2024. Yas Island led these gains, with apartment prices soaring over 20% and villa prices climbing 13%. Rental prices followed a similar trend, with apartments averaging a 13% increase and villas rising by 8%. Yas Island once again recorded the highest rental price hikes, reaching 16% for apartments and 10% for villas. Market analysts predict a steady upward trajectory in pricing this year.

Preference for Ready Properties Over Off-Plan

Investor interest in completed properties surged by nearly 50% in 2024, while off-plan transactions dipped by 13% due to a slowdown in new project launches. Of the 9,700 total sales, 75% were apartment transactions, marking a 63% increase from the previous year. The market saw 7,300 apartment sales worth AED 12.6 billion, while villa and townhouse sales accounted for 2,400 units, totalling AED 13.4 billion—a 44% drop in both volume and value. However, demand for completed villas and townhouses rose significantly, increasing by 47% and 26%, respectively, reflecting investor confidence in the ready property segment.

Surge in Mortgage Transactions

Mortgage activity in Abu Dhabi witnessed a 34% growth in 2024, with nearly 5,000 mortgages totaling AED 7.1 billion. Loans for apartments dominated this sector, registering a 66% increase in volume and a 55% rise in value. Declining interest rates, improved investor confidence, and appealing bank financing options contributed to this surge in mortgage demand.

New Project Launches Shape the Market

Abu Dhabi introduced nearly 40 new residential projects in 2024, adding 11,000 units to the housing market. Al Reem Island led the way with 2,000 new units, followed by Saadiyat Island with 1,800 and Al Bahyah with 1,700. Aldar Properties solidified its position as a market leader, unveiling 12 projects that collectively introduced 4,000 units. The performance of the off-plan market in 2025 will depend on the number of new project launches, as a slowdown in developments could lead to a reduction in off-plan sales volume and value.