Apartments lead rent hikes, villa prices rise—but limited availability keeps pressure on
Last updated: August 11, 2025
Dubai: Abu Dhabi property prices continued to edge up in Q2 2025, but for residents, the big story is rents—especially for apartments—which are rising at their fastest pace in years.
With limited new supply delivered so far this year, competition for housing is heating up. The latest ValuStrat Price Index (VPI) shows capital values across the emirate rose 2.2% quarter-on-quarter and 8.1% annually, continuing the steady upward trend since 2021.
Apartments outpace villas in rent, price rise
Apartment values rose by 1.7% QoQ and 5.9% YoY—marking the strongest annual growth for flats in three years. Villa prices, while still higher overall, grew at a faster clip: up 2.6% QoQ and 10.1% YoY.
- Average apartment price: Dh11,162 per sq m (Dh1,037 per sq ft)
- Average villa price: Dh8,557 per sq m (Dh795 per sq ft)
- Citywide average home price: Dh10,398 per sq m (Dh966 per sq ft)
Top annual price gains for villas:
- Saadiyat Island: +21.2%
- Al Raha: +7.3%
- MBZ City: +5.1%
Top annual price gains for apartments:
- Saadiyat Island: +8%
- Al Reef: +7.3%
- Al Muneera: +7%
- Al Reem Island: +5.8%
Rents see sharpest jump in years
Rental values across Abu Dhabi rose 1.5% QoQ and 9.5% YoY in Q2. Apartment rents were the clear driver—up 2% QoQ and a record 12.5% YoY—while villa rents grew 7% YoY but remained flat over the quarter.
Average asking apartment rents:
- Studio: Dh65,000
- 1-bed: Dh91,000
- 2-bed: Dh128,000
- 3-bed: Dh183,000
Quarterly growth leaders (apartments):
- Al Reef: +5.4%
- Al Bandar: +2.9%
- Al Reem Island: +1.3%
- Saadiyat Island & Al Muneera: +1.2%
Average asking villa rents:
- 3-bed: Dh185,000
- 4-bed: Dh249,000
- 5-bed: Dh313,000
Top quarterly villa rent increases:
- MBZ City: +3.7%
- Al Reef: +1.2%
Citywide average villa rent stood at Dh249,000, while apartment rent averaged Dh117,000.
Yields, occupancy stay strong
- Gross rental yields: 8.1% overall
- Apartments: 8.5%
- Villas: 7%
- Occupancy rate: 88.1%
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Housing pipeline lags demand
Only 7.1% of Abu Dhabi’s 2025 pipeline was delivered in H1, with just 178 apartments and 712 villas completed so far. That leaves a backlog in demand.
However, 33,000 new units are expected by 2030, and several notable launches and completions are now underway:
- Wadeem by Modon (Hudayriyat): 1,700 villa plots
- Seamont Autograph Residences (Al Reem): 497 luxury units, Q4 2028
- Muheira by Modon (Al Reem): 475 freehold apartments
- Granada Phase 2 by Bloom (Zayed City): low-rise Mediterranean units, Q1 2028
- Palm Hills Development & Wave Seven: 1.87 million sq m project near Saadiyat
Off-plan sales boom, ready homes catch up
Off-plan activity remained strong:
- Volume up 53.1% QoQ (but down 51.8% YoY due to fewer launches)
- Average off-plan price: Dh19,171 per sq m (+38.1% YoY)
- Average ticket size: Dh3 million (+55.1% YoY)
Ready home market surged:
- Transaction volume up 45.5% QoQ and 51% YoY
- Average ready home price: Dh12,701 per sq m (+6.4% YoY)
- Average ticket size: Dh2.4 million
Mortgages vs. cash sales
In Q2 2025:
- Mortgage transactions: 2,878
- Value: Dh8.3 billion
- Cash transactions: 1,821
- Value: Dh8.2 billion
Outlook: Market tight, more options coming
With new supply trickling in and strong rental growth, Abu Dhabi residents may continue to face limited options in the short term—especially in sought-after areas. But a robust five-year development pipeline, improving off-plan activity, and steady price growth suggest a more balanced market could be taking shape.
Whether you’re renting, buying, or investing, staying ahead of the market’s pace—and knowing where new homes are coming—could make all the difference.
