Market Overview: Shift Toward Ready Villas
In the first half of 2025, Abu Dhabi’s residential property market saw a significant moderation in overall sales, yet a surprising resurgence in demand for ready-to-move-in villas and townhouses. According to Cavendish Maxwell’s latest Abu Dhabi Residential Market Performance Report, total sales transactions across both ready and off-plan properties dropped by 37% in volume and 33% in value—down to AED 8.9 billion (USD 2.42 billion) from nearly AED 12.5 billion (USD 3.4 billion) in H1 2024
Ready Villas Experience a Massive Boost
Despite the overall slowdown, ready villas and townhouses soared in popularity—sales volumes in this category rose by 72% year-on-year, reaching the highest levels since 2021, with approximately 700 units sold during H1 2025.
This spike signals a strong investor and end-user preference for completed homes, which offer the advantage of immediate occupancy, predictable timelines, and tangible assets—especially appealing amid constrained new off-plan launches.
Price Appreciation Reflects Supply Constraints
The limited availability of new launches has encouraged price growth across residential segments:
- Apartments: +14% YoY
- Villas: +11.1% YoY
- Average transaction value for ready properties: AED 2.5 million (up from AED 2.1 million last year).
Mortgage activity also rose, with total mortgage lending reaching AED 3.5 billion (USD 950 million)—a 12% increase—and villas and townhouses alone contributing AED 2.5 billion.
Rentals Climb Steadily
Rental rates followed a similar upward trajectory:
- Year-on-year increase: 14%
- Increase since H2 2024: 6.7%.
Top-performing communities included Yas Island (rents up nearly 27%), Al Reem Island (+21%), and Al Reef (+16%). Villa rents averaged a 4.7% rise, with Al Reef up 9% and Yas Island seeing a slight dip of nearly 2%.
Supply Pipeline: Delivery Versus Demand
In H1 2025, 2,400 new residential units were completed, with another 10,400 slated for delivery by the end of the year—and over 11,000 projected in 2026. However, Cavendish Maxwell cautions that actual delivery may lag behind projections, keeping supply tight in the nearer term.
This gap between demand and supply, especially for ready homes, has driven investor activity and bolstered pricing.
Expert Viewpoint: Cavendish Maxwell’s Take
Andrew Laver, Associate Director at Cavendish Maxwell Abu Dhabi, asserts that despite a slowdown in overall sales volumes, the demand for completed properties remains remarkably robust. He anticipates that forthcoming off-plan launches, including large-scale projects from developers like Aldar and Modon, will reinvigorate the market in the second half of 2025.
What This Means for Stakeholders
- For Investors: Ready villas offer an attractive investment with strong capital appreciation and rising rental yields.
- For Developers: The demand skew toward ready units underscores an opportunity to accelerate project completions or strategically time off-plan launches to meet market needs.
- For Buyers and Renters: While supply remains tight, early engagement and competitive financing can secure value in a rising-price environment.
Summary Highlights
| Metric | H1 2024 vs. H1 2025 Change |
|---|---|
| Residential Sales Value & Volume | ↓ ~33% in value; ↓ ~37% in volume (AED 8.9b) |
| Ready Villas/Townhouses | ↑ 72% in sales volume; ~700 units sold |
| Apartment Prices | ↑ 14% YoY |
| Villa Prices | ↑ 11.1% YoY |
| Avg. Transaction Value (Ready) | ↑ from AED 2.1M to AED 2.5M |
| Mortgage Lending (Total) | ↑ 12% to AED 3.5b; Villa/Townhouse portion: AED 2.5b |
| Rental Rates | ↑ 14% YoY; ↑ 6.7% vs. H2 2024 |
| New Supply Delivered | 2,400 units (with 10,400 more expected by year-end); further 11,000 in 2026 forecast |
| Market Outlook | Sustained demand for ready homes; off-plan activity expected to increase later in 2025 |