Abu Dhabi’s property market is witnessing a surge in demand for villas due to a shortage of apartments and growing interest from high-net-worth individuals. According to Knight Frank, villa prices have surged 35% over five years, with Al Saadiyat Island and Yas Island leading growth. Meanwhile, 33,000 new units are under construction, but supply struggles to keep up with demand.
Quick Summary
-
Villa prices up 42.3% since Q1 2020, reaching Dh1,103/sq ft in Q2 2025.
-
Yas Island dominates new supply, with 8,000+ units planned.
-
63% of wealthy buyers seek Abu Dhabi properties for personal use, not investment.
-
Total transactions in H1 2025: Dh9 billion (down 36% YoY due to low supply).
Why Villas Are in High Demand
Limited Supply, High Demand
-
Villas make up only 37.4% of Abu Dhabi’s housing supply, creating a supply-demand imbalance.
-
Faisal Durrani (Knight Frank): “Prices will likely continue outperforming apartments simply because there aren’t enough villas.”
-
Al Saadiyat Island villas saw 28% YoY price growth, while Yas Island villas rose 22%.
Better Value Than Dubai
-
Abu Dhabi’s villa prices average Dh1,100/sq ft—half of Dubai’s rates, making it attractive for families and investors.
-
Shehzad Jamal (Knight Frank): “For buyers priced out of Dubai, Abu Dhabi offers better value and a family-friendly lifestyle.”
Strong Investor & End-User Interest
-
63% of global high-net-worth buyers purchase for primary residence, holiday homes, or retirement.
-
Only 37% are investment-driven.
Abu Dhabi’s Future Property Supply
-
33,074 units under construction, set for delivery by 2029 (62% apartments, 38% villas).
-
Yas Island leads with 8,000+ new homes, followed by Al Shamkha (3,000 units).
-
Saadiyat Island will see luxury branded residences (Mandarin Oriental, Nobu).
Market Outlook
-
Will McKintosh (Knight Frank): *“Strong uptake expected for new units, with 7% of buyers interested in off-plan homes.”*
-
Average residential prices grew 17% YoY, signaling sustained demand.
FAQs
Q. Why are villas more expensive than apartments?
Ans: Limited supply and high demand from families and wealthy buyers drive villa prices up.
Q. Which areas have the highest villa price growth?
Ans: Al Saadiyat Island (+28% YoY)
Yas Island (+22% YoY)
Q. Is Abu Dhabi a better investment than Dubai?
Ans: With lower prices per sq ft and strong rental yields, Abu Dhabi is becoming a viable alternative for investors and end-users.
Conclusion
Abu Dhabi’s property market is undergoing a notable shift, with soaring demand for villas driven by an ongoing apartment shortage and changing lifestyle preferences. The 42% rise in villa prices since 2020 reflects a strong appetite for larger, family-friendly homes amid limited supply.
As both rental and purchase trends favor villas, this momentum is likely to continue, positioning the segment as a key driver of Abu Dhabi’s real estate growth in the coming years.
