Abu Dhabi property market shifts towards luxury and off-plan homes as sales volumes decline

Abu Dhabi property market trends in the third quarter of 2026 point towards a growing preference for luxury residences and off-plan developments, as buyers increasingly prioritise location, construction quality and long-term investment potential. Despite a decline in overall residential transaction volumes, the market recorded higher sales values, reflecting a shift towards more expensive properties, according to Savills Middle East.

The emirate recorded 6,085 residential transactions worth Dh21.5 billion during the third quarter of 2026. Transaction volumes declined by 19 per cent quarter-on-quarter and 7 per cent year-on-year. However, the total value of residential sales increased by 32 per cent compared with the same period in 2025.

The contrasting performance indicates that Abu Dhabi’s property market is experiencing a change in purchasing patterns, with fewer transactions generating higher overall sales values. Demand is increasingly concentrated in premium developments, particularly in the luxury and off-plan segments.

According to Rachael Kennerley, Director of Research at Savills Middle East, buyers are demonstrating a stronger preference for higher-value purchases, particularly in newly launched and luxury residential projects.

She noted that buyers are becoming more selective about property location, quality and long-term value. Abu Dhabi’s expanding lifestyle offerings, infrastructure investments and growing international profile continue to attract both domestic and overseas investors.

Luxury Property Transactions More Than Double

Luxury residential properties remained a significant driver of Abu Dhabi’s housing market during the third quarter. The emirate recorded 582 transactions involving properties valued at more than Dh10 million.

These transactions increased by 104 per cent year-on-year and 35 per cent compared with the previous quarter, demonstrating the strength of demand at the premium end of the residential market.

Off-plan properties accounted for 95 per cent of these high-value transactions, underlining the importance of newly developed luxury residences in attracting investors.

The growth in luxury transactions suggests that affluent buyers continue to view Abu Dhabi as an attractive destination for residential investment. Premium properties may appeal to purchasers seeking high-quality living environments, access to lifestyle amenities and potential long-term capital appreciation.

The increase also highlights the changing composition of residential demand. While the broader market recorded fewer transactions, luxury properties continued to attract substantial interest, supporting the overall value of property sales.

Savills said Abu Dhabi’s residential market remained resilient despite transaction volumes moderating from the levels recorded earlier in the year.

Off-Plan Properties Dominate Residential Sales

Off-plan developments continued to dominate Abu Dhabi’s residential property market in the third quarter of 2026, accounting for 81 per cent of all residential transactions.

The average value of an off-plan transaction reached Dh5 million, marking a 15 per cent increase compared with the previous quarter and a 40 per cent rise year-on-year.

In comparison, the average transaction value for ready properties stood at Dh2.8 million. The difference highlights the growing importance of new developments in shaping the market’s overall value and investment profile.

Off-plan properties allow buyers to purchase homes before construction is completed. Depending on the project, developers may offer staged payment plans and a choice of units within newly planned residential communities. These features can attract investors seeking exposure to emerging neighbourhoods and future residential demand.

However, purchasing an off-plan property also involves risks, including construction delays, changes in market conditions, developer-related risks and uncertainty about the property’s eventual resale value. Investors therefore need to evaluate project delivery records, payment terms, location and expected supply before making a decision.

The strong performance of off-plan properties suggests that buyers are increasingly focusing on new residential projects rather than limiting their choices to completed homes.

Residential Property Prices Continue to Increase

Abu Dhabi’s residential property prices remained firm during the third quarter, despite the decline in overall transaction volumes.

Average apartment prices reached Dh22,700 per square metre, representing a 9 per cent increase year-on-year. Meanwhile, villa and townhouse prices averaged Dh18,200 per square metre, up 8 per cent compared with the same period in 2025.

The continued appreciation in both segments indicates that price growth has persisted even as transaction activity has moderated.

The rise in average transaction values and residential prices reflects the combined influence of premium property demand, the composition of sales and buyers’ preferences for particular locations and development standards.

Nevertheless, average prices do not necessarily indicate that every neighbourhood or property category is experiencing the same rate of growth. Performance can vary according to location, building quality, amenities, completion status and the balance between supply and demand.

As a result, prospective buyers and investors are increasingly required to assess individual developments and neighbourhoods rather than relying exclusively on emirate-wide market averages.

International Buyers Strengthen Market Demand

Foreign investment continued to play an important role in Abu Dhabi’s residential property market.

According to Savills Middle East, foreign buyers, including resident expatriates and non-resident investors, accounted for 70 per cent of residential sales value during the first half of 2026. This compared with 64 per cent during the corresponding period in 2024.

The increase highlights the growing contribution of international purchasers to the emirate’s housing market.

Abu Dhabi has continued to develop its residential, cultural, tourism and leisure offerings, while infrastructure investment and economic diversification have strengthened its appeal to international residents and investors.

The emirate’s expanding global profile may also encourage demand from buyers seeking residential assets in established or emerging investment destinations. However, foreign investment patterns can be influenced by financing conditions, global economic developments, property prices and investor confidence.

The 70 per cent figure relates to the value of residential sales, rather than the number of transactions, and covers the first half of 2026. It should therefore be distinguished from the third-quarter transaction figures reported separately by Savills.

Rental Market Records Higher Transaction Activity

Abu Dhabi’s rental market also recorded increased activity during the third quarter of 2026.

The emirate registered 50,500 rental transactions, representing a 29 per cent increase compared with the second quarter.

Lease renewals accounted for 68 per cent of rental activity, indicating that existing tenants contributed significantly to the increase. The high proportion of renewals suggests that tenant retention and continued occupancy remain important features of the residential rental market.

However, rental rates for new leases recorded mixed performance across different residential communities. This indicates that rental market conditions are increasingly dependent on location and local supply-demand dynamics.

Areas with strong employment access, transport connections, lifestyle amenities and established residential infrastructure may experience different rental trends from communities where additional supply is becoming available.

For landlords and investors, the figures underline the importance of evaluating rental demand and achievable returns at the community level. For tenants, differences between locations may create varying levels of affordability and choice.

Approximately 68,000 New Homes Expected by 2030

The future supply pipeline is expected to become an important factor influencing Abu Dhabi’s residential property market.

Approximately 68,000 additional residential units are expected to enter the market by 2030, according to the Savills report. Planned supply will be concentrated in major residential destinations, including Saadiyat Island, Al Reem Island, Yas Island and Zayed City.

The addition of new homes could expand housing choices for residents and investors while increasing competition among developers and property owners.

The impact will depend on the pace of project completion, the types of properties delivered, their price points and the strength of demand when they enter the market.

Premium developments in locations with established lifestyle amenities and infrastructure may continue to attract buyers. At the same time, a substantial increase in available units could place greater pressure on developments that offer less differentiation in terms of location, design, facilities or pricing.

The expected supply pipeline therefore makes project quality, delivery schedules and neighbourhood-level demand important considerations for both developers and purchasers.

Market Outlook: Premium Demand and Supply Will Shape Growth

Savills expects Abu Dhabi’s residential market to remain supported by the emirate’s economic fundamentals, continued infrastructure investment and interest in premium residential developments.

The third-quarter figures indicate that the market is becoming more selective, with luxury and off-plan properties attracting a significant share of investment despite lower overall transaction volumes.

The increase in total sales value, rising average property prices and strong participation by international buyers point towards continued interest in Abu Dhabi’s residential sector. However, these indicators do not eliminate the possibility of uneven performance across different property segments.

The expected delivery of approximately 68,000 residential units by 2030 will be an important factor in determining future market conditions. If supply expands faster than demand in particular locations, developers and landlords may face greater competition. Conversely, well-positioned developments that match buyers’ preferences could continue to attract interest.

For investors, the changing market environment reinforces the need to examine property valuations, developer credibility, completion timelines, rental prospects and long-term demand before committing capital.

Overall, Abu Dhabi’s residential property market is showing a shift towards higher-value transactions, with luxury homes and off-plan developments playing an increasingly prominent role. While the decline in sales volumes signals a moderation in transaction activity, higher sales values and rising residential prices demonstrate that demand remains concentrated in selected segments of the market. The balance between premium demand, international investment and upcoming housing supply will help determine the emirate’s property market performance in the coming years.