Abu Dhabi’s residential property market is witnessing a shift towards higher value purchases, luxury and off-plan homes, as buyers become more selective about location, quality and long-term investment potential, according to report by Savills Middle East.
The trend comes despite a slowdown in overall property transactions during the third quarter of 2026, suggesting that demand is increasingly concentrated in premium residential developments rather than being spread evenly across the market.
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“What we’re seeing is a shift towards higher-value purchases, particularly in the off-plan and luxury segments, where demand remains strong,” said Rachael Kennerley, Director of Research at Savills Middle East.
She added that buyers are becoming increasingly selective, placing greater emphasis on location, quality and long-term value, while Abu Dhabi’s expanding lifestyle offering, infrastructure investment and growing international profile continue to attract local and overseas buyers.
According to Savills’ Market in Minutes report, Abu Dhabi recorded 6,085 residential transactions worth Dh21.5 billion in Q3 2026.
While transaction volumes declined 19 per cent quarter-on-quarter and 7 per cent year-on-year, total sales value increased 32 per cent compared with the same period last year.
The contrasting figures highlight a changing market dynamic, with higher-value purchases supporting overall sales value even as fewer transactions take place.
Luxury homes drive market activity
The luxury residential properties remained particularly strong during the quarter, with 582 transactions exceeding Dh10 million.
This represented a 104 per cent increase year-on-year and a 35 per cent rise compared with the previous quarter.
Off-plan properties accounted for 95 per cent of these high-value transactions, highlighting the growing importance of new luxury developments in Abu Dhabi’s residential market.
Kennerley said the emirate’s property market continues to demonstrate resilience despite moderating transaction volumes.
“Abu Dhabi’s residential market continues to demonstrate resilience, even as transaction volumes moderate from the levels recorded earlier this year,” she said.
Buyers favour off-plan developments
Off-plan properties dominated Abu Dhabi’s residential market during the third quarter, accounting for 81 per cent of total transactions.
The average value of an off-plan transaction reached Dh5 million, representing a 15 per cent increase quarter-on-quarter and a 40 per cent rise year-on-year.
By comparison, the average transaction value for ready properties stood at Dh2.8 million.
The figures indicate that off-plan developments are playing a central role in the market’s shift towards higher-value transactions.
Property prices continue to rise
Despite the decline in overall transaction volumes, residential prices remained resilient during the quarter.
Average apartment prices reached Dh22,700 per square metre, increasing 9 per cent year-on-year.
Meanwhile, villa and townhouse prices averaged Dh18,200 per square metre, representing an annual increase of 8 per cent.
The continued rise in prices, alongside stronger activity in the luxury segment, reflects the market’s focus on premium residential properties.
Foreign investment supports demand
International buyers continued to play an important role in Abu Dhabi’s property market.
According to Savills, foreign buyers, including resident expatriates and non-resident investors, accounted for 70 per cent of residential sales value during the first half of 2026, compared with 64 per cent in the corresponding period of 2024.
The figures highlight the growing contribution of foreign buyers to the emirate’s residential market.
Savills said Abu Dhabi’s expanding lifestyle offering, infrastructure investment and growing international profile continue to support interest from local and overseas purchasers.
Rental market sees stronger activity
Abu Dhabi’s rental market recorded 50,500 transactions in the third quarter, up 29 per cent compared with Q2 2026.
Lease renewals accounted for 68 per cent of rental activity, suggesting that existing tenants were responsible for much of the increase.
However, rental rates for new leases showed mixed performance across residential communities, reflecting increasingly location-specific market conditions.
New supply could shape market competition
Looking ahead, approximately 68,000 additional residential units are expected to enter Abu Dhabi’s property market by 2030.
The new supply will be concentrated in major residential locations, including Saadiyat Island, Al Reem Island, Yas Island and Zayed City.
Savills expects demand to remain supported by the emirate’s economic fundamentals, continued infrastructure investment and interest in premium residential developments.
However, the growing supply pipeline is expected to remain an important factor in shaping market performance, particularly as buyers become increasingly selective about property quality, location and long-term value.
Source: Khaleej Times