Abu Dhabi’s freehold residential market continued to appreciate in Q2 2026, though the rate of growth slowed, according to ValuStrat’s Price Index published this week.
The VPI rose to 151.1 points, up 2.1% quarter-on-quarter and 17.8% year-on-year, using Q1 2021 as the base of 100. The quarterly increase was the smallest recorded in two years.
Apartments led the market. The apartment VPI climbed 2.9% over the quarter and 24.1% annually, outpacing villas, which rose 1.3% quarterly and 12% year-on-year.
Among apartment communities, Al Reef posted the strongest annual capital growth at 41.6%, followed by Al Muneera Island at 24.7%, Al Reem Island at 22%, Al Bandar at 21.8% and Saadiyat Island at 18.3%. In the villa segment, Al Reef again led with 27.9% annual appreciation, ahead of Saadiyat Island at 12% and Al Raha at 4.6%.
ValuStrat’s data positions Abu Dhabi at an earlier stage in its property cycle than Dubai, with relatively affordable price points continuing to support end-user demand despite regional geopolitical pressures.
Off-plan activity drove the transactions picture. Some 6,061 off-plan properties sold in Q2, representing 84% of total sales volumes and growth of 156% year-on-year.
Average off-plan prices stood at AED 22,647 per sq m, down 4% on the quarter but up 21.2% annually. The average off-plan ticket size fell 15.7% quarter-on-quarter to AED 4.4 million, rising 25.9% year-on-year. Ready property volumes moved in the opposite direction, falling 28.3% annually and 19% quarterly. Ready home prices averaged AED 15,522 per sq m, up 10.9% annually.
Rental values held steady in the quarter. The rental VPI reached 128.6 points, flat quarter-on-quarter and up 4.7% annually. Apartment rents rose 5% year-on-year while villa rents gained 4.4%.
Studio apartments recorded the strongest annual rental growth at 13.8%. Average annual residential asking rents stood at AED 163,700 across the city. Apartment asking rents in Abu Dhabi City averaged AED 122,500 per year, while villa asking rents averaged AED 260,000. As of 2 June 2026, Abu Dhabi introduced a temporary 0% rent increase cap, replacing the previous 5% annual limit on residential, commercial and industrial properties.
New project launches were among the quarter’s defining stories. Sobha Realty entered Abu Dhabi with Sobha City, a AED 40 billion mixed-use development in Al Bahia spanning 38 million sq ft, comprising 4,000 apartments, 2,500 villas and 80 mansions, with the first phase expected by Q4 2029.
Aldar launched Yas Point, a AED 6 billion waterfront scheme on Yas Island with 1,600 branded residences, a five-star resort, and retail and leisure space across 600,000 sq m. Object 1 announced its first Abu Dhabi project, the 171-unit A1LA Residence on Al Reem Island, due Q4 2028.
On the commercial side, Mubadala and Aldar announced a AED 60 billion expansion of Al Maryah Island, expected to add over 1.5 million sq m of mixed-use gross floor area and expand ADGM’s commercial footprint. Office asking rents in primary districts grew 11.4% quarterly and 27.3% annually, with average occupancy in central business districts at 90%.
The industrial and logistics sector remained tight. KEZAD reported occupancy of approximately 98%. Asking rents showed widening divergence: lower-end rents fell 10.7% annually while upper-end, Grade A facilities recorded growth of 6.4%.
The macro backdrop is mixed. The Central Bank of the UAE expects GDP growth to moderate to 1.7% in 2026 before rebounding to 9.8% in 2027. The US Federal Reserve held rates at a target range of 3.5% to 3.75% as of June 2026. Moody’s affirmed the UAE’s Aa2 sovereign rating with a stable outlook.
