Abu Dhabi real estate market shows growth: deals in nine months exceeded 171 billion dirhams

According to the latest market report from Bayut, in the third quarter of 2026, apartment prices in some affordable and mid-range communities in Abu Dhabi increased by up to 9.2 percent. This growth occurred against a backdrop of sustained demand for more budget-friendly housing, as well as continued interest in luxury real estate.

Baniyas recorded the largest quarterly increase, where the average price per square foot for mid-level apartments rose by 9.2 percent. Al Ghadir community saw a growth of 6.2 percent, while on Al Maryah Island, apartment prices increased by 3.2 percent. Other areas, including Masdar City and Al Shamkha, also demonstrated moderate price increases.

At a media briefing, Matt Gregory, Senior Director of Strategy at Dubizzle Group, noted that Abu Dhabi continues to show positive momentum in housing prices across various segments. For the third quarter, Bayut registered about 2.5 million visits to the platform related to the Abu Dhabi real estate market, with the average number of active listings reaching approximately 20,000.

These figures reflect a constant interest in searching both in established communities and in new residential complexes. Saadiyat Island, Marina, and Marina Villa were among the popular places for searching ultra-luxury apartments. The luxury apartment segment attracted attention in Al Raha Beach, Yas Island, and Al Maryah Island.

For mid-range apartments, Al Reem Island was the most active search area, followed by Masdar City and Baniyas. Among buyers looking for affordable housing, Al Ghadir, Al Reef, and Al Shamkha remained popular. Ultra-luxury buyer interest in villas was shown by Saadiyat, Nuraiy, and Marina Islands.

In the luxury villa segment, Yas Island, Al Raha Beach, and Al Batin were preferred. The mid-range segment is represented by Al Raha Gardens, Zayed City, and Al Samkha, while for affordable villas, Al Shamkha, Al Reef, and Al Ghadir were popular.

Bayut's analysis identified Al Dafra as the leading location for estimated villa rental yield, showing a Return on Investment (ROI) of 11.5 percent in the mid-segment. Between Two Bridges, also known as Bayn Al Djesrain, an estimated yield of 10.1 percent was recorded for affordable villas. Among apartments, Al Reef offered an estimated yield of 7.9 percent in the affordable segment, and Al Samkha offered 7.1 percent for mid-range apartments.

On Al Maryah Island, an estimated yield of 7 percent was recorded for luxury apartments, and Marina offered 5 percent for ultra-luxury apartments. Regarding luxury villas, Al Raha Beach showed an estimated yield of 5.2 percent, and Saadiyat Island showed 4.3 percent in the ultra-luxury class. It should be noted that these figures represent estimated rental yields based on listed property prices, not guaranteed income.

According to Bayut, the listed rent in popular Abu Dhabi communities remained generally stable or showed only minor changes during the third quarter. Saadiyat Island and Al Raha Beach continued to be in demand among tenants seeking elite and luxury apartments. Al Reem Island attracted mid-range apartment tenants, while Khalifa City remained the leading spot for affordable rentals.

For villas, Saadiyat Island and Yas Island remained sought after in premium segments, while Zayed City and Khalifa City attracted mid-range and affordable tenants. Haider Ali Khan, CEO of Bayut, stated that Abu Dhabi is becoming increasingly competitive in the global real estate market, especially in the ultra-luxury housing and branded residences segment. He added that the range of properties under construction offers buyers greater choice and attracts international wealthy individuals and institutional investors.

The report is based on listed prices and search activity on Bayut, not on completed real estate transactions. The market for properties under construction in Abu Dhabi continued to attract interest in various price categories. Among popular ultra-luxury apartment projects was Saadiyat Cultural District, and on Yas Island, the Gardenia Bay project attracted seekers of luxury apartments. Shams Abu Dhabi on Al Reem Island was in the mid-range category, while the Al Reeman 1 and Reeman Garden 1 projects attracted interest in the affordable segment. Saadiyat Lagoons and Yas Park Gate remained popular for villas in the ultra-luxury and luxury classes. Bloom Living in Zayed City attracted mid-range buyers, and Al Reeman 2 in Al Shamkha was featured among affordable villa projects.

The real estate market in Dubai South has demonstrated record figures in the first eight months of 2026. According to a recent micro-market report by the consulting company ANAROCK Research, 12,428 residential property deals were concluded from January to August 2026. This figure is 27% higher than the 9,788 deals registered in 2025, meaning that the sales volume for the first eight months of 2026 already exceeds the entire sales volume of the previous year.

There is also an acceleration in the total sales volume. For the period from January to August 2026, the total value of residential property reached 15.9 billion dirhams. This amount accounts for about 81% of the total annual sales volume of 19.6 billion dirhams recorded in 2025. If the sales pace continues through December, the total sales volume for 2026 could reach approximately 23.9 billion dirhams; however, it should be noted that this is only a forecast based on current dynamics and not an official ANAROCK projection.

When compared with long-term data, the annual sales volume of residential property in Dubai South in 2020 was only 0.72 billion dirhams. By 2025, this figure grew to 19.6 billion dirhams, representing an increase in sales volume of approximately 27 times over five years. Concurrently, the number of annual transactions increased from 672 to 9,788.

The report also identified significant changes in housing buyer preferences. In Dubai South, the share of smaller and more affordable apartments is growing. From January to August 2026, the share of studio apartments in the total volume of residential deals reached 45%, compared to 19.5% in 2025. The share of 1-BHK apartments was 31%. Thus, studios and 1-BHK apartments together account for about 76% of all deals, and the share of apartments in the total residential sales volume reached 94.5%, indicating a preference among buyers for smaller units in this area.

The average price per square foot in Dubai South has also increased. According to ANAROCK, in January-August 2026, the average price was 1,656 dirhams per square foot, whereas in 2020 it was 650 dirhams, representing an approximate increase in the average price by two and a half times during this period. Despite this increase, the average amount spent on purchasing one property has decreased. In 2023, the average deal size peaked at 2.57 million dirhams, but in January-August 2026, it fell to 1.28 million dirhams. ANAROCK explains this by the increase in small object sales, as the rising share of studios and 1-BHK apartments led to a decrease in the average purchase cost per property, which does not imply a drop in prices across the entire market.

According to a report by the consulting company Anarock, housing sales in Dubai South in the first eight months of 2026 exceeded any previous year's figures, reaching 12,428 transactions. This represents a 27% increase compared to the 9,788 transactions registered throughout 2025. The growth is attributed to buyers increasingly preferring more compact living spaces.

Dubai South is a planned urban and economic district spanning 145 square kilometers, located in the southernmost corridor of Dubai, UAE. Development is centered around Al Maktoum International Airport and is divided into six zones: residential, logistics, aviation, exhibition, gold, and business.

Sales Trend Analysis

Ayush Puri, Head of Residential Real Estate, Middle East, and Co-founder of Anarock Channel Partners, noted that Dubai South has already surpassed its annual housing sales volume for 2025 in just eight months. He emphasized that the key shift is in the type of property being acquired: studios and one-bedroom apartments now account for about three-quarters of all deals. Budget-friendly apartments have become the main driver of activity, expanding the area's appeal beyond larger homes that fueled its earlier growth.

In terms of value, residential transactions in the region during the first eight months of 2026 amounted to AED 15.9 billion (or INR 41,117 crore), which is equivalent to 81% of the total volume from the previous year of AED 19.6 billion (or INR 50,686 crore).

Over the past few years, the region has shown multiplefold growth: the annual value of residential sales increased from AED 0.72 billion (or INR 1,862 crore) in 2020 to AED 19.6 billion in 2025, representing a 27-fold increase. During the same period, the number of transactions grew from 672 to 9,788.

The report revealed a sharp shift towards smaller apartments: studios accounted for 45% of transactions in January-August 2026, more than double their share of 19.5% in 2025. One-bedroom apartments added another 31%, bringing the combined share to approximately 76%. Overall, apartments made up 94.5% of the residential sales volume, compared to 31% in 2020.

The average housing price in January-August 2026 was AED 1,656 (or INR 42,836) per square foot, whereas in 2020 it was AED 650 (or INR 16,809). However, the average deal size decreased to AED 1.28 million (or INR 3.31 crore) compared to the peak of AED 2.57 million (or INR 6.65 crore) in 2023.

The consulting firm explained this decrease as a change in the structure of offered products and increased demand for more affordable and smaller units, rather than a broad correction in real estate prices. Puri clarified that a lower average purchase size does not necessarily mean a lower price per square foot, as the central point is the change in product assortment. He also added that a lower average deal size should not be mistaken for a market price correction, noting that the market is in a 'launch and absorption' phase, and the ready and secondary housing segments are not yet mature.

The report showed that the share of off-plan sales in residential transactions in January-August 2026 was 94%, higher than the 73% recorded in 2020.

Infrastructure Support and Rental Market

Demand is supported by infrastructure development. The master plan for Dubai South anticipates accommodating around one million residents and 500,000 jobs upon full completion. In April 2024, an expansion of Al Maktoum International Airport was approved at AED 128 billion, with the first operational phase scheduled for 2032. The airport is expected to handle 260 million passengers and 12 million tons of cargo annually.

The rental market in the area has also expanded: the average annual rent rose from AED 34,534 (or INR 8.93 lakh) in 2020 to AED 82,063 (or INR 21.22 lakh) in January-August 2026. The volume of rental transactions increased fourfold compared to 2020 levels.

Land sale data also indicates the stability of the launch pipeline. The value of commercial deals increased from AED 0.06 billion (or INR 155 crore) in 2020 to AED 5.46 billion (or INR 14,120 crore) in 2025, with land accounting for 97% of the total volume in 2025. In the first eight months of 2026, developers acquired an additional AED 2 billion (or INR 5,172 crore) in land.

Looking ahead, the report points to 38,116 units planned for delivery between 2027 and 2029, more than 3.5 times the 10,813 units delivered from 2016 to 2026. The peak delivery is expected in 2028 with 16,094 units. Although the region remains an attractive investment destination, Puri warned that the 'concentrated delivery period will test the market's absorption capacity, requiring sustained demand to meet supply.'

At the current sales pace for January-August, the report forecasts an annual figure for 2026 of approximately AED 23.9 billion (or INR 61,805 crore).