RIYADH: Abu Dhabi’s residential property market continued to post robust price growth through June, led by waterfront communities, while the office sector recorded its first annual decline in leasing activity in years, new data showed.
Apartment prices on Yas Island and Al Reem Island each rose about 18 percent year on year through June, according to Knight Frank’s latest Abu Dhabi Residential and Office Market Review.
Al Saadiyat Island retained its position as Abu Dhabi’s most expensive apartment market, with average transaction prices of around 43,100 UAE dirhams ($11,735) per sq. meter, up 21 percent from a year earlier.
The report comes as Gulf housing markets continue to see gains, with UAE home prices rising about 9 percent year on year in the first quarter and Saudi Arabia’s real estate price index increasing 1.3 percent in the second quarter, driven by a 2.6 percent rise in residential values. Qatar’s property price index climbed 8.7 percent year on year to a record 244.56 points in May, supported by strong transaction activity and mortgage lending.
Knight Frank’s Head of Research for Middle East and North Africa Faisal Durrani, said: “Despite the geopolitical challenges posed by the ongoing regional conflict, Abu Dhabi’s residential market continues to be supported by robust domestic demand, with prime waterfront communities such as Al Saadiyat and Yas Island leading the emirate’s price growth ... prices on average 10 percent lower than Dubai.”
Villas were more mixed. Al Jubail Island led with 40 percent annual growth, while Al Reem Island villas fell 22 percent. Al Saadiyat stayed the top villa location, at about 26,500 dirhams per sq. Meter.
Abu Dhabi has around 36,900 residential units under construction between 2026 and 2030, with apartments making up 66 percent of the pipeline. Yas Island leads with roughly 7,700 units, ahead of Fahid Island and Saadiyat Island.
Office market cools
Leasing activity in the office market hit about 53,200 transactions in 2025, up 11 percent from 2024, but transactions in the first half of 2026 fell around 13 percent year on year to roughly 23,616, marking the first annual contraction of the current cycle.
Al Reem Island bucked the trend, recording an increase of more than 148 percent, while Musaffah and Al Danah, the busiest districts, saw declines of 12 percent and 20 percent, respectively.
Around 428,000 sq. meters of new office space is due to be delivered between 2026 and 2028, which Knight Frank said could put upward pressure on vacancy rates given softening demand.
“The outlook for Abu Dhabi’s office market is firmly positive. Occupancy stands at around 98 percent with rental rates up year on year, and with only around 166,000 sq. meters of new supply due in 2026, Grade A space will remain scarce,” said James Hodgets, partner in occupier strategy and solutions for the Middle East and Africa region.
