Residential sales prices and rents eased slightly on a quarterly basis after a prolonged run of gains, while the office market continued to tighten, with occupancy near capacity and rents rising sharply.
Key findings include:
New residential launches nearly doubled YoY, from 7,019 units across 29 projects in H1 2025 to 13,073 units across 43 projects in H1 2026
Off-plan sales volumes reached roughly five times secondary market levels, with the gap widening since mid-2025
City-wide average residential sales prices reached AED 16,368 per sqm in Q2 2026, up 22% YoY but down 1% QoQ, the first quarterly dip since late 2021
Average residential rents reached AED 945 per sqm per year in Q2 2026, up 4% YoY but down 5% QoQ
Office rents rose 15% QoQ and 32% YoY to AED 2,182 per sqm per year, with Prime and Grade A occupancy at around 99% and city-wide office occupancy at 93%. Abu Dhabi's residential market is transitioning from a period of exceptional growth to one of greater differentiation. Government-backed developers such as Aldar and Modon have led the launch activity, increasingly targeting mid-market and end-user demand. Off-plan sales continue to lead transaction volumes by a wide margin, while sales prices and rents have both eased modestly on a quarterly basis, a shift the report characterises as a natural rebalancing rather than a correction. The office market tells a different story, with constrained supply keeping occupancy near full capacity and rents climbing at a pace that puts Abu Dhabi among the strongest-performing office markets in the region.
Prathyusha Gurrapu, Head of Research at Cushman & Wakefield Core, said:
Abu Dhabi's growth has largely leaned on its government-backed developers, and rather than pulling back amid regional uncertainty, they repositioned toward end-user demand and mid-prime product. That resilience is now showing up as differentiation rather than uniform growth, with sales prices and rents easing modestly even as launch volumes and off-plan activity remain strong. The office market, by contrast, remains defined by scarcity, and that undersupply is likely to persist for some time yet.
Residential Market
Are Developers Aligning Launches with End-User Demand?
New launch volumes nearly doubled YoY in H1 2026, to 13,073 units across 43 projects, up from 7,019 units across 29 projects in H1 2025. Modon led with Hudayriyat Golf Estates and Tara Park, followed by Aldar with Yas Park Place and Al Ghadeer Gardens, alongside more than 20 other developers including Sobha Realty, Imkan Properties and ORA. Launches are increasingly mid-market rather than the luxury and branded product that dominated before the regional conflict in early Q1 2026, reflecting a shift toward resident expatriates and buyers relocating from Dubai.
Is Off-Plan Still Leading the Market?
Off-plan sales ran at roughly five times secondary market volumes in H1 2026, a gap that has widened since mid-2025. City-wide average sales prices reached AED 16,368 per sqm in Q2 2026, up 22% YoY, with apartments at nearly AED 17,679 per sqm and villas at AED 12,619 per sqm. Prices eased 1% QoQ, the first pause since late 2021. Growth held across most districts, led by Al Reef Downtown apartments (+40% YoY), ahead of prime addresses such as Yas Island and Saadiyat Island, which continue to grow off a higher base. Resilient transaction volumes point to a natural cooling rather than a correction.
Are Rents Beginning to Cool?
Average residential rents reached AED 945 per sqm per year in Q2 2026, up 4% YoY but down 5% QoQ, as affordability and tenant resistance begin to bite. Saadiyat Island (+18%) and Al Raha Beach (+13%) led apartment growth, while villas were mixed, up 17-23% in Saadiyat and Yas Island against a 10% decline in Al Raha Gardens. ADREC's 0% cap on rental increases, effective 2 June 2026, now blocks rent rises on renewal across most of the market, though ADGM, Al Reem Island and new completions remain exempt, creating a two-speed market.
Office Market
David Short, Head of Abu Dhabi Commercial Sales & Leasing at Cushman & Wakefield Core, said:
Abu Dhabi's office market remains defined by scarcity. Prime and Grade A occupancy sitting around 99% tells you there is effectively no meaningful availability left at the top end, and with limited completions before 2028, that is not going to change quickly. It is notable how diversified demand has stayed despite regional uncertainty, with banking and finance, the public sector and business services all competing for the same limited pool of space. Occupiers are having to make decisions further in advance and increasingly look at Grade A alternatives outside the core clusters, and even well-positioned Grade B stock, simply to secure the space they need.
Why Does Undersupply Keep Defining the Market?
No new office space was completed in Q2 2026, following 48,000 sqm delivered in Q1, mostly at Masdar City Square. A further 47,000 sqm is expected by year-end, taking total 2026 deliveries to approximately 95,000 sqm. However, much of this space is already pre-leased, leaving limited new availability in the market and reinforcing the strength of occupier demand for Grade A stock amid tight supply. The pipeline remains thin through 2028, with only 35,000 sqm expected in 2027 and 82,000 sqm in 2028, before rising to around 174,000 sqm in 2029. City-wide office rents rose 15% QoQ and 32% YoY to AED 2,182 per sqm per year, with Prime and Grade A occupancy at around 99%. Prime rents in ADGM, which sits outside the rental cap, now exceed AED 6,000 per sqm, widening the pricing gap with Grade A and Grade B stock and prompting some occupiers to explore more cost-effective alternatives on Al Reem Island.
Where Is Demand Coming From?
Banking and finance led office enquiries in H1 2026 at 20%, driven by continued expansion within ADGM. Public sector, business services and oil and gas also remained key demand drivers, while technology and defence are gaining traction. Demand stayed concentrated in mid-sized 200-600 sqm units, with ADGM and Al Reem Island the preferred locations, reflecting their established financial and business ecosystems.
H2 2026 and Beyond: What to Watch For
Looking ahead, Abu Dhabi's residential market is expected to see further, measured softening in prices and rents as new supply gradually broadens buyer and tenant choice, though deliveries remain concentrated within major master-planned communities. The office market is expected to stay firmly in landlords' favour, with meaningful supply relief unlikely before 2028-2029.
Abu Dhabi's outlook remains underpinned by strong fundamentals, with government-backed developers keeping supply closely aligned with end-user demand and accessible price points. Robust foreign investment, sovereign wealth backing and a growing pipeline of infrastructure and destination projects should support the market through its next, more measured phase, even as residential price and rental growth moderates from recent highs.
