(MENAFN- Khaleej Times)

Waterfront property in the UAE is riding an unprecedented wave of demand, with new analysis from international developer MERED revealing that Abu Dhabi's seaside districts have outpaced the wider market by a striking margin.

Between the fourth quarter of 2021 and the third quarter of 2025, off-plan projects across the capital posted a weighted average price increase of 47 per cent, supported by a 429 per cent jump in sales volume. Yet it is the emirate's prime waterfront zones that stand out, delivering a 69 per cent surge in values - more than triple the 22 per cent rise recorded in non-waterfront areas during the same period.

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According to MERED, the performance reflects a structural shift in buyer preference and the increasingly limited availability of coastal land.“Al Reem Island exemplifies this trend,” said Artemiy Marinin, project director at MERED.“Waterfront projects on the island recorded a 57 per cent increase in prices since late 2021, far exceeding the 20 per cent growth seen in non-waterfront areas. This performance not only reflects current market demand but also highlights considerable potential for future growth compared with other established luxury destinations.”

If Al Reem illustrates the depth of demand, Yas Island defines its peak. Waterfront projects there registered an 81 per cent price increase over the same period, setting the upper benchmark for Abu Dhabi's premium residential market. Analysts note that Al Reem's central location and ongoing transformation mean it still carries headroom for appreciation, especially as the island fills out with cultural, commercial and residential anchors.

The momentum has been strengthened by major design-led developments that emphasise exclusivity and architecture. MERED's latest project, Riviera Residences, occupies two prime plots totalling more than 23,400 square metres within the Abu Dhabi Global Market district. Conceived by Pritzker Prize-winning architects Herzog & de Meuron, the development comprises more than 400 apartments and 11 signature villas, including sky villas, ocean villas and a penthouse inspired by the capital's pearl-diving heritage. Every pre-launch unit sold out immediately - an outcome that industry observers say underscores the depth of demand for waterfront homes with pedigree design and strong lifestyle credentials.

The trend is just as pronounced in Dubai, where waterfront real estate remains the most competitive and supply-constrained segment of the market. Some districts have posted annual price rises of up to 24 per cent, with Jumeirah Bay Island reaching an average of Dh4,122 per square foot in early 2025. Villas along the water saw year-on-year gains of more than 20 per cent, while homes with direct waterfront access now often command premiums of 20 to 40 per cent. Sea-facing apartments typically achieve a 15 to 25 per cent uplift compared with similar units without a view.

Here too, scarcity plays a defining role. Dubai's collection of true waterfront neighbourhoods - chief among them Palm Jumeirah, Jumeirah Bay Island, Dubai Marina and parts of Dubai Creek - has effectively reached maturity, and future development opportunities are limited. A recent record-setting sale on Palm Jumeirah, with one of the highest price-per-square-foot values in the city's history, reaffirmed the segment's enduring appeal and the lengths buyers are willing to go to secure prime coastline.

Even as some analysts forecast a modest market-wide correction from 2026 due to the volume of new housing in the pipeline, most expect the waterfront category to remain the country's most resilient. With a depth of international demand, tight supply and strong rental performance, Dubai's coastal districts are projected to post further price gains. Market forecasts suggest that premium waterfront values could climb an additional 15 per cent by 2027, driven by what many describe as an irreplaceability factor: no new supply can replicate the location, amenity mix or prestige of these neighbourhoods.

Marinin attributes the segment's strength to simple economics.“The superior performance of waterfront properties is underpinned by a straightforward principle: limited supply meets consistent demand. Waterfront land is finite, and the appeal of a premium lifestyle ensures these properties remain highly sought-after. This scarcity, coupled with strong buyer interest, continues to translate into stable and profitable investments, offering superior rental yields, capital appreciation and liquidity.”

Together, the data from Abu Dhabi and Dubai point to a maturing but still accelerating segment - one where design investment, branded developments, lifestyle infrastructure and global visibility increasingly shape value. For investors, the UAE's waterfront real estate continues to stand out as one of the most reliable long-term growth plays in the region, with the latest analysis reinforcing what buyers on the ground have already observed: the coast is becoming the country's most coveted currency.

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