Why Liquidity In Prime And Ultra-Prime Real Estate Matters More Than Market Cycles

Global real estate commentary tends to focus on macroeconomic cycles, like interest rates, inflation, recessions and recoveries. While these forces undeniably shape housing markets, they tend to obscure a more important truth for serious investors and end-users alike – that not all real estate behaves the same during economic cycles. In fact, in prime and ultra-prime segments, liquidity often matters more than timing the market.

And in today’s geopolitically uncertain climate, shifting rate expectations, and globally mobile wealth, this distinction is especially relevant for Abu Dhabi.

Traditional real estate analysis assumes a broad, unified market cycle: expansion, peak, contraction, and recovery. This framework might work when it comes to mass residential housing, but it breaks down at the top of the market.

You see, prime and ultra-prime assets operate on a different axis altogether. Their performance is less correlated with local wage growth or mortgage affordability, and far more influenced by factors such as scarcity, global capital flows, lifestyle demand, and long-term wealth preservation. As a result, these assets often experience shallower corrections, faster recoveries, and in some cases, sustained demand even during global downturns.

Liquidity in real estate is not only about whether an asset can be sold, but how quickly, to whom, and at what level of price certainty.

In prime and ultra-prime markets, liquidity is supported by several factors, including a deep and diversified buyer pool (local, regional, and international) and limited or controlled supply. There must also be higher levels of cash or low-leverage transactions, and in these markets, end-user demand is driven by lifestyle and security, not speculation.

When markets are more volatile, these factors matter far more than headline price movements. Owners with liquid assets retain flexibility: they can sell, refinance, hold, or reposition without being forced into suboptimal decisions.

Abu Dhabi has quietly emerged as a compelling case study in prime real estate liquidity. Long perceived as a conservative or purely end-user market, the capital has increasingly attracted international buyers seeking stability, governance, and long-term visibility.

What differentiates Abu Dhabi is not rapid price inflation, but structural strength. It offers highly regulated development pipelines and a focus on low-density, high-quality master planning. There’s also a growing population of long-term residents and global families, and lifestyle assets anchored by culture, waterfronts, education, and healthcare

In ultra-prime waterfront and branded residential segments, transaction volumes may be smaller than mass markets, but resale demand remains consistent, particularly for well-located, well-designed assets with limited direct competition. This creates a form of “quiet liquidity”, which is perceived as less speculative, but more resilient.

For high-net-worth buyers, real estate is rarely about short-term yield maximisation, but rather, it looks at capital preservation, optionality, and long-term utility.

Highly liquid prime assets function almost like real assets with embedded insurance. They hedge geopolitical risk by offering geographic diversification, hedge inflation through tangible value and replacement cost and hedge lifestyle risk by offering immediate personal use.

And perhaps most importantly, liquidity protects investors from becoming forced sellers during adverse cycles; a risk far more damaging than short-term price fluctuations.

The persistent temptation in real estate is to ask: Is now the right time to buy?

But a better question might actually be: Is this the right asset to own, regardless of timing?

In prime and ultra-prime segments, asset selection consistently outperforms market timing. Buyers who focus on location, scarcity, build quality, and long-term desirability, for example, tend to navigate cycles far more successfully than those attempting to enter and exit based on macro forecasts.

Macroeconomic cycles will always exist, and they should never be ignored. But for investors and end-users operating at the top of the market, liquidity is the true constant.

In cities like Abu Dhabi, where safety, regulation, and lifestyle intersect,  prime and ultra-prime real estate increasingly behaves less like a cyclical trade and more like a strategic allocation.

In uncertain times, owning assets that remain desirable, tradable, and resilient is not just prudent, it’s essential. While I’m becoming increasingly used to hearing Abu Dhabi being touted as the capital of finance, blockchain, climate tech and more, this quote I took away from a breakfast meeting recently frames it best – from a senior professional in the global investing world: “Abu Dhabi is the centre of the universe”.

About the author: Felicia Agmyren is the Founder, Owner, and Managing Partner of REX Real Estate – a boutique luxury real estate advisory firm based in Abu Dhabi. Founded in 2008, REX Real Estate advises high-net-worth individuals, family offices, and international investors on premium residential and strategic property investments across the UAE.