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7/3/25, 9:29 AM Dubai property boom: Surge in mortgage financing and investor interest | Khaleej Times
“The market benefits from competitive mortgage rates, with some banks offering rates below 4%, undercutting the UAE Central Bank’s
benchmark. Flexible financing options, such as 70-30 and 80-20 payment plans, have eased access to homeownership, boosting demand,
particularly in Dubai, where mortgage transactions surged 4.76% in the first quarter of 2025,” they said.

The UAE’s currency peg to the US dollar ties mortgage rates to US Fed decisions, with expectations of modest rate cuts fostering affordability.
Government initiatives, including relaxed ownership laws and long-term visas, attract foreign investors, while a growing population and tourism
drive demand for residential properties.

The market is projected to grow steadily, with a focus on affordable housing and sustainable developments. However, challenges like rising
construction costs and potential global market volatility could impact financing conditions.

“With banks stepping in to finance off-plan properties and a 24% year-on-year increase in mortgage volumes in Dubai, the UAE’s mortgage
market remains a key catalyst for real estate growth, offering opportunities for both domestic and international buyers.”
Cash Buying Versus Mortgage Financing

Engineer Amer Khansaheb, Chief Executive Officer and Board Member, Union Properties, said traditionally, Dubai has been a cash-dominant
property market, particularly in the luxury segment, where high-net-worth individuals prefer the speed and flexibility of cash transactions.

“In recent years, we have seen a steady and healthy shift towards a more balanced mix of cash and mortgage-financed purchases. This shift
reflects evolving buyer profiles and market conditions,” Khansaheb told BTR.
He said mortgage financing is gaining notable traction, especially among end-users, residents, and mid-income buyers. Increasingly, family buyers
and long-term residents are turning to bank financing as a more sustainable route to homeownership, rather than committing large upfront capital.

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