Dubai's Mortgage Market Stays Strong Amid Global Shifts

Dubai Mortgage Market Remains Robust Amid Fed's Steady Rates

Dubai's real estate market continues to attract both investors and end-users alike, leading to sustained demand in the mortgage market. This situation is further stabilized by the US Federal Reserve maintaining interest rates between 4.25% and 4.50% this month, signaling safety to global financial markets.

Demand is Rising, but Average Loan Amount Declines

The number of mortgage transactions managed by Lomond, a partner of Betterhomes, increased by 4.39% in 2024 compared to 2023. However, the total loan amount showed a 3% decrease in the same period. This indicates that while more people are taking out loans, the average amount might be lower than a year ago. Nevertheless, Dubai's real estate market remains attractive, thanks to favorable loan conditions.

“We do not see any slowdown due to the rates – in fact, this March saw significantly more interest from homebuyers than last year. Although a rate cut is always welcome, Dubai's real estate market is confident and not overly indebted. It's important to note that the market has achieved unprecedented price growth over the last four years, largely amid rate hikes,” emphasized the CEO of Betterhomes.

Stability and Confidence Characterize the Market

The latest data from the Dubai Land Department (DLD) supports the trend: 3,058 mortgage transactions were registered in February 2025, compared to 2,919 in January – a 4.76 percent increase. Even more remarkable is that the total value of loans rose by more than 32 percent, from 10.86 billion dirhams to 14.35 billion dirhams. By March 19, a further 2,065 mortgage transactions occurred, totaling 10.26 billion dirhams in value – indicating that demand has clearly persisted.

Available Financing and Favorable LTV Ratios

The market's growth is partly supported by favorable loan conditions. First-time homebuyers can finance up to 80 percent of the property's value through competitive loan-to-value (LTV) ratios. Although the UAE Central Bank recently instructed banks not to incorporate incidental costs into mortgage loans, this has not visibly affected the number of loan applicants.

Fixed-Rate Loans Could Be Advantageous in the Current Situation

According to Betterhomes, with stable interest rates, buyers might consider opting for fixed-rate loans to ensure predictable installments in the long run. “While mortgage rates are currently stable, global market changes may affect the lending environment in the future – so it is strategically wise to consider financing options now,” added the brokerage firm.

Summary: Dubai's Mortgage Market Stands on Solid Ground

Fed rate stability positively impacts global financial markets, including Dubai.

The number of mortgage transactions is rising, although the average loan amount may decrease.

First-time homebuyers can obtain loans with up to 80% LTV ratio.

Fixed-rate loans might be beneficial given the current environment.

Thus, Dubai's real estate market continues to develop dynamically, and favorable loan schemes allow both investors and home seekers to find ideal opportunities. With rates held stable, the market is expected to remain attractive, particularly for those planning long-term investments.

(The source of the article is from Dubai Land Department and Betterhomes.)