Dubai’s Property Market Shows Resilience Amid Global Economic Stability
Dubai Real Estate Mortgage Sector Remains Resilient Amid US Federal Reserve’s Rate Hold: A Glimpse into the Future of Financing in the Emirate. The Dubai real estate market continues to flourish, with mortgage transactions increasing by 4.76% in February 2025 compared to January, according to the latest data from the Dubai Land Department (DLD). This upward trend highlights the market’s resilience, even as the US Federal Reserve maintains interest rates at 4.25%-4.50%, providing stability across global financial markets.
A new report by Betterhomes reveals that Dubai’s mortgage sector remains robust, with strong demand for home financing supported by favorable lending conditions. Despite higher interest rates compared to previous years, buyer interest has not waned—in fact, March 2025 saw a significant surge in enquiries compared to the same period last year.
Why Dubai’s Real Estate Market Remains Confident
Louis Harding, CEO of Betterhomes, explains:
“We haven’t seen any slowdown in buyer demand due to interest rates. While a rate cut is always welcomed, Dubai’s real estate market remains confident and not over-leveraged. It’s also important to note that the market has experienced unprecedented price growth over the last four years, most of which was during an upward cycle in interest rates.”
This statement underscores a key factor in Dubai’s real estate success: the market is not overly dependent on debt, making it more resilient to global economic fluctuations.
Key Trends in Dubai’s Mortgage Sector (Q1 2025)
1. Rising Mortgage Transactions & Values
DLD data shows a steady increase in mortgage activity:
- Transactions rose by 4.76% (from 2,919 in January to 3,058 in February)
- Total mortgage value surged by 32.14% (from AED 10.86 billion to AED 14.35 billion)
- March 2025 (as of March 19) recorded 2,065 transactions worth AED 10.26 billion
2. Year-on-Year Growth in 2024
Lomond, a Betterhomes affiliate, reported:
- 4.39% increase in mortgage transactions in 2024 vs. 2023
- A slight 3% decline in total mortgage value, likely due to buyers opting for smaller loans or higher down payments
Jeffrey de Souza, Head of Mortgages at Lomond, added:
“This sustained growth indicates strong buyer confidence and increased accessibility to home financing, with favorable loan-to-value (LTV) ratios offering up to 80% financing for first-time buyers.”
3. UAE Central Bank’s Mortgage Regulations
The UAE Central Bank recently advised banks to stop adding associated fees to mortgages, yet this has not deterred buyers. The mortgage market remains strong, with both expats and UAE nationals benefiting from competitive financing options.
Why Now Is a Great Time to Invest in Dubai Real Estate
1. Stable Interest Rates Encourage Buyers
With the Fed holding rates steady, borrowers can lock in fixed-rate mortgages, ensuring predictable payments. This stability is particularly attractive for:
- First-time homebuyers
- Investors looking for long-term assets
- Expats securing residency through property investments
2. High Loan-to-Value (LTV) Ratios
- First-time buyers can secure up to 80% financing
- Second-home buyers and investors can access up to 70-75% LTV
- Competitive mortgage rates compared to global markets
3. Strong Capital Appreciation & Rental Yields
Dubai’s real estate has seen consistent price growth, with prime areas like:
- Palm Jumeirah
- Downtown Dubai
- Dubai Marina
- Emirates Hills
delivering strong ROI and rental yields (6-8% annually).
4. Future-Proof Market with Government Initiatives
Dubai’s pro-business policies, such as:
- Golden Visa programs (linked to property investment)
- Tax-free ownership
- Expo 2025 & Dubai Economic Agenda (D33) boosting demand
make it a safe haven for investors.
What’s Next for Dubai’s Mortgage Market?
While the current landscape remains stable, potential future changes in global markets could impact lending conditions. Experts suggest that now may be the best time to secure financing before any shifts occur.
Key Takeaways for Buyers & Investors:
✅ Mortgage demand is rising—get pre-approved early
✅ Fixed-rate loans provide payment certainty
✅ High LTV ratios make homeownership more accessible
✅ Dubai’s market is resilient, with strong long-term growth prospects
