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Dubai's mortgage market continues to exhibit resilience as the U.S. Federal Reserve maintains interest rates at 4.25%-4.50%, reinforcing stability in global financial markets. Investor interest in Dubai's real estate sector remains high, contributing to sustained mortgage demand. According to Dubai Land Department data, mortgage transactions increased by 4.76% from January to February 2025, while total mortgage value surged by 32.14% during the same period. Although mortgage activity at Lomond saw a 4.39% increase in 2024 compared to 2023, the overall mortgage value experienced a 3% decline. Industry experts highlight strong buyer confidence, attractive loan-to-value ratios, and favourable financing options, with market stability offering potential advantages for both first-time buyers and seasoned investors.
Dubai's mortgage sector continues to demonstrate resilience as the U.S. Federal Reserve maintains interest rates at 4.25%-4.50%, a decision that signals stability within global financial markets. With Dubai's real estate market consistently attracting investors and end-users, the mortgage sector is experiencing sustained demand, supported by favourable lending conditions. Advertisement
Louis Harding, CEO at Betterhomes, mentioned that there has been no decline in buyer demand due to interest rates. He noted that March witnessed a substantial rise in buyer enquiries compared to the previous year. While an interest rate cut is always welcomed, he pointed out that Dubai's real estate market remains confident and not excessively leveraged. He further emphasised that the market has experienced unprecedented price growth over the past four years, much of which occurred during an upward cycle in interest rates.
Data from the Dubai Land Department indicates that Dubai's mortgage activity continues to rise in 2025. The number of transactions increased by 4.76%, climbing from 2,919 in January to 3,058 in February. The total mortgage value surged by 32.14%, from AED 10.86 billion in January to AED 14.35 billion in February. By mid-March, 2,065 transactions had been recorded, amounting to a total mortgage value of AED 10.26 billion, showcasing ongoing market strength.
Mortgage transactions at Lomond, an affiliate of Betterhomes, rose by 4.39% in 2024 compared to 2023. However, the overall mortgage value declined by 3% during the same period. Jeffrey de Souza, Head of Mortgages at Lomond, highlighted that this continued growth reflects strong buyer confidence and improved access to home financing. He also pointed out that favourable loan-to-value ratios offer up to 80% financing for first-time buyers. Despite the UAE Central Bank recently advising banks to exclude associated fee financing from mortgages, the number of mortgage buyers remains largely unaffected.
With interest rates stabilising, buyers may consider opting for fixed-rate mortgages to secure predictable payments. Eligibility criteria remain favourable, offering competitive financing options for both local and international investors. While mortgage rates remain stable at present, future shifts in global markets could influence lending conditions, making this a strategic period for exploring financing opportunities.
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