30-03-2025
Mortgage landscape in Dubai remains resilient as Fed holds rates steady
The mortgage landscape in Dubai remains resilient as the US Federal Reserve held interest rates steady earlier this month at 4.25 per cent-4.50 per cent, a move that signals stability for global financial markets.
Mortgage transactions at Lomond, an affiliate of Betterhomes, have increased by 4.39 per cent in 2024 compared to 2023. However, the overall value of mortgages decreased by 3 per cent during the same period.
With Dubai's real estate sector continuing to attract investors and end-users alike, the mortgage market is experiencing sustained demand, driven by favourable lending conditions.
'We haven't seen any slowdown in buyer demand due to interest rates. In fact, March has seen a significant increase in buyer enquiries compared to last year. While a rate cut is always welcomed, Dubai's real estate market remains confident and not over-leveraged. It is 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,' said Louis Harding, CEO at Betterhomes.
According to the (DLD) Dubai Land Department's data, Dubai's mortgage activity continues to rise in 2025. Transactions were up 4.76 per cent from 2,919 in January to 3,058 in February. Total mortgage value increased 32.14 per cent from Dh10.86 billion (January) to Dh14.35 billion (February). As of March 19, 2,065 transactions were recorded with a total value of Dh10.26 billion, showing continued market strength.
'This sustained growth indicates strong buyer confidence and increased accessibility to home financing, with favourable loan-to-value (LTV) ratios offering up to 80 per cent financing for first-time buyers. Although the UAE Central Bank recently advised banks to stop adding associated fees financing to mortgages, the number of mortgage buyers remains largely unaffected,' said Jeffrey de Souza, Head of Mortgages at Lomond.
With interest rates stabilising, buyers may consider securing fixed-rate mortgages to lock in predictable payments, Betterhomes said. 'While mortgage rates are stable for now, future shifts in global markets could impact lending conditions—making this a strategic time to explore financing options,' the brokerage added.
