Dubai Mortgage Transactions Reach New Record
In Dubai, the mortgage transaction quantities rose to a new record with a total of 4,891 loans in July, an increase of 9.2 percent. According to the real estate monitor, this increase can be attributed to the use of lower interest rates.
Mortgage Activity Breakdown
The mortgages of new purchase money made up 45.6 percent of the activity, which is an increase of 2.3 percent compared to June. The average loan amounts were 1.8 million DH, and the value-to-value ratio (LTV) was 73.7 percent in July, slightly higher than the 73.5 percent in June.
Interest Rate Drop
The mortgage interest rates have recently dropped due to the reduction in interest rates by the United States from 5.5 percent in the previous year to 4.5 percent. Since the UAE dirham is pegged to the dollar, the Central Bank of the UAE also follows the Fed’s interest rate policy.
Market Trends
Although the LTV conditions increased slightly in July, they remain lower than the historical average of 75 to 77 percent. This probably reflects the continued influence of central bank measures that restrict fees and cost financing. The fact that mortgage volume achieved a new record indicates a strong trust between buyers and a more resilient, well-capitalized demand base.
Sign of Stress
The Dubai real estate market continues to operate at a historically high level of activity in the third quarter. However, there are signs of stress under the surface. The price growth remains positive, and transaction volumes are on track to break new records. Nevertheless, the pace of new supply, particularly from the off-plan segment, raises questions about the market’s ability to absorb this wave in a sustainable way.
Market Absorption
Almost 93,000 units were brought onto the market in the first seven months of 2025. As buyer selectivity increases, early indicators for absorption are becoming stronger. Although credit is strong, the persistence of lower credit-to-value conditions indicates that affordability pressure could make demand more directional in the coming months.
