Mortgage transaction volumes surged in Dubai to a new record with a total of 4,891 loans in July, a 9.2 percent increase month-on-month, as property buyers take advantage of lower interest rates, according to Property Monitor.
Data showed that the new purchase money mortgages accounted for 45.6 percent of activity, up 2.3 percent from June, with average loan amounts of AED 1.8 million and a loan-to-value (LTV) ratio of 73.7 percent, slightly above June’s 73.5 percent.
Mortgage rates have dropped recently as the US has reduced interest rates from 5.5 percent last year to 4.5 percent. Since the UAE dirham is pegged to the dollar, the Central Bank of the UAE also follows the Fed rate policy.
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Although LTV ratios edged up slightly in July, they remain lower than the historical average of 75-77 percent, likely reflecting the ongoing influence of Central Bank measures restricting fee and cost financing.
“These tighter conditions raise the upfront cash hurdle for buyers, but the fact that mortgage volumes hit a new record suggests strong confidence among buyers and a more resilient, well-capitalised demand base,” the monthly report said.
As the third quarter is underway, Dubai’s real estate market continues to operate at historically high levels of activity, but signs of strain are beginning to emerge beneath the surface, said Property Monitor.
“Price growth remains positive, and transaction volumes are on pace to break new records, yet the pace of new supply — particularly from the off-plan segment — raises questions about the market’s capacity to absorb this wave in a sustainable manner.”
According to Property Monitor data, nearly 93,000 units were launched in the first seven months of 2025 as buyer selectivity is rising, and early indicators of softening absorption are becoming more pronounced.
“Although borrowing activity is strong, the persistence of lower loan-to-value ratios suggests that affordability pressures may start to shape demand more directly in the months ahead,” it added.
