Dubai’s property boom leans on cash as mortgage lending lags

• Sales up almost 31% in 2025
• Cash-rich buyers dominate market
• Mortgage sales down 4%

Dubai property sales increased in volume and value in 2025, driven largely by cash buyers as mortgage-backed demand continued to lag, AGBI research has found.

Total residential and commercial sales reached AED686.8 billion ($187 billion) last year, up almost 31 percent on 2024, according to Dubai Land Department data. Transaction volumes rose nearly 19 percent.

The figures underscore the growing dominance of cash-rich international buyers, even as mortgage-backed deals tell a different story.

Mortgage sales totalled AED179.3 billion in 2025, down 4 percent year on year, even as the number of mortgage transactions rose by 23 percent to about 51,000 deals.

By value, mortgage transactions accounted for roughly a quarter of Dubai’s total property sales last year, despite rising transaction counts.

The average loan-to-value ratio fell to just under 73 percent, down more than 5 percentage points year on year, suggesting buyers were putting more cash into deals even when using bank finance.

Downpayment costs for mortgage buyers increased last February, when the Central Bank of the UAE told banks to stop financing the Dubai Land Department registration fees and real estate broker fees. The minimum downpayment for a mortgaged house in Dubai is 20 percent. 

The imbalance reflects structural features of the current cycle. High net worth individuals, overseas investors and regional buyers continue to dominate the market, particularly in prime and super-prime segments, where all-cash purchases are common.

Ali Siddiqui, research manager at Cavendish Maxwell told AGBI: “Mortgage penetration within the ready property segment has increased considerably in recent years, rising from 20,114 transactions in 2023 to 33,243 in 2025.

In 2023 mortgage purchases accounted for just over 44 percent of all sales transactions for ready units, compared to 61 percent in 2025. This trend suggests a structural shift rather than a cyclical one.”

“Cash-driven and mortgage-driven markets both have advantages and drawbacks. Cash-driven markets tend to be more sentiment-led, where a slowdown in capital flows can trigger rapid price adjustments. In contrast, mortgage-driven markets are more closely linked to household financial health rather than investor sentiment.”

Cavendish Maxwell expects mortgage volumes to rise as more banks begin offering mortgage products for under-construction units prior to completion, once certain criteria – namely approximately 50 percent construction complete and 50 percent payment made to the developer – are met.

For many residents, especially first-time buyers, rising prices combined with tighter bank underwriting standards have pushed ownership further out of reach.

Last July, Dubai launched an initiative designed to make it easier for first-time homebuyers to get a foot on the property ladder. The programme was welcomed by developers, lenders and government stakeholders, all of whom touted it as a boost for aspiring homeowners.

In practice, however, mortgage costs remain largely unchanged, earlier regulatory changes continue to make downpayments a challenge and residents hoping to buy off-plan still have rising rents to pay.

Further reading:

• Saudi mortgage lending drops to nine-year low
• State of the market: Dubai property in depth
• Dubai hotel developers cash in by adding apartments

For ready properties, buyers can now split the Dubai Land Department’s 4 percent registration fee into monthly instalments using credit cards under zero-interest plans.

This partially reverses a February decision that barred the registration fee from being included in mortgage financing – a change that raised upfront costs for buyers.

However, other closing fees such as the brokerage commission, trustee fee and mortgage registration charge remain excluded from mortgage coverage and are not addressed under the new initiative.