The UAE’s real estate market is witnessing a notable surge in demand, and local banks are playing an increasingly central role in fuelling this momentum.
With mortgage rates now dipping below 4%, financial institutions are stepping up to offer flexible lending terms that are reshaping how both residents and international buyers approach property ownership.
Competitive Rates and Easier Payment Plans
Despite subdued expectations for interest rate cuts in the near future, several UAE banks are offering mortgage deals at rates lower than the UAE Central Bank benchmark. These attractive lending terms are helping to drive increased mortgage activity across the market.
Key among the enablers of this trend are payment structures such as the 70/30 and 80/20 plans, where buyers pay the majority of the property cost during construction. Banks are now stepping in to finance the remaining balance once at least 50% of the property value has been paid, making home ownership more accessible, especially for those pursuing long-term residency through real estate investment. Banks are also removing earlier thresholds like the AED 1 million upfront payment requirement linked to golden visa eligibility.
Growing Appeal for Global Investors
Global economic shifts including rising taxes, tariffs, are prompting a growing number of international investors to look towards the UAE. The strength of currencies such as the British pound and euro, both of which have gained against the UAE dirham in 2025, is further enhancing the affordability of local properties for foreign buyers.
These factors, combined with the country’s high standard of living and stable infrastructure, are attracting a broader demographic of buyers. Not only are ultra-high-net-worth individuals active in the market, but there’s also a marked increase in interest from salaried professionals and non-resident investors.
Banks Step Up Amid High Demand
Data from Property Monitor shows a 24% year-on-year rise in mortgage volumes in Dubai in Q1 2025. Industry leaders note that banks are no longer limiting financing to Tier 1 developers, signaling a wider adoption of these mortgage models.
AI Streamlines Mortgage Applications
In parallel, the integration of AI into the mortgage process is bringing unprecedented speed and convenience. With consumer expectations leaning towards seamless digital interactions, platforms offering tech-enabled solutions are gaining trust. As banks continue modernising their systems, tools like AI chatbots are helping bridge gaps between borrower needs and financial services delivery.
UAE banks, through a combination of competitive mortgage rates, strategic financing options, and technological innovation, are now at the forefront of a growing real estate wave. As the market evolves, these developments signal a shift in how property transactions are financed and executed in the Emirates.
