Dubai’s mortgage market is showing resilience despite broader challenges in the property sector, particularly influenced by recent geopolitical tensions. Data from the Dubai Land Department, along with insights from local brokers, reveals that while overall property transactions have slowed significantly, lending remains strong.

Stability in Mortgage Lending Amid a Decline in Sales

In recent months, Dubai has experienced a significant decline in property sales, with transactions plummeting nearly 22% in April and a staggering 45% in May compared to the same time last year. The total value of property sales dropped to AED 28.9 billion ($7.9 billion) in May, reflecting a nearly 57% decrease from the previous month and May 2025. However, the mortgage lending landscape paints a more positive picture. Interestingly, while the number of mortgage transactions has decreased, the total value of those loans has increased year on year, outperforming the cash sales market.

In April, the mortgage transaction volume rose approximately 11% month-over-month, showcasing a strong demand for financing even during a downturn in property sales. By May, the total value of mortgage lending reached AED 17.5 billion, which is nearly 17% higher than a year ago. This contrasting trend indicates that, while fewer buyers may be entering the market, those who are choosing to take out mortgages are securing larger loans, a sign of confidence in the long-term investment potential of Dubai real estate.

Changing Dynamics in Buyer Behavior

According to brokers, the decrease in the number of mortgage deals primarily reflects a reduction in active buyers rather than a tightening of lending regulations by banks. Fixed mortgage rates have remained stable throughout this period, and loan-to-value (LTV) ratios continue to sit at 80% for first-time buyers purchasing completed properties. This relative stability offers a conducive environment for potential homeowners and investors alike.

Adriaan Rossouw, head of mortgages at Lomond, a subsidiary of Betterhomes, highlighted that the underlying framework of Dubai’s mortgage market remains robust. With attractive rates and transparent LTV structures, banks are still lending; however, they are doing so with more scrutiny. Lenders have shifted their focus to specific sectors, applying lower LTV ratios for individuals employed in fields like aviation, hospitality, real estate, and oil and gas. Moreover, self-employed borrowers are now facing stricter documentation requirements.

The Impact of Geopolitical Factors

Despite the uncertainty brought on by recent geopolitical events, UAE banks have not strayed from their lending commitments. Central bank data indicates that the mortgage and real estate loan portfolios held by banks have consistently increased from April 2025 to April 2026, now totaling AED 1.45 trillion, reflecting an annual growth of 11.5%. This suggests a strong appetite for mortgage lending even amid fluctuating market dynamics.

With mortgage inquiries seeing an uptick since the beginning of the year, the market appears poised for a potential rebound. Although cash transactions dominated the market in the previous two years, accounting for approximately three-quarters of all sales in April, the resilience in mortgage lending is encouraging for prospective homeowners and investors.

High-net-worth individuals, particularly those involved in prime and super-prime segments, tend to be cautious during instances of geopolitical instability. In contrast, mortgaged buyers—often salaried residents purchasing homes for personal use—are generally shielded from such volatility. This distinction underscores the varying levels of risk exposure in the current market, emphasizing the crucial role of financing in ensuring sustained activity in Dubai’s real estate sector.