In 2025, the Dubai property market showcased remarkable growth, with substantial increases in both sales volume and value. This surge can be attributed primarily to cash buyers dominating the market as mortgage-related transactions experienced a decline. Research from AGBI highlights these trends, illustrating the shifting dynamics within the real estate sector.

Significant Increase in Property Sales

According to data from the Dubai Land Department, the total value of residential and commercial property sales reached AED 686.8 billion (approximately USD 187 billion) in 2025, marking an impressive rise of nearly 31% compared to the previous year. This growth was accompanied by a nearly 19% increase in transaction volumes. The data emphasizes the ongoing trend of cash-rich international buyers taking the lead in property acquisitions, even as the demand for mortgage financing struggles to keep pace.

Interestingly, while the overall sales figures surged, mortgage sales saw a slight decline, totaling AED 179.3 billion—a 4% decrease year-on-year. Notably, the number of mortgage transactions actually rose by 23%, reaching around 51,000 deals. This paradox indicates a shift in market behavior, where buyers are opting for cash purchases despite a rise in mortgage transaction volume.

Trends in Mortgage Financing

By value, mortgage transactions accounted for roughly 25% of Dubai’s total property sales in 2025, even with the rising number of deals. The average loan-to-value ratio also decreased to just under 73%, indicating that buyers are investing more cash upfront when utilizing mortgage financing. This reluctance to rely solely on loans may stem from increased costs associated with mortgage buying, as the Central Bank of the UAE recently mandated that banks no longer finance registration fees and broker fees for property purchases.

The current landscape reflects the market’s structural features, particularly the increased participation of high-net-worth individuals and overseas investors, especially in prime property segments. Ali Siddiqui, research manager at Cavendish Maxwell, noted a substantial rise in mortgage penetration within the ready property market. Mortgage transactions for ready units rose from 20,114 in 2023 to 33,243 in 2025. This shift suggests changing buyer behavior, transitioning from a predominantly cash-driven market to one where financing becomes increasingly prevalent.

Challenges for First-Time Homebuyers

For many aspiring homeowners, particularly first-time buyers, the rising property prices and stricter bank lending criteria have made homeownership increasingly challenging. To address this issue, Dubai launched an initiative aimed at easing the path for first-time homebuyers to enter the market. This program was generally well-received by various stakeholders, including developers and lenders.

In practical terms, however, homeowners still face persistent hurdles, as mortgage costs remain largely unchanged. Furthermore, the earlier regulatory changes have made down payments more challenging to meet, while rising rents continue to burden those interested in buying off-plan properties. Recent measures, such as allowing buyers to split the Dubai Land Department’s registration fee into monthly installments using credit cards, represent initial steps toward mitigating these challenges, even though other fees still remain excluded from mortgage financing.

In conclusion, the Dubai property market in 2025 showcased a mix of strong sales growth driven by cash buyers while facing challenges in the mortgage sector. The shifting dynamics underscore the importance of understanding both cash- and mortgage-driven market trends for buyers and investors alike. As banks begin to offer more mortgage options for under-construction properties, there may yet be a shift back toward financing, benefiting buyers who are struggling with rising costs.