PC: Arabian Business
The mortgage transactions have gone up by 4.76% in February 2025 compared to January this year. This increased volume comes after the U.S. Federal Reserve decided to keep interest rates the same, making a favourable borrowing environment for prospective homebuyers in the area. During this period, mortgage transactions achieved a total value of AED 5.5 billion (approximately USD 1.5 billion) and therefore, the ongoing demand for property in Dubai is being seen.
The rise in mortgage activity is in line with other developments in the Dubai real estate market that have remained buoyant and seen expansion in the face of international economic conditions. Interest rates becoming stable have helped to rejuvenate buyers’ confidence, who are motivated to get to the real estate market. The Fed’s decision to leave rates unchanged has allayed fears of increasing debt service, which makes it a good time to buy sellers who want to close on their property sales with financing.
Dubai Land Department reported 4,200 mortgage transactions in February, of which the equivalent of 93 per cent was on residential properties. This is a surge in activity that shows Dubai remains a tempting destination for local and foreign investors. The city’s real estate offerings vary between luxury villas and affordable apartments concerning a wide range of buyer preferences and budgets.
In addition to these, there are also government initiatives aimed at increasing mortgage transactions as well as investment in the real estate sector to promote homeownership. The initiatives here involve favourable regulations, an easy lending process, and incentives for first-time homebuyers. Therefore, thanks to current market conditions, many are seizing the opportunity to make investments in property, adding to the demand.
They foresee positive momentum to continue in the mortgage market in the coming months if the Federal Reserve is on its current track of interest rates. It should attract more buyers into the market and due to that, the real estate sector is expected to record sustained growth in terms of stability in borrowing costs. Also, the city of Dubai experiences continuous growth in the development of infrastructure and amenities, which makes the city much sought after by those who intend to invest property in it.
In brief, the Federal Reserve’s choice to keep interest rates stagnant positively affected the rise of mortgage transactions in Dubai by 4.76 per cent in February 2025. The process of this development has created a favourable condition for home buyers, making more activities in the real estate market. The outlook for the real estate sector remains optimistic, with continued growth and demand expected in the months forward as Dubai continues to attract both local and international investors.
