Dubai, UAE — About 10,000 home loans were registered in Dubai between July and September, more than in any quarter on record by value. In the same three months, the value of home sales fell by nearly half, so more of the money moving through the Dubai mortgage market is now coming from banks than from buyers’ own savings.
For Indian investors, the contrast with home is sharp. UAE lenders advertise fixed rates near 4%, while SBI’s home loans start at 7.25%. Yet most buyers living in India cannot use that cheaper credit.
AED 21.8 Billion From About 10,000 Loans
Residential mortgages reached a record AED 21.8 billion ($5.94 billion) in the third quarter, consultancy Cavendish Maxwell said, according to Arabian Business. The previous high was AED 20.5 billion in the last quarter of 2025.
The number of mortgage deals rose about 33% from the second quarter and 2.7% from a year earlier. Villa and townhouse loans rose 40% on the quarter. Apartment loans rose about 30%, but were still 3.5% below last year’s level.
Refinancing And Handovers Swell The Dubai Mortgage Market
Cavendish Maxwell linked the rise to handovers and refinancing as well as new purchases. That changes how the record reads. A buyer paying a handover balance with a loan, or an owner switching banks, adds to the total without adding a new sale.
So the Dubai mortgage market is busier, but that does not prove more people are buying.
Sales Fell 47% In Value While Borrowing Rose
The consultancy counted about 33,900 residential sales worth AED 72.6 billion in the quarter, down more than 38% in number and 47% in value from a year earlier. Average prices were 2.2% lower than a year earlier at AED 1,644 per sq ft in September.
On those figures, mortgages equalled about 30% of residential sales value, by Invest Dubai Today’s calculation. That is a large share for a market where cash buyers have usually dominated. Ronan Arthur, head of residential valuation at Cavendish Maxwell, said “home finance conditions have softened.”
Also read: Dubai Q3 property sales drop 45% as prices slip
A 4% Dirham Loan Against 7.25% At SBI
The rate gap with India is wide. Broker comparisons this year put the best fixed UAE mortgage rates at about 3.75% to 4.15%, priced off EIBOR. SBI’s home loan rates ran from 7.25% to 8.45% in June, with the Reserve Bank of India’s repo rate at 5.25%.
On a 20-year loan of Rs 1 crore, that is the difference between a monthly instalment of about Rs 80,600 at 7.5% and about Rs 60,600 at 4%. Home loans are still growing fast in India. RBI Governor Sanjay Malhotra put housing loan growth at 11% in June. Anarock counted a 3% rise in third-quarter housing sales across India’s top seven cities, with Mumbai the largest market.
India’s sales are growing on borrowed money. In the Dubai mortgage market, borrowing is rising while sales fall. The two are moving in opposite directions.
Rupee Earners Carry A Currency Bet On Dirham Debt
The cheaper credit in the Dubai mortgage market is mostly out of reach for buyers living in India. Indian banks cannot lend for Liberalised Remittance Scheme transfers, which cap each person at $250,000 a year. Resident Indians who want a UAE mortgage need to check first whether foreign borrowing is allowed under India’s foreign-exchange rules.
For NRIs paid in dirhams, a loan from the Dubai mortgage market carries no currency mismatch. For anyone repaying from rupee income, it does. The dirham has gained about 6.8% against the rupee this year, which pushes up the rupee cost of every instalment. Lender guides also suggest non-residents can usually borrow up to about half a property’s value, against higher limits for UAE residents.
136,100 Homes Next Year, Then 155,700 In 2028
For the Dubai mortgage market, the bigger risk sits in supply. Cavendish Maxwell expects 136,100 homes to complete in 2027 and 155,700 in 2028, after 38,000 in the first nine months of this year.
More completions mean more handover payments, and more of those are likely to be financed. They also mean more competition for tenants. Borrowers whose rental income covers their instalments today may find that margin thinner when rents face new supply.
The Next Quarter Should Show Who Is Borrowing
The fourth-quarter numbers will show whether refinancing keeps doing most of the work, or whether first-time buyers return. The Dubai mortgage market split between new purchase loans and refinances is the figure to look for.
In India, a cut to the repo rate would narrow the gap with UAE lenders. Any rise in EIBOR would do the same from the other side.
Cheaper Dubai Credit Suits Those Who Earn In Dirhams
For investors, the record loan book shows Dubai relying more on debt just as prices start to ease. That adds risk if values fall further. End-users who live in their homes are less exposed than investors relying on rent. For Indian buyers, the Dubai mortgage market favours NRIs with UAE salaries. Buyers in Mumbai, Bengaluru or Gurugram funding from India still have to send cash under LRS, which leaves them with the 7.25% rupee rate at home and no access to the 4% abroad.
Discover more from Invest Dubai Today - Dubai Realty Insights
Subscribe to get the latest posts sent to your email.
Comments 1