Web Desk
DUBAI: As central banks in the U.S. and Europe shift from tightening to measured easing, Dubai’s real estate market continues to demonstrate resilience, underpinned by strong fundamentals. Disciplined regulation, liquidity strength, and a high share of cash-based transactions have helped the city maintain stability even as international investors adjust to a more selective growth environment. According to analysis by Elite Merit Real Estate, in H2 2025, an estimated 54% of residential property transactions were cash-based, highlighting that liquidity-driven purchases continue to dominate and insulate the market from global interest rate fluctuations.
After two years of record-high borrowing costs globally, central banks in the U.S. and Europe have signaled a cautious shift toward easing, with the average U.S. 30-year mortgage rate falling to around 6.2% — its lowest level since early 2023 — and European borrowing costs also trending lower. In the UAE, the Central Bank lowered its overnight base rate from 4.15% to 3.90% in October 2025, following a previous cut in September, while leading banks now offer home-loan interest rates in the 3.75–4.99% range. This gradual easing is forecasted to support mortgage activity, making financing more accessible to buyers, while still maintaining the market’s resilience.
Global markets are moving away from speculative leverage, with capital favoring jurisdictions defined by governance and transparency rather than momentum. In this context, Dubai stands out, as unlike London and New York, it maintains near-record transaction volumes and stable valuations. Cash-driven deals dominate, limiting interest rate exposure, while off-plan projects with guaranteed yields continue to attract investors.
“While borrowing costs in the UAE are expected to ease gradually, the real driver of momentum is confidence,” said Elkhan Salikhov, CEO of Elite Merit Real Estate. “Dubai remains closely linked to global capital cycles, yet its strong governance, dollar peg, and fully digitalised property systems continue to draw institutional investors from Europe and Asia seeking predictable value. In today’s environment, trust has become the ultimate currency — and Dubai’s balance of liquidity, regulation, and transparency ensures it continues to outperform.”
Elite Merit analysts note that global liquidity returning in 2026 will likely support steady, not speculative, growth. With confidence replacing leverage as the key investment filter, Dubai’s next cycle is expected to be defined by structural discipline and sustainable value creation.
