DUBAI: As central banks across the U.S. and Europe transition from aggressive tightening to a more gradual easing cycle, Dubai’s real estate market continues to showcase remarkable resilience. Supported by solid fundamentals, strict regulatory oversight, and a high proportion of cash-led transactions, the city has maintained stability even as global investors navigate a more cautious growth landscape.
According to Elite Merit Real Estate, approximately 54% of residential sales in H2 2025 were completed in cash, underscoring how liquidity-driven purchases remain a defining force that shields the market from fluctuations in global interest rates.
Following two years of elevated borrowing costs worldwide, monetary authorities in the West have begun signaling a measured policy shift. The average U.S. 30-year mortgage rate has eased to around 6.2%, its lowest point since early 2023, while borrowing costs in Europe are also trending downward. In the UAE, the Central Bank reduced its overnight base rate from 4.15% to 3.90% in October 2025, after a prior cut in September. Major banks are now offering mortgage rates between 3.75% and 4.99%, making home financing more accessible and supporting a steady increase in mortgage activity.
As global markets increasingly prioritize governance, risk management, and transparency over speculative leverage, Dubai stands out. Unlike other major hubs such as London or New York, the emirate continues to record strong transaction volumes and stable valuations. Cash-led deals minimize exposure to interest rate volatility, while off-plan developments with assured returns remain highly attractive to investors.
“Although UAE borrowing costs are likely to ease at a controlled pace, confidence remains the true catalyst behind Dubai’s momentum,” said Elkhan Salikhov, CEO of Elite Merit Real Estate. “Dubai is aligned with global capital flows, yet its robust governance, dollar peg, and fully digital property ecosystem make it a preferred destination for institutional investors from Europe and Asia seeking reliable long-term value. In today’s climate, trust is the new currency — and Dubai’s combination of liquidity, regulation, and transparency ensures it continues to outperform.”
Elite Merit analysts expect the global return of liquidity in 2026 to support steady rather than speculative growth. With confidence now outweighing leverage as the primary investment driver, Dubai’s upcoming market cycle is positioned to emphasize structural discipline and sustainable value creation.
