Mortgage purchases still make up the bulk of transactions at various property brokerages in Dubai, indicating that bank lending remains a key driver of the residential property market, but cash purchases are becoming more common as interest rates climb. Property broking details Cash purchases made for 44 per cent of Better homes’ residential sales in the third quarter of 2026, up from 36 per cent in the second quarter.
Hence, the share of mortgage-backed purchases dropped to 56 per cent in Q3, down from 64 per cent in but still higher than the 50 per cent seen in Q1. The shift in the UAE Central Bank’s rate comes amid changes in the US monetary policy. The US Federal Reserve decreased its benchmark interest rate by 25 basis points in September 2026, reducing its target range to 3.75 to 4 per cent. The UAE dirham is pegged to the US dollar and hence, changes in the US interest rate impact the cost of borrowing in the UAE. Eibor is usually affected by monetary policy changes.
The Central Bank left its Base Rate steady on October 28. Better Homes does not foresee any major changes to normal fixed-rate mortgage products but does expect some small changes in the fourth quarter. The more immediate impact may be on borrowers’ ability to borrow rather than the actual mortgage rates offered.
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