As central banks in the US and Europe transition from aggressive tightening toward gradual easing, Dubai’s real estate market continues to demonstrate notable resilience supported by strong fundamentals.
Disciplined regulation, abundant liquidity, and a high share of cash transactions have helped maintain stability even as global investors adopt a more selective, risk-aware approach.
According to new analysis from Elite Merit Real Estate, cash buyers made up 54% of residential property transactions during the second half of 2025 – a trend that highlights the dominance of liquidity-driven purchases in the emirate.
After more than two years of elevated borrowing costs, policymakers in the US and Europe have signalled further easing. In the US, the average 30-year mortgage rate has fallen to around 6.2%, its lowest level since early 2023, while borrowing costs across 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, following a cut the previous month. Leading banks now offer home-loan rates between 3.75% and 4.99%, a development expected to boost mortgage activity and improve affordability.
With global capital shifting away from speculative, highly leveraged investments, markets that offer strong governance and transparency are gaining traction. Dubai continues to post high transaction volumes and stable valuations, driven by cash-heavy deals and strong demand for off-plan projects with guaranteed yields.
“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 expect that improving global liquidity in 2026 will support steady, rather than speculative growth. Confidence, structural discipline, and long-term value creation are likely to define the next investment cycle.
