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As central banks in the United States and Europe move from aggressive tightening toward gradual easing, Dubai’s real estate sector continues to showcase remarkable stability. Strong regulation, robust liquidity, and a high volume of cash-led purchases are helping the emirate maintain momentum despite shifting global financial conditions.
According to an analysis by Elite Merit Real Estate, an estimated 54% of residential transactions in the second half of 2025 were cash-based, indicating that liquidity remains a defining feature of Dubai’s market. This cash-heavy environment has helped shield the city from the volatility caused by global interest rate swings.
Following two years of elevated borrowing costs worldwide, major central banks have begun lowering rates. In the U.S., the average 30-year mortgage rate has eased to around 6.2%, its lowest level since early 2023, while borrowing costs in Europe have also declined. The UAE has mirrored this trend, with the Central Bank reducing its overnight base rate from 4.15% to 3.90% in October 2025, after a similar cut in September. Home-loan rates offered by UAE banks now range between 3.75% and 4.99%, making financing more accessible while maintaining market resilience.
Global capital flows are becoming more selective, prioritizing governance and transparency over speculative leverage. Against this backdrop, Dubai continues to shine. Unlike London and New York, where sentiment has softened, Dubai maintains near-record transaction volumes and steady valuations. Cash-driven deals reduce exposure to rate volatility, while off-plan developments with guaranteed yields remain particularly attractive to international 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 is deeply connected to global capital cycles, yet its strong governance, dollar peg, and fully digital property systems consistently draw institutional investors from Europe and Asia seeking stability. In today’s landscape, trust is the ultimate currency — and Dubai’s blend of liquidity, regulation, and transparency ensures it continues to outperform.”
Elite Merit’s analysts expect that as global liquidity improves in 2026, growth in Dubai will remain steady and disciplined rather than speculative. With confidence replacing leverage as the primary investment filter, the emirate’s next growth phase is projected to prioritize structural stability and long-term value creation.
