Interest rate fluctuations have a direct impact on real estate affordability, especially for mortgage-dependent buyers. In 2025, the UAE property market is experiencing a shift as global economic trends influence borrowing costs.

When interest rates rise, monthly mortgage payments increase, causing some buyers to delay purchasing or explore lower-priced communities. However, Dubai’s strong economy, high salaries, and flexible mortgage products have helped cushion the impact. Many banks now offer fixed-rate mortgages, refinance options, and improved eligibility criteria, making financing more accessible.

Interestingly, rising interest rates have shifted some demand from mortgage buyers to cash investors, who continue to dominate the luxury and high-end off-plan segments. This shift has maintained market stability and kept property prices from declining.

Overall, while interest rates may affect short-term buyer decisions, Dubai’s strong rental market, investor incentives, and economic resilience continue to attract property seekers across all segments.