Dubai, UAE, October: Cash purchases rose to 44% of betterhomes residential sales in Q3 2026, up from 36% in Q2, according to the betterhomes Q3 2026 Dubai residential market report. The shift came in a quarter that ended with the Central Bank of the UAE raising its Base Rate from 3.65% to 3.90%, effective 17 September. It points to a deep pool of buyers able to transact without relying on finance, a source of stability as borrowing costs move.
Mortgages still fund most purchases:
Mortgage-backed purchases accounted for 56% of betterhomes sales in Q3, compared with 64% in Q2 and 50% in Q1. Finance remains the main route to ownership for betterhomes buyers, and the market behind it remains active. Lomond reports healthy lender appetite across both resident and non-resident buyers, with banks competing for new business, particularly refinancing and buy-out cases.
With cash purchasers able to move quickly, mortgage buyers who are ready to finance are best placed to compete.
What the rate rise means for buyers:
The increase followed the US Federal Reserve’s 25 basis point move to a target range of 3.75% to 4.00%, in line with the dirham’s peg to the US dollar. UAE mortgage pricing is shaped by EIBOR, which follows Federal Reserve policy. The rise took effect less than two weeks before quarter-end, so Q3 completions may reflect financing arranged earlier.
Lomond does not expect significant changes to standard fixed-rate mortgage products, with minor interest rate adjustments expected from Q4. The biggest effect will be felt on affordability. Banks are likely to raise the rate they use to assess affordability starting in October, which can reduce the loan amount a buyer is eligible for. Buyers who have not yet reached the final offer letter stage by the end of October may receive a revised offer, which makes a valid pre-approval at the time of signing the MOU essential.
Borrowers on fixed rates are generally protected for their fixed period, while variable-rate borrowers may see repayments change as their loans reprice. For those whose fixed period has ended, several banks are offering refinancing incentives, including waived processing and valuation fees and reimbursement of early settlement fees. First-time buyers also have support: as at 8 June, more than 3,200 buyers had purchased properties worth over AED 5 billion through Dubai’s First-Time Home Buyer Programme.
“This is a modest move, and we don’t expect major changes to standard fixed-rate products, although minor interest rate adjustments are expected. The biggest impact for buyers will be on affordability, as banks are likely to assess mortgage eligibility at a higher interest rate from October, potentially reducing how much buyers can borrow. My advice is to have a valid pre-approval in place before signing the MOU and to compare fixed and variable options carefully. Existing homeowners whose fixed period has ended should review their mortgage too, as banks are competing for refinancing business.”
Adriaan Rossouw, Head of Mortgages, Lomond
betterhomes enters Q4 seeing a broad buyer base, with finance funding most purchases and cash buyers adding depth. As the rate change feeds through, the advantage goes to buyers who secure their financing before they commit to a home.
