A recent report has revealed that nearly 30% of mortgage borrowers in Dubai last year chose to purchase homes after receiving rental eviction notices from their landlords. Instead of searching for new rental properties, many tenants found homeownership to be a more secure and financially viable alternative.
In Dubai, landlords can issue eviction notices if they plan to sell their property or move in themselves. The 2024 Mortgage Finder Report found that 29% of buyers decided to purchase a home after being served an eviction notice, largely due to landlords selling their properties. With rising rental prices, many tenants saw buying as a long-term solution to avoid unpredictable rent hikes.
The report also highlighted that 65% of buyers cited long-term residency plans in the UAE as their primary reason for purchasing. The financial advantages of homeownership in Dubai are significant, with mortgage rates averaging around 4% while rental yields exceed 6%. This results in mortgage payments often being lower than equivalent rent, allowing buyers to build equity rather than continuously paying higher rents. Additionally, stable financing options make purchasing a home a strategic move for long-term financial security.
First-time buyers accounted for 74% of mortgage borrowers, with 94% purchasing homes for personal use. Meanwhile, experienced buyers made up 26% of borrowers, primarily investing in the real estate market.
Income Bracket of Borrowers: 41% of mortgage borrowers earn between Dh30,000 and Dh60,000 per month, while 26% earn up to Dh30,000.
Age Group: More than half (53%) of borrowers fall within the 31-40 age group.
Resident Dominance: 95% of mortgage applicants are UAE residents.
Loan Statistics: The average mortgage loan amount is Dh1.7 million, with a typical repayment term of 21 years.
Mortgage transactions have consistently outpaced the growth of ready sales transactions. In 2023, mortgage transactions rose by 29%, compared to a 21% increase in ready sales. In 2024, mortgage transactions grew 39%, outpacing ready sales transactions by 3.5 times, which saw only an 11% increase.
Experts emphasize that homeownership is a wise financial decision as it allows individuals to build equity instead of continuously paying rent. Over time, the money spent on rent can be redirected toward mortgage payments, leading to full property ownership.
New property owners must make an initial investment of around 26%, which includes a 20% down payment and approximately 6% in transaction fees. However, as reported by Khaleej Times, banks have stopped financing Dubai Land Department (DLD) and broker fees.
Prospective buyers should carefully assess a property's true value before purchasing. Other factors to keep in mind include:
Community Service Charges: These costs vary depending on the property type and location.
Utility Costs: Apartment maintenance fees tend to be higher than those for villas.
Obtaining a mortgage in Dubai is a straightforward process, though requirements vary by bank. Most banks require a minimum monthly salary of Dh15,000 to qualify, though some may accept lower salaries based on factors such as credit score and overall financial stability.
Once the eligibility criteria are met and required documents submitted, many banks offer same-day pre-approvals, allowing buyers to proceed quickly. However, different banks have varying additional criteria, such as employment duration and existing debt obligations. To find the best mortgage option, buyers are advised to compare offers from multiple banks.
The trend of tenants transitioning to homeowners in Dubai is accelerating, driven by rising rents and eviction notices. With stable mortgage rates, attractive financial benefits, and long-term security, buying a home in Dubai has become an increasingly popular choice for residents looking to secure their future in the UAE.
