Dubai Residential Mortgage Market Hits AED 21.8 Billion as Financing Activity Reaches New High
Around 10,000 home loans were recorded in Q3 2026, with villa and townhouse financing experiencing particularly strong growth despite a slowdown in overall property transactions.
Dubai's residential mortgage market recorded its strongest quarterly performance in the third quarter of 2026, as financing activity increased across several segments of the housing sector. The total value of residential mortgages reached approximately AED 21.8 billion, with around 10,000 loans registered between July and September.
Research published by property consultancy Cavendish Maxwell shows that mortgage lending exceeded the previous quarterly record of AED 20.5 billion, established during the final quarter of 2025.
The number of mortgage transactions also increased significantly, rising by almost 33% compared with the second quarter and 2.7% against the corresponding period last year.
The latest figures indicate that property financing continues to play an important role in Dubai's residential market, even as overall sales activity experiences a period of moderation.
Villa and townhouse financing records particularly strong growth
Larger residential properties experienced a notable increase in mortgage activity during the quarter.
Financing transactions involving villas and townhouses climbed by 40% compared with the previous quarter and were almost 14% higher than in Q3 2025.
Apartment mortgages also recorded positive quarterly movement, increasing by nearly 30%. However, transactions in this segment remained approximately 3.5% below their level a year earlier.
According to Cavendish Maxwell, the increase in mortgage activity was influenced by several factors, including completed property handovers, refinancing arrangements and purchases funded through bank loans.
This distinction is important when interpreting the figures. Higher mortgage values do not necessarily mean that new buyer demand has increased at the same rate, as refinancing and financing associated with completed developments also contribute to overall lending activity.
Dubai property market experiences a broader slowdown
The growth in mortgage financing contrasts with the performance of Dubai's wider residential sales market.
During Q3 2026, approximately 33,900 residential transactions were recorded, with a combined value of AED 72.6 billion. According to Cavendish Maxwell, transaction volumes declined by more than 38% year-on-year, while total sales value fell by approximately 47%.
Residential prices also showed signs of adjustment. Average property values reached AED 1,644 per square foot in September, representing a 2.2% annual decline. This was the first year-on-year decrease recorded by the consultancy since the recovery following the pandemic.
However, prices increased slightly by 0.3% compared with the preceding quarter.
The moderation follows an exceptionally strong performance in 2025, when Dubai registered more than 270,000 real estate transactions worth approximately AED 917 billion across the broader property market.
More recent figures from the Dubai Land Department indicate that approximately 122,900 property sales worth AED 378.6 billion took place during the first nine months of 2026. The reported value represented a 23.5% decline compared with the corresponding period last year.
Nearly 292,000 homes expected to enter Dubai's property market
The outlook for Dubai's residential sector will also be influenced by the substantial number of properties scheduled for completion over the next two years.
Cavendish Maxwell estimates that approximately 291,800 residential units are planned for delivery during 2027 and 2028.
The projected supply includes around 136,100 homes scheduled for 2027, followed by another 155,700 units in 2028.
Dubai had already completed approximately 38,000 residential units during the first nine months of 2026, representing a 41% increase compared with the same period last year. A further 24,000 homes were expected to be handed over before the end of December, subject to construction progress.
The scale of upcoming supply could increase competition among developers and property owners, particularly in locations where several residential projects are scheduled for completion around the same time.
Ronan Arthur, Director and Head of Residential Valuation at Cavendish Maxwell, highlighted that the market is moving beyond the rapid price appreciation experienced in previous years. He identified additional housing availability, weaker transaction activity, regional uncertainty and changing home-finance conditions among the factors influencing current market performance.
He also indicated that the impact of upcoming developments will depend on the market's ability to accommodate additional housing through population expansion, new household formation, employment opportunities and investment demand.
Mortgage growth highlights a changing Dubai property market
Dubai's latest mortgage figures demonstrate that financing activity remains an important part of the emirate's residential property sector, even as sales volumes and property values face downward pressure.
The increase in villa and townhouse lending, alongside stronger quarterly apartment mortgage activity, highlights continued movement across different residential segments.
However, the contribution of refinancing and completed property handovers means that the record lending figures should not be interpreted solely as an increase in first-time buyer demand.
With a substantial residential development pipeline approaching completion, the coming quarters will be important in determining how effectively Dubai's property market absorbs new homes while maintaining demand from residents, investors and international buyers.
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