Demand for Home Loans in UAE Grows as More Residents Shift to Buying: RAKBank CEO
Formal / News style: Lower borrowing costs and rising rents encourage residents to shift from renting to homeownership, says RAKBank chief. Mortgage demand surges as affordability improves and long-term residency rises across the UAE. RAKBank reports strong growth in housing finance amid changing consumer preferences.
Demand for home loans in the United Arab Emirates is gaining significant momentum as more residents choose to transition from renting to owning property, according to Raheel Ahmed, Group CEO of RAKBANK. The shift—driven by changing demographics, improving affordability and lower borrowing costs—is reshaping the UAE’s residential financing landscape and fueling optimism among lenders and developers alike.
Khaleej Times
Speaking in an interview with Khaleej Times, Ahmed said that the bank is witnessing “very strong” demand for mortgage and personal loans as the cost of financing continues to decline and rents climb across major emirates. “As the cost of financing for borrowers is coming down, the attractiveness of financing is also increasing,” he noted, adding that this dynamic is encouraging more long-term residents to buy property.
Khaleej Times
From Renting to Owning: A Changing Trend
According to RAKBank’s CEO, many expatriates and UAE residents now view property ownership as a key milestone after spending several years in the country. Ahmed estimates that on average, residents take about 4.4 years to move from renting to buying, a trend he attributes to rising rental costs and a perception of better value in homeownership.
Khaleej Times
The traditional model of long-term rental living is gradually shifting. Rising rental prices in cities like Dubai and Abu Dhabi have made buying an increasingly attractive option, especially when monthly mortgage costs begin to align with – or even undercut – rental payments in key segments of the market.
arabianbusiness.com
This shift is reinforced by other recent data showing that sales listing interest has grown sharply, while rental demand has slowed, suggesting that home ownership is becoming the preferred choice for many. New residents, especially those who plan to stay long-term, are factoring ownership into their financial plans sooner than in previous cycles.
Khaleej Times
A Supportive Financial Environment
The UAE’s Central Bank has also played a role in this transformation. In line with global monetary policy shifts—particularly those influenced by the US Federal Reserve—the Central Bank of the UAE reduced its key policy rate from 4.40% in Q2 2025 to 4.15% by the end of the third quarter. That decrease has helped ease borrowing costs for home buyers and improved market sentiment.
Mortgage activity statistics support this trend. In Abu Dhabi during the first three quarters of 2025, apartment mortgages grew by nearly 117%, more than doubling year-on-year, while villa mortgages rose by 56.5%. In Dubai, villa and apartment mortgage activity also recorded increases, underscoring sustained demand across property types.
Khaleej Times
At RAKBank specifically, gross loans and advances expanded by 12% year-on-year to AED 55.9 billion in 2025. Personal loans and advances jumped to AED 25 billion, reflecting strength in both mortgage and expatriate lending, while business banking loans also saw notable growth.
Khaleej Times
Who’s Buying and Why
Ahmed identified three primary categories of home buyers now active in the UAE market:
Affluent newcomers who buy property immediately upon relocation due to confidence in the UAE’s long-term prospects.
Investors, particularly those buying off-plan units to capture returns from a booming real estate sector.
Professionals and long-stayers, including skilled workers and digital nomads who live and work in the UAE for several years before entering the property market.
Khaleej Times
Interestingly, he noted that a significant segment of affluent individuals purchase property almost immediately after arriving, underscoring the appeal of UAE residency and long-term settlement.
Khaleej Times
This shift in buying behaviour also mirrors broader demographic changes. The UAE’s population is increasingly composed of young, skilled professionals and family units, aided by schemes like the Golden Visa that attract long-stay residents. Ahmed pointed out that the average age of new arrivals has dropped to around 31.6 years, and more female residents are entering the market—factors that are reshaping housing demand and financing needs.
Khaleej Times
Policy and Market Impact
Analysts say that the steady increase in homeownership interest aligns with government-led initiatives aimed at expanding residential accessibility. For instance, Dubai launched a First-Time Home Buyer Programme, which over six months facilitated sales worth over AED 3.25 billion and helped thousands of residents step onto the property ladder. Programs like this demonstrate policy efforts to make homeownership more attainable for long-term residents.
The Times of India
Moreover, a broad shift in market sentiment—where buyers prioritize stable long-term residence over speculative investment—signals maturity in the UAE’s real estate sector. Recent data from digital real estate platforms suggest that many residents now plan to buy within the next six months, and sales interest is outpacing rental activity.
Khaleej Times
Outlook and Challenges
While demand for housing loans is rising, affordability remains tied to broader economic factors such as income levels and interest rates. Industry experts note that mortgage options are becoming more accessible, but debt servicing, deposit requirements and long-term financial commitments still shape buyer decisions.
thenationalnews.com
For RAKBank, the uptick in mortgage demand comes alongside growth in other credit segments, including personal loans and credit card spending—suggesting broad confidence in the UAE’s economic direction. Ahmed also praised regulatory frameworks that have helped strengthen the banking sector’s resilience and adaptability during this evolving cycle.
Khaleej Times
As the UAE continues to attract global talent, investors and long-term residents, the trajectory toward increased homeownership – supported by favorable financing trends – is expected to persist into 2026 and beyond.
About the Creator
Fiaz Ahmed
I am Fiaz Ahmed. I am a passionate writer. I love covering trending topics and breaking news. With a sharp eye for what’s happening around the world, and crafts timely and engaging stories that keep readers informed and updated.
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