Dubai mortgages: changes as of February 1, 2025
As of February 1, 2025, the Central Bank of the United Arab Emirates has introduced new regulations for mortgages in Dubai. From now on, property purchase fees, including Dubai Land Department and agency fees, are no longer included in the mortgage amount. This change has a significant impact on investors and homebuyers, who must now anticipate these additional costs when purchasing a property.
In this article, we detail the implications of this new rule, its impact on the Dubai real estate market and possible solutions for investors.
Understanding the change in mortgage fees
Before February 2025, buyers could include up to 6% in fees (4% for the Dubai Land Department and 2% for real estate agencies) in their mortgage. This meant that these costs did not have to be paid immediately, but were integrated into the overall financing of the property.
Under the new regulations, these fees must now be paid separately, in addition to the initial deposit required by the bank. This decision is intended to reinforce the financial stability of the real estate market, but it also complicates access to home ownership for some buyers.
Let's take a concrete example:
- Before February 2025: a buyer wishing to purchase a property worth AED 2 million with an 80% loan could finance the AED 120,000 in costs with his credit.
- After February 2025: the investor must pay these costs in addition to his personal contribution, which represents a higher immediate cost. Instead of a 20% down payment, the investor will need to provide at least 26%.
This change is forcing buyers to rethink their financing strategy before investing in real estate in Dubai.
Why was this change introduced?
The Central Bank of the Emirates decided to apply this measure for several reasons:
- Strengthen the soundness of the real estate market: by forcing buyers to pay these fees immediately, the authorities limit excessive debt.
- Reduce the risk of a property bubble: stricter financing helps prevent excessive price rises due to easy borrowing.
- Protect financial institutions: banks that lend more prudently are less exposed to defaults.
- Encouraging solvent buyers: this measure favors investors and buyers with real financial capacity.
This decision is part of a drive to regulate Dubai's real estate market, which attracts many foreign investors. By imposing these new rules, the government aims to ensure a healthier, more stable and sustainable market.
What impact does this have on buyers and investors?
1. Increase in initial acquisition cost
With these new rules, buyers need more cash to finalize their transaction. This can complicate the purchase for :
- First-time buyers, who often have limited resources.
- Foreign investors, who need to anticipate additional funding.
- Buyers looking for maximum financing, as borrowing capacity is reduced.
2. A possible slowdown in transactions
Dubai's real estate market is known for its rapid growth and attractiveness. However, the new measures could slow transaction volumes, particularly in the secondary market, where buyers often finance a significant proportion with mortgages.
Property developers and agencies may have to adapt their offers to attract buyers and offset these new costs.
3. An opportunity for creditworthy buyers
On the other hand, this change could represent an opportunity for buyers with strong financial capabilities. With demand potentially on the decline, some sellers may be willing to negotiate prices to finalize their sales.
Solutions for buyers faced with these new rules
If you're thinking of buying a property in Dubai, there are several ways to get around or minimize the impact of these new rules.
1. Opt for a property with a developer's payment plan
Many developers in Dubai offer attractive payment plans that allow fees to be spread over several months or years. Some may include offers with no DLD fees, or offer flexible payments to ease the initial financial effort.
2. Take advantage of special offers from promoters
Faced with these new regulations, some promoters may launch promotional offers, such as :
- Reimbursement of DLD costs (4%).
- Payment plans over 5 to 10 years after handover.
- Reductions in selling prices to attract buyers.
3. Working with a real estate finance broker
Specialized mortgage brokers can help buyers find the best financing solutions, tailoring loan conditions and identifying the banks offering the most attractive rates.
4. Negotiate sales prices
With this new regulation, some sellers on the secondary market may be prepared to reduce their price to compensate for the additional costs borne by buyers. Good negotiation can save several thousand AED on the final purchase.
What to do if you are approved for a loan before February 2025?
Buyers who obtained mortgage approval before February 2025 can still benefit from the old regulations on one condition:
- The transfer of ownership must be completed by March 31, 2025.
After this date, even buyers with pre-approval will have to comply with the new rules and pay the fees separately.
Conclusion: how can we adapt to these changes?
The Dubai real estate market remains extremely attractive, despite these new rules. Savvy buyers and investors simply need to adapt their strategy to optimize their investment.
Keys to success :
- Plan your budget in advance to anticipate additional costs.
- Explore offers from developers who provide payment facilities.
- Consult a real estate expert for the best financing opportunities and advice.
- Negotiate prices to compensate for higher initial costs.
Although this new regulation imposes an additional financial effort on buyers, it guarantees greater stability in the real estate market and favors truly solvent investors.
If you want to invest in Dubai, it's essential to work with a real estate expert to identify the best opportunities and structure the right financing for your project.
Guillaume Giroux, Dubai Immo founder and real estate expert, Dubai, UAE
As founder of the Dubai Immo Group and a real estate investor, I bring you daily updates on the Dubai market. My aim is to provide you with all the keys you need to invest wisely and securely, by sharing my in-depth analysis and strategic advice.
