The US Federal Reserve has reduced its target range by 0.25 per cent, bringing it to 3.75 per cent โ 4.00 per cent. The UAE Central Bank mirrored the cut through the dirham โ dollar peg, easing borrowing costs for households and investors in Dubai’s residential market.
The rate cut adds to growth driven by population inflows, high-net-worth individuals, tourism, foreign direct investment, and investor demand.
Dubai property market gains momentum after Federal Reserve cuts rates to 3.75%โ4.00%
Dubai has recorded approximately 163,000 transactions with a total sales value exceeding AED440 billion in the first 10 months of 2025.
Lower-cost financing is expected to support mortgage-backed purchases, boost developer payment plan attractiveness, and sustain demand across both off-plan and ready properties.
“This is exactly the mix global investors are looking for, lower borrowing costs paired with a stable, dollar-linked currency. When the U.S. eases and the UAE follow suit, it shows policy support without compromising stability. Thatโs a big positive for Dubai as buyers are increasingly international, yields remain attractive compared with London and Singapore, and the city continues to grow in population, projects, and infrastructure,” Louis Harding, CEO of betterhomes said in a statement.
Dubai real estate benefits from Fed rate cut and dirhamโdollar peg stability
The benefits of the rate cut are most likely to appear first in the mid-market and family segments, where even a 25-basis-point reduction can improve mortgage eligibility and monthly affordability.
Lower financing costs also support developers by reducing borrowing costs, enabling more flexible payment plans, and encouraging new launches to meet buyer demand.
