The increased rental rates in Dubai and the rising number of eviction notices have led many renters to consider owning their own homes instead of continuing to rent.
A recent report revealed that approximately 30% of those who took out mortgages last year ended up buying property after receiving eviction notices from their landlords.
In Dubai, landlords are legally allowed to evict tenants if they plan to sell the property or move in themselves.
With rents continuing to climb, many renters began viewing homeownership as a more financially stable and viable option.
Rather than searching for another rental, they opted to invest in property, often discovering that mortgage payments were comparable to or even lower than rent.
The survey found that around 65% of buyers cited long-term residence in the UAE as their primary motivation for purchasing a home.
Many were drawn to the financial benefits of owning versus renting. With rental yields exceeding 6% and mortgage rates averaging around 4%, homeownership has become an appealing option.
Instead of paying rent without any financial return, buyers see mortgage payments as a way to build equity and secure long-term financial stability.
The study also revealed that most mortgage borrowers are first-time homebuyers, with 94% purchasing homes for personal use rather than investment purposes.
Among those securing home loans, 41% earn between AED 30,000 and AED 60,000 per month, while 26% earn up to AED 30,000.
More than half of the buyers (51%) are between the ages of 31 and 40, indicating a growing trend of younger residents opting for homeownership.
Over the past three years, mortgage transactions have grown at a faster pace than ready property sales. In 2023, mortgage transactions increased by 29%, compared to a 21% rise in completed property sales.
This trend continued in 2024, with mortgage transactions surging by 39%—three times the growth rate of ready sales.
Experts recommend homeownership as a wise financial decision, as it provides long-term stability and serves as an investment for the future.
While an initial down payment of around 20% is required, along with transaction fees totaling approximately 6%, many buyers find that the benefits of owning outweigh the costs.
Prospective buyers are advised to research property values, factor in service charges and maintenance costs, and compare mortgage options from different banks.
Most banks in Dubai require a minimum monthly salary of AED 15,000 to qualify for a mortgage, although requirements vary based on financial stability and credit history.
Some banks even offer same-day pre-approvals, making the process faster and more accessible for buyers.
With mortgage repayments often lower than rental costs and the opportunity to build equity, homeownership is becoming an increasingly attractive option for Dubai residents.
As the real estate market continues to evolve, this trend is expected to shape the future of housing in the city, encouraging more renters to transition into homeowners.
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