With rental prices soaring across Dubai, many tenants are making the leap from renting to owning. A new report has found that nearly 30% of mortgage buyers in 2024 were prompted to purchase their own home after receiving eviction notices from landlords. Instead of navigating rising rents and uncertain lease renewals, these tenants saw homeownership as a financially sound and stable alternative.
Why Are More Renters Buying Homes in Dubai?
In Dubai, landlords have the right to issue eviction notices if they intend to sell the property or move in themselves. This has led to a significant shift in the market, with many tenants choosing to invest in their own home rather than continue renting.
According to the 2024 Mortgage Finder Report, 29% of buyers made their purchase after receiving an eviction notice, often due to their landlords selling the property. With rental costs steadily increasing, owning a home offers security and a chance to build long-term equity.
The Financial Case for Homeownership
One of the key factors influencing this trend is the financial advantage of buying over renting. The report highlights that:
- Mortgage rates in Dubai average around 4%, while rental yields exceed 6%, making homeownership a cost-effective alternative.
- In many cases, monthly mortgage payments are lower than equivalent rental costs, allowing buyers to build equity over time.
- Stable financing options and long-term planning are making homeownership an attractive investment, both emotionally and financially.
For many residents, the UAE’s tax-free environment and high rental yields make buying a property a smart long-term decision. In fact, 65% of buyers cited their long-term plans to stay in the UAE as their primary motivation for purchasing a home.
Who Is Buying? Key Market Insights
The report provides a breakdown of mortgage buyers in Dubai:
- 74% of mortgage borrowers are first-time buyers, indicating a growing trend of residents committing to homeownership.
- 41% of borrowers earn between AED 30,000 – 60,000 per month, while 26% earn up to AED 30,000.
- More than half (53%) of mortgage buyers are between the ages of 31 and 40.
- The average loan amount taken is AED 1.7 million, with a typical repayment term of 21 years.
Mortgage Market Continues to Outpace Sales Transactions
Mortgage transactions in Dubai have been growing at an impressive rate. In 2023, mortgage transactions increased by 29%, compared to a 21% increase in ready property sales. This gap widened even further in 2024, with mortgage transaction growth outpacing ready sales by 3.5 times.
As homeownership continues to rise, more buyers are prioritizing long-term investment over short-term renting, driven by favorable financing conditions and an evolving property landscape.
How to Get a Mortgage in Dubai
The process of securing a mortgage in Dubai is relatively straightforward, though requirements vary depending on the bank. Some key points to consider:
- Minimum salary requirement: Most banks require a monthly income of at least AED 15,000 to qualify for a mortgage. Some may accept lower salaries based on credit history and financial stability.
- Initial investment: Buyers typically need to make a 26% initial investment, which includes a 20% down payment and 6% transaction fees.
- Quick approvals: Many banks now offer same-day pre-approvals, allowing buyers to move forward quickly in the home-buying process.
Is Now the Right Time to Buy?
With mortgage rates remaining competitive and rental prices continuing to rise, owning a home in Dubai is becoming a more practical and financially beneficial option for many residents. The trend of tenants turning into homeowners is expected to grow further as more people recognize the long-term advantages of property ownership.
Thinking about making the move from renting to owning? Let Edwards & Towers guide you through the process and find the perfect property to fit your needs.
Contact us: https://edwardsandtowers.com/contact-us
