The UAE Central Bank’s move to raise rates will affect mortgage loans. For example; for every AED 1M borrowed, the increase in payment annually will be approximately AED 160 per 0.25% increase. If mortgage rates increase seven times this year, that's an increase of AED 1,160 per AED1M borrowed - an increase of AED 2,320 for an AED 2M loan, so on and so forth. Luxury, high-end property buyers with loans upward of AED 7M, will be most impacted, which in turn may impact the upper end of the Dubai property market.
I predict we will see an increase in demand across the market as buyers look to speed up their buying process to lock their mortgage product, and therefore their monthly payments, in place now, before they increase.
People who are sitting on the sidelines, or maybe thinking to purchase a property later in the year, may now come into the market sooner rather than later.
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