Demand for home loans in UAE grows as more residents shift to buying: RAKBank CEO

Demand for home loans is growing in the UAE as people tend to stay longer in the country and transition from renting to buying amid rising rents and to take advantage of the drop in borrowing costs, said the group CEO of RAKBank.“The demand is very strong for personal loans and mortgages because, as the cost of financing for the borrowers is coming down, the attractiveness of financing is also increasing. As the rents go up and financing cost becomes cheaper, it becomes more attractive for people to buy. We are seeing a lot of people who have been here for 3-4 years shift from renting to buying. On average, the time for people to shift from renting to buying in the UAE is approximately 4.4 years,” Raheel Ahmed told Khaleej Times.“We are seeing almost a double-digit growth in lending, especially on the personal loan. We are a very big SME lending bank as well, so when interest rates come down, we see more take-up on the SME financing,” he said.Stay up to date with the latest news. Follow KT on WhatsApp Channels.Raheel Ahmed, RAKBank group CEOIn line with the US Federal Reserve’s monetary policy, the Central Bank of the UAE lowered its key policy rate (Base Rate) from 4.40 per cent in Q2 2025 to 4.15 per cent at the end of the third quarter.In Abu Dhabi, apartment mortgages grew by 116.9 per cent, more than doubling during the first three quarters of 2025, while villa mortgages rose by 56.5 per cent. In Dubai, mortgage activity increased across both property types, with villa mortgages rising by 6.1 per cent and apartment mortgages expanding by 22.5 per cent, highlighting sustained end-user interest, said the Central Bank in its December 2025 report.This was reflected in RAKBank’s figures as well, recording 12 per cent growth in gross loans and advances year-on-year in 2025 to Dh55.9 billion.Personal loans and advances increased by Dh1.7 billion to Dh25 billion, supported by mortgage and expat lending. Business banking loans and advances rose by Dh646 million to Dh11.3 billion, driven primarily by SME and commercial loans.Raheel said that there is a strong growth in credit card spending as well. Buying as soon as moving inHe noted that property buyers are bracketed into three categories.“One is the affluent person who is moving to the UAE and buys property because they have confidence in the country. Then, there are investors who are buying off-plan to make returns. Thirdly, people who are coming to find jobs, or who are digital nomads. Those people most probably want to settle down first and make sure that they are happy with the lifestyle and the job. Those people take around 3-4 years to buy,” he said, adding that inquiries for mortgages are quite high.He pointed out that a large chunk of the affluent people buy property as soon as they move in.Changing demographics In addition, he pointed out that the mix of population that is moving here is also changing.“More people are coming here on Golden Visa, moving with families. Then, more white-collar skilled workers are moving to the UAE, so the average age of people who are moving has come down to 31.6 years. You are also seeing more female residents. In the past, a lot of male blue-collar workers used to come. Now it is shifting as well, and that is also driving different patterns in terms of how people consume financing, borrowing, and housing,” Raheel Ahmed said during the interview.He noted that the market is largely driven by new residents or existing residents. “It's a purpose-driven purchase, as opposed to a speculative purchase, which is good for the economy.”He praised the role of the Central Bank of the UAE in introducing regulations that led to the growth of the banking industry.Rent or buy? First-time buyers push UAE property market towards ownership7 in 10 UAE residents plan to buy property this year: Are you one of them?Over 2,000 residents buy property for the first time in Dubai under programme

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Demand for home loans in UAE grows as more residents shift to buying: RAKBank CEO

Demand for home loans is growing in the UAE as people tend to stay longer in the country and transition from renting to buying amid rising rents and to take advantage of the drop in borrowing costs, said the group CEO of RAKBank.

“The demand is very strong for personal loans and mortgages because, as the cost of financing for the borrowers is coming down, the attractiveness of financing is also increasing. As the rents go up and financing cost becomes cheaper, it becomes more attractive for people to buy. We are seeing a lot of people who have been here for 3-4 years shift from renting to buying. On average, the time for people to shift from renting to buying in the UAE is approximately 4.4 years,” Raheel Ahmed told Khaleej Times.

“We are seeing almost a double-digit growth in lending, especially on the personal loan. We are a very big SME lending bank as well, so when interest rates come down, we see more take-up on the SME financing,” he said.

Stay up to date with the latest news. Follow KT on WhatsApp Channels.

In line with the US Federal Reserve’s monetary policy, the Central Bank of the UAE lowered its key policy rate (Base Rate) from 4.40 per cent in Q2 2025 to 4.15 per cent at the end of the third quarter.

In Abu Dhabi, apartment mortgages grew by 116.9 per cent, more than doubling during the first three quarters of 2025, while villa mortgages rose by 56.5 per cent. In Dubai, mortgage activity increased across both property types, with villa mortgages rising by 6.1 per cent and apartment mortgages expanding by 22.5 per cent, highlighting sustained end-user interest, said the Central Bank in its December 2025 report.

This was reflected in RAKBank’s figures as well, recording 12 per cent growth in gross loans and advances year-on-year in 2025 to Dh55.9 billion.

Personal loans and advances increased by Dh1.7 billion to Dh25 billion, supported by mortgage and expat lending. Business banking loans and advances rose by Dh646 million to Dh11.3 billion, driven primarily by SME and commercial loans.

Raheel said that there is a strong growth in credit card spending as well.

Buying as soon as moving in

He noted that property buyers are bracketed into three categories.

“One is the affluent person who is moving to the UAE and buys property because they have confidence in the country. Then, there are investors who are buying off-plan to make returns. Thirdly, people who are coming to find jobs, or who are digital nomads. Those people most probably want to settle down first and make sure that they are happy with the lifestyle and the job. Those people take around 3-4 years to buy,” he said, adding that inquiries for mortgages are quite high.

He pointed out that a large chunk of the affluent people buy property as soon as they move in.

Changing demographics

In addition, he pointed out that the mix of population that is moving here is also changing.

“More people are coming here on Golden Visa, moving with families. Then, more white-collar skilled workers are moving to the UAE, so the average age of people who are moving has come down to 31.6 years. You are also seeing more female residents. In the past, a lot of male blue-collar workers used to come. Now it is shifting as well, and that is also driving different patterns in terms of how people consume financing, borrowing, and housing,” Raheel Ahmed said during the interview.

He noted that the market is largely driven by new residents or existing residents. “It's a purpose-driven purchase, as opposed to a speculative purchase, which is good for the economy.”

He praised the role of the Central Bank of the UAE in introducing regulations that led to the growth of the banking industry.