Fed’s 25 bps Cut Gives Dubai Real Estate A Timely Macro Boost

The U.S. Federal Reserve’s 25-basis-point rate cut mirrored by the UAE Central Bank through the dirham–dollar peg as it gives Dubai’s residential market fresh momentum, adding to growth driven by population inflows, HNWIs, tourism, FDI, and strong investor demand.

The Fed lowered its target range by 0.25%, bringing it to 3.75%–4.00%, while the UAE base rate moved lower in tandem, effectively easing borrowing costs for households and investors. In a market where Dubai has recorded approximately 163,000 transactions with a total sales value exceeding AED 440 billion in 10 months of 2025, lower-cost financing is expected to support mortgage-backed purchases, boost developer payment plan attractiveness, and sustain robust demand across both off-plan and ready properties.

Louis Harding, CEO of betterhomes, says, “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. That’s 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.”

The immediate 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 sustained buyer demand.