Dubai’s residential mortgage market reached a record AED 21.8 billion in Q3 2026, driven by a 40% increase in villa and townhouse financing, even as overall property sales slowed.
Dubai’s real estate market is showing an interesting trend. While property sales and prices have started to cool, mortgage activity continues to grow. According to new research by property consultancy Cavendish Maxwell, residential mortgage transactions in Dubai reached a record AED 21.8 billion ($5.94 billion) in the third quarter of 2026, with approximately 10,000 loans secured.
This marks the highest quarterly mortgage value recorded in the emirate, surpassing the previous record of AED 20.5 billion in Q4 2025. Mortgage transaction volumes also increased by nearly 33% compared with the previous quarter, showing that property financing remains an active part of Dubai’s real estate market.
Villa and Townhouse Mortgages Lead the Growth
One of the biggest highlights of the latest report is the growing demand for financing villas and townhouses.
Mortgage transactions for villas and townhouses increased by 40% quarter-on-quarter and nearly 14% compared with the same period last year.
Apartment mortgage transactions also recorded positive growth, rising almost 30% compared with Q2 2026. However, they remained 3.5% lower than their year-earlier levels.
According to Cavendish Maxwell, the increase in mortgage activity is linked to new property handovers, refinancing and purchases made through home loans.
This suggests that buyers and existing property owners are continuing to use mortgage financing, even as the wider residential market experiences a slowdown.
Dubai Property Sales Show Signs of Cooling
Despite record mortgage activity, Dubai’s overall residential property market has started showing signs of moderation.
During Q3 2026, the emirate recorded approximately 33,900 residential transactions worth AED 72.6 billion. This represents a decline of more than 38% in transaction volumes and 47% in sales value compared with the same period last year.
Average residential property prices also declined by 2.2% year-on-year to AED 1,644 per square foot in September 2026.
This slowdown follows an exceptional 2025, when Dubai recorded more than AED 917 billion in total real estate transactions.
The latest figures indicate that the market is gradually moving away from its previous record-breaking growth phase.
Nearly 292,000 New Homes Expected by 2028
Another important factor shaping Dubai’s property market is the expected increase in residential supply.
Cavendish Maxwell estimates that approximately 291,800 residential units are scheduled for completion in 2027 and 2028.
The expected supply includes:
136,100 homes scheduled for completion in 2027.
155,700 homes expected in 2028.
Around 38,000 homes already delivered during the first nine months of 2026.
An additional 24,000 units are expected to be handed over before the end of 2026, subject to construction progress.
The increase in available properties could create more competition among developers and sellers, potentially putting pressure on residential prices.
What Does This Mean for Dubai Property Buyers and Investors?
Dubai’s real estate market is entering a more balanced phase. Record mortgage lending suggests that financing activity remains strong, particularly in the villa and townhouse segments.
However, rising property supply and slower transaction activity mean buyers may have more options when comparing projects, locations and payment plans.
For investors, the coming two years will be important. Population growth, employment opportunities, rental demand and the delivery of new homes will play a major role in determining how well the market absorbs the additional supply.
Overall, Dubai’s record AED 21.8 billion mortgage market highlights continued activity in property financing, even as the wider real estate market adjusts to changing conditions.