Banks compete by submitting offers on real estate financing until the end of the year

Banks operating in the country compete by offering offers on real estate financing to citizens and residents, which includes, for national customers, a grace period to start payment of up to 90 days for new real estate financing, and 180 days in the event of transferring existing financing, while the period reaches 60 days for new real estate financing, and 120 days for transferring existing financing for resident customers.

According to these banks, there is also a complete exemption from transaction fees, early settlement fees, and evaluation fees.

These offers come as a result of the banks’ desire to seize a share of the market and maximize profits before the end of the last quarter of the year, as these offers are expected to continue until the end of December.

Other banks made offers to attract customers, including a reduction in interest rates to a decreasing rate of 3.74 to 4.25%, compared to 4 to 4.49% at the beginning of 2025.

Noticeable recovery

In response, banking expert, Ahmed Arafat, said, “The demand for real estate financing is witnessing a noticeable recovery in light of the acceleration in project offerings and the large demand from investors, whether inside or outside the country,” noting that “reducing the interest rate twice during September and October would increase demand and support banks in expanding their lending activity.”

Arafat stated that “the growth in demand for real estate financing from the beginning of this year until now has ranged between 10 and 15%,” pointing out that “banks are racing to submit offers to increase their profits and seize a share of the market.”

He added, “The last quarter of the year is usually the most active in granting funding for the purpose of closing profitable budgets and achieving the rest of the year’s goals.”

Promotional offers

For her part, banking expert, Sheikha Al-Ali, said, “The demand for purchasing residential units has become common among citizens and residents, instead of paying high rents, and this is what encourages developers to offer projects that suit all segments, and thus banks respond by offering incentive financing offers.”

She added, “The real estate loan is usually long-term for more than 15 years, and sometimes 20 years, so it is important for the client to understand all the details related to the postponements and not to rush to transfer his debt unless he carefully studies the amount of interest he has already paid and which he will not benefit from if he transfers his loan to another bank, as in most cases the interest is decreasing, meaning that the banks get the largest percentage of interest at the beginning of repayment.”

Banks submitted offers that included a reduction in interest rates to a decreasing rate of 3.74 to 4.25%.

The Central Bank of the Emirates reduced the “base rate” on overnight deposit facilities by 25 basis points, from 4.15% to 3.90%, as of yesterday.

This is the second reduction in a row in two consecutive months at the same rate, as the first time was last September.

This decision comes after the US Federal Reserve announced that it reduced the interest rate on “reserve” balances by 25 basis points at its meeting the day before yesterday.

The Central Bank also decided to keep the rate applicable to borrowing short-term liquidity from the Central Bank through all existing credit facilities at 50 basis points above the base rate.

The base rate, which is linked to the interest rate on reserve balances approved by the Federal Reserve, determines the general position of monetary policy, and also provides a minimum effective interest rate for overnight money market rates in the country.

The Central Bank reduces interest rates for the second month in a row