In the UAE, 285.8 billion AED Went to Real Estate and Construction Activities.
The total bank financing for real estate and construction activities in the UAE reached 285.8 billion dirhams by the end of March 2023.
According to the latest report from the Central Bank, it leads banking financing and stands as the highest-funded sector.
Financial experts noted that this surge reflects the significant growth in the UAE real estate market.
As well as its ability to attract various types of investors.
There is a strong trend among both investors and ordinary individuals to invest in real estate.
Driven by confidence in the market’s continuous growth and the ease of financing.
Competition on Real Estate Financing
Banks are actively competing to provide real estate financing, given its high profitability and relatively lower risks.
They particularly favor financing ready-to-move-in or under-construction properties for individual end-users.
Rather than directly funding real estate development projects.
Breaking down the numbers, the Central Bank reported that real estate financing accounted for 235.8 billion dirhams by the end of March 2024.
Compared to 234.1 billion dirhams at the end of the previous December.
Construction financing amounted to 50 billion dirhams, down from 52.9 billion dirhams in December 2023.
As a result, real estate and construction activities lead in bank financing among other economic sectors.
What are the other main bank financing sectors in the UAE ?
Many sectors follow real estate and construction, such as:
- Financial institutions (175 billion dirhams)
- Trade (162.8 billion dirhams)
- Industry (93.3 billion dirhams)
- Transportation, storage, and communications (92.7 billion dirhams)
- Electricity, gas, and water (51.9 billion dirhams)
- Mining and quarries (18.5 billion dirhams)
- Agriculture (2.9 billion dirhams)
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Despite minor fluctuations during the year, real estate and construction financing remained relatively stable.
It reached 300.4 billion dirhams in March 2023.
Slightly decreased to 296.9 billion dirhams by the end of June 2023.
Then recorded 293 billion dirhams in September 2023, followed by 287 billion dirhams in December 2023.
Experts emphasize that banks’ interest in real estate financing reflects the booming real estate market in the UAE and its ability to attract diverse investors.
The ease of financing, coupled with strong market confidence, contributes to this trend.
While fluctuations are normal, the overall stability remains intact due to consistent demand and attractive returns.
