Homeowners in the UAE are increasingly using equity release loans to leverage their property investments amid rising real estate values and favorable interest rates. This strategy allows them to access cash tied up in their homes which can be used for purchasing additional properties or renovating existing ones.

For instance, Natasha Hatherall, CEO of TishTash marketing agency, recently released equity from her Palm Jumeirah home to buy two investment properties. With over AED 6 million ($1.6 million) in equity, she opted for a AED 1 million release to capitalize on better investment opportunities earning over 10% returns from her new rentals.

The UAE property market is booming fuelled by government initiatives and economic growth. Recent data shows apartment sales prices in Dubai rose by 5% and villa prices by 8% in Q2 2024. Homeowners are now benefiting from increased equity with equity release rates averaging around 4% while property returns range from 5% to 10%.

Equity release can be used specifically for real estate purchases or home improvements and the UAE Central Bank guidelines support this trend. There’s been a notable 34% increase in equity release transactions in 2024 compared to the previous year.

Experts caution homeowners to be mindful of their financial obligations when considering equity release emphasizing the importance of managing repayment capacity and using funds wisely. As interest rates are expected to drop further now is seen as an advantageous time for homeowners to explore equity release options, ensuring they align with their long-term financial strategies.