Equity is the one number on your Dubai property that moves on two engines at once — the mortgage paying down and the market moving around. Most owners only watch one of them.
Equity is the difference between the current market value of the property and the outstanding balance on the mortgage. A unit bought at AED 2M with a 75% mortgage has AED 500k of starting equity. Five years later with AED 150k of principal repaid and the market having moved to AED 2.35M, equity sits around AED 1M — half from repayment, half from appreciation.
The honest test is whether you could realise that equity on a forced sale. Dubai secondary transactions typically settle 3-7% below quoted list in normal conditions and wider in soft markets. Equity of AED 1M on paper often realises as AED 820k-880k after exit agent fee, NOC, any early-settlement mortgage penalty (sometimes 1% of outstanding balance), and the price negotiation a motivated seller takes.
For refinancing or a second purchase, UAE banks typically allow up to 60-65% of current equity to be drawn against, and the valuation they use is their own, not yours.
Paper equity is a comfort. Drawable equity is a tool.
Related: Capital Appreciation, LTV, ROE, Mortgage.
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