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Dubai’s mortgage deals increased by 90%

According to data from Dubai Land Department (DLD), mortgage transactions recorded a growth of 44 percent in the first half of 2021 as compared with the same period last year. The total number of transactions in H1 2019 was 12,520 units, while in H1 2021 it was 19,920 — recording an increase of 91 percent. This ratio was only 21 percent in H1 2019.

The same report revealed that the value of Dubai mortgages rose by 38 percent from 76 billion dirhams in H1 2019 to 106 billion dirhams in H1 2021 — an increase of 29.2 billion dirhams. (8 billion USD).

According to Vaughan, the current slowdown in the UAE economy has yet to affect home prices or growth. “Over the past few years, we have seen a trend of high levels of confidence from borrowers with strong household finances and employment to support their mortgage repayments. The Dubai housing market is growing due to factors such as increased demand for units.

Vaughan attributed the increase in activity in the market, in part, to the major reform in lending policy introduced by the Central bank of the UAE in early 2020, which allowed banks to lend 5.0 percent more, reducing the down payment requirement for first-time buyers from 25 percent to 20 percent. “This change has made getting a mortgage more accessible for some people.” He added.

(1) “The ratio of Dubai’s housing mortgage commitments to its overall credit exceeded 85 percent this year, up from 74.5 percent in 2010 and 69.9 percent in 2011, based on data compiled by Bloomberg. The city accounted for about 9 percent of the emirate.

(2) “This will allow more freedom to buy the most suitable property at a price that fits their budget,” said Daniel Stanzler, senior sales executive at Arabian Homes.

(3) More than Dh 28 billion was pledged to Dubai developers this year through the first quarter of 2021, according to data from Real

According to the Dubai Land Department (DLD), the value of mortgages recorded in the emirate reached 20.9 billion in January 2021, the highest since October 2016. Total sales for the month also hit Dh29.4 billion, the highest since January 2018..

(4) A Dh7bn residential project in Dubailand will be launched next week, a developer has announced. The French Village, a 635-unit community offering serviced and bonded units as well as apartments, is being developed by Dubai-based GIC Real Estate. It is expected to include a variety of shops and restaurants.

The data highlighted that the property market in Dubai remains resilient and continues to generate investor interest despite the coronavirus pandemic.

The last few months of 2020, however, had seen more buyers taking advantage of the low prices, prompting analysts to predict that the market is stabilizing.

Half-half split mortgage transactions have been reported in Mortgage Finder for apartments and townhouses/villas, with townhouse/villa slice delivering slightly more at 55 percent. Also, Data Finder reveals that this year’s first half was reported 27.5 percent, and apartments were accounted 72.5 percent.

The research from Data Finder, coupled with our knowledge on the 50/50 split in completed mortgages for the same segments, suggests that more apartments are being purchased with cash than villa/townhouses. This makes sense given that villa/townhouses tend to be more expensive and the prices of those in prime areas of Dubai have seen notable increases of late. Furthermore, cash buyers often tend to be investors and apartments are generally more favorable for investment purposes,” Vaughan said.

Banks have continued to offer competitive mortgage products and terms, with interest rates remaining at record lows. It is possible to find mortgage rates available now from just 1.99 percent, compared to 2.49 percent in the middle of 2020.

“Banks in the UAE are open for business. Many are currently offering great headline mortgage rates to entice borrowers, with some going further and being more flexible in their lending criteria depending on the borrower profile. This is great news for potential buyers, but it also means they need to ensure they do their research and understand the full terms of the mortgage before signing on the dotted line. In essence, it’s more important now for borrowers to shop around and see past just the headline rate to look at the mortgage product as a whole and make sure they are getting the right deal,” said Vaughan.

Notable apartment completions were Bellevue Towers (360 units), Amna Tower Al Habtoor City (450 units), Bloom Towers JVC (946 units), and UNA Apartments (956 units). For villas, Janusia, Albizia, Sycamore, and Aster in Akoya Oxygen (1,644 units), Jumeirah Luxury in Jumeirah Golf Estates (290 units), and Villanova Amaranta 2 (352 units).

Approximately 26,318 apartments are under construction with the majority located in Downtown Dubai (15 percent), Dubailand (12 percent), and Mohammed Bin Rashid (MBR) City (16 percent). Over 80 per cent of the 7,800 newly built villas are going to be in MBR City and Dubai Land.

Key off-plan projects announced during Q2 included Sobha Waves at The Waterfront District (592 units), Palace Beach Residence Emaar Beachfront (541 units), Murooj Al Furjan (418 units), and Bliss Townhouses (335 units) at Arabian Ranches 3.

On a quarterly basis, residential asking rents were up 6.5 percent, the first substantial gain since 2014.

Compared to the same period last year, listed rents were down 7.8 percent for apartments but jumped 15.2 percent for villas, the highest record increase since our base year.

Average annual rents for 2-bed villas stood at AED105k, 3 bedroom units at AED151k, and 4-bedroom villas coming at AED 215k. Average rents per year for studio apartments were AED34k, 1-bed at AED51k, 2-beds at AED74k, and 3-bedroom apartments were AED113k. Residential occupancy in Dubai was estimated at 83 percent this quarter.