Dubai’s mortgage market broke records in 2021, with the total number of transactions registered with Dubai Land Department reached 19,520, exceeding the previous high in 2017 by 26%.
Q1 2021 had the most mortgage registrations in a single quarter, with January being the strongest month of the year, recording 3,004 mortgage transactions with a value of AED20.82 billion
The market remained strong throughout the year with Q4 2021 recording 4,187 mortgage registrations – 10% more than the same period in 2020 and 21% more than 2019.
December, generally known as a quieter month within the mortgage industry, remained consistent compared to previous years recording only a 1.3% increase in mortgage registrations compared to 2020 and 3.8% compared to 2019. There were 1,178 mortgage registrations in December 2021, with a value of AED10.08 billion.
The market has witnessed an impressive bounce back following the slump felt during the first half of 2020 when strict lockdown measures were implemented to tackle the pandemic. Since restrictions were lifted in Dubai, the market has been on an upward trajectory which continued throughout 2021.
To provide further context on the overall growth witnessed within the mortgage market in the past year it is worth comparing data with the pre-pandemic level of 2019. The number of mortgage transactions in 2021 were up by 57% compared to 2019.
“The growth seen in 2021 can really be attributed to several factors which all aligned to make an impact on our industry; from the various large scale events which took place in the UAE, like Expo 2020, bringing more people into the country; to the major reform in loan-to-value ratios in 2020, which made buying more affordable for many; and finally the continued low interest rate environment,” said Mohamed Kaswani, Managing Director at Mortgage Finder.
In 2020, the UAE Central Bank reduced the down payment requirement for first-time buyers in the UAE by 5%, taking it to 20% for non-UAE nationals and 15% for nationals. The change in loan-to-value ratios made a real difference to some first-time buyers as data from Mortgage Finder, an independent mortgage consultancy and part of the Property Finder Group, showed that between Q1 - Q3 2021 83% of its mortgage transactions were for first-time buyers.
“The reduction in down payment requirements for first-time buyers, coupled with the general low-rate environment made buying much more achievable for some people. With fixed rates available from as little as 1.99% and the leading rate sitting at just 2.39%, compared to 2019 where the leading product rate was 3.75%, buyers were able to take advantage of excellent mortgage offers to get onto the housing ladder,” Kaswani added.
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