- Mortgage Finder recorded a 91% increase in completed mortgages between second half of 2020 and first half of 2021
- Trend in low interest and competitive mortgage products continues
- 40% of Dubai sales transactions in first half of 2021 were completed with a mortgage
Dubai: The mortgage market in Dubai has bounced back and is thriving following the slump felt during the height of the 2020 lockdown. The number of completed mortgages recorded in Dubai doubled between H2 2020 and H1 2021, reports Mortgage Finder, an independent mortgage consultancy and part of the Property Finder Group. With 40% of all sales transactions in the Emirate being completed with a mortgage.
“We have seen a significant uptick in demand this year which is really positive news and indicates more people are reaching the goal of owning their own home in Dubai. The increase in activity in the market can definitely be attributed, 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% more, reducing the down payment requirement for first-time buyers from 25% to 20%. This change has made getting a mortgage more accessible for some people” comments Ian Vaughan, Senior Mortgage Consultant at Mortgage Finder.
The average mortgage (loan) amount increased by 24% from H2 2020 to H1 2021, with the average mortgage size in the first half of 2021 sitting at AED 2.2M. There was an almost 50/50 split in mortgage transactions for villa/townhouses and apartments, with the villa/townhouse segment coming in slightly higher at 55%. Separately, research from Data Finder showed that in the first half of this year overall sales transactions in the villa/townhouse segment accounted for 27.5%, whilst apartments were 72.5%.
“There has been a lot of interest from borrowers wanting to purchase villas/townhouses, with many of them citing the need for more space as the main reason. 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 price 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 favourable for investment purposes,” Vaughan explains.
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%, compared to 2.49% 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,” says Vaughan.
About Mortgage Finder – www.mortgagefinder.ae
Mortgage Finder is the largest, independent mortgage consultancy in the UAE and part of the Property Finder Group. The Mortgage Finder team has decades of experience in international, residential and commercial lending.
Empaneled with every lender in the UAE, Mortgage Finder can access all home loan products in the market including exclusive rates and discounted products.
Mortgage Finder’s consultants take the time to understand the borrower’s needs to provide unbiased, professional advice to ensure they get the best mortgage product for their situation.
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© Press Release 2021