Lower interest rates, affordable property prices boosts demand for ownership

“Mortgage books of banks have seen an exponential growth after the UAE Central Bank relaxed the norms for first time home buyers by reducing the down payment requirements. We foresee this growth trend to continue primarily due to low interest rates for the near future, influence of peers and family, in addition to the financial benefits of buying greatly outweighing renting,” said Gambhir.

While the majority of banks are focused on the most sought-after salaried profiles clients, there is a slow but noticeable shift is happening with certain lenders now tapping into the self-employed sector.

“This is an ideal segment as businessmen went through a real-life stress test scenario due to the economic repercussions stemming from the Covid-19 pandemic and the measures implemented, mainly the lockdown and despite of it all they continued to service their personal and business obligations. More than any risk assessment criteria, this reflects the resilience and the ability of the business sector to perform even during adverse times,” added Gaurav.

Lion Mortgage Consultants expect the home residential mortgage market growth to continue at a steady pace. Banks find that real estate lending carries a low risk as compared to personal loans, credit cards and SME lending and, also has better margins than top rated corporate lending.

People living in rented homes is considerably higher in UAE than those living in their own properties. “Our estimate is that around 20 per cent of the UAE households live in their own homes, whereas the global average is 40 per cent, as more and more people look at making UAE as their home, we see a fair opportunity for mortgage buyers in the mid to long-term,” said Gambhir.