Mortgage Finder sees 59% increase in enquiries from lower priced properties, favourable interest rates

• Clients who may have earlier failed banks’ stress tests are more likely to pass them today
• The average property price sought by clients in the lower income bracket is AED795,000
• Banks require a minimum salary of between AED10,000 to AED12,000 to give a mortgage

Dubai: Current lower property prices combined with favourable interest rates are driving up mortgage enquiries across the UAE. According to Mortgage Finder, an independent mortgage consultancy part of the Property Finder Group, there has been an approximately 59 percent overall increase in enquiries between 2018 and 2019.

Many of these requests for home finance have been from those on the higher end of the scale. However, the current property prices have not only led to an increase in interest from those on higher incomes. Mortgage Finder has also found an 11 percent increase in enquiries from clients earning between AED10,000 to AED12,000 per month between 2018 and 2019. Approximately 5 percent of enquiries to Mortgage Finder come from those in this income bracket.

Of the enquiries received by Mortgage Finder, the average property price that those in this bracket consider is AED795,000.

While Mortgage Finder has always received enquiries from those in this income bracket, this increase can be attributed predominantly to the current property prices and the competitive interest rates offered by banks, which have both come together to make buying more accessible to some who may not have been able to do so previously. Lower mortgage interest rates also mean lower repayments for borrowers, leaving them with more disposable income.

There was a reduction in interest rates in 2019 as the UAE Central Bank cut rates thrice, in line with the US Federal Reserve. Lower interest rates translate into lower borrowing costs, so that’s good news for new borrowers as well as existing borrowers.

Banks have been more competitive with regards to the mortgage products they are offering. In 2018, the average mortgage interest rate was in the region of 3.99 percent. However, in recent months, there have been notable decreases, with some rates as low as 2.75 percent fixed for one year. Some banks have also lowered their reversion margins, which will be of benefit after the initial fixed rate period ends.

While interest rates are not a deciding factor in whether to buy, the lower rates are definitely an encouraging factor for those who are sitting on the fence with their property purchases. The rates released recently by some leading banks are now closer to those offered by lenders in other parts of the world, like Europe, which clients tend to compare to when considering finance options.

“When banks calculate affordability and stress tests today, those who may not have passed the tests previously have a better chance of doing so now as a lower property price and interest rate means lower monthly mortgage repayments,” explains Richard Boyd, Director at Mortgage Finder.

In general, banks require a minimum salary of between AED10,000 to AED12,000 to give a mortgage. When getting a mortgage in the UAE, banks will look at the borrower’s affordability. To measure this, they will take into account 50 percent of the borrower’s monthly income and deduct any credit commitments from this to calculate maximum affordability. They will then apply a stress test by applying a higher rate of interest (varies depending on each bank) to ensure that should interest rates rise, the buyer will still be able to afford their mortgage repayments.

“There is no doubt that this is currently a buyers’ market, and it’s great that some of those who may not have been able to buy earlier are now getting the opportunity to invest in the property market here and own their home. Whichever end of the income scale you are on, if you are interested in buying in the UAE and have your down payment ready, now is a great time to do so,” says Boyd.

Mortgage refinancing has also become more attractive due to the lower rates, as well as the removal of the 3 percent early settlement fee penalty by the UAE Central Bank in October 2019.

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About Property Finder – www.propertyfinder.ae  

Property Finder is the leading property portal in the MENA region and Turkey that facilitates the house-hunting journey for both buyers and renters.

Founded in 2007, the website has evolved over the years as the go-to platform for developers, real estate brokerages, and house hunters to make informed decisions on all things real estate.

A UAE-born start-up, Property Finder has branched out of the country’s shores and operates in a total of seven markets, including Qatar, Bahrain, Saudi Arabia, Lebanon, Egypt, and Morocco, and has a significant stake in the second-largest property portal in Turkey, which has over 6 million monthly visitors and more than 18,000 real estate agents. 

US private equity firm General Atlantic led Property Finder’s latest round of investment of a total of $120 million in 2018. This is being used to hire further exceptional talent and investing in its technology and product capabilities.

The property portal employs over 450 employees globally, of which 204 people work out of its Dubai office, and generates over six million monthly visits as a Group.

In April 2019, Property Finder announced the acquisition of JRD Group, following an increased investment in Turkish portal Zingat.

In 2014, Property Finder acquired eSimsar.com, the top property portal in Saudi Arabia, while in 2013, the Group bought out realestate.com.lb, the number 1 property portal in Lebanon, and lastly, the acquisition of Selektimmo, a Moroccan portal, to pad out sarouty.ma, Property Finder’s Moroccan offering, in 2016.

For media enquiries, please contact Anna Lucas Southgate
anna@propertyfinder.ae   
+971 55 115 9971

© Press Release 2020