Dubai: Low-interest rates boost mortgage transactions in 2021

Market grows 68 per cent compared to last year, 71 per cent more than 2019

Image used for illustrative purpose.

Image used for illustrative purpose.

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The mortgage market in Dubai has grown at an exponential rate in the first three quarters of 2021, growing by 68 per cent compared to last year and 71 per cent more than in 2019, according to the latest official data revealed on Sunday.

Data released by mortgage Finder, an independent mortgage consultancy in the UAE and part of the Property Finder Group, on Sunday revealed that Q3 2020 was a notably active period in the mortgage industry. This came as banks and other stakeholders involved in the mortgage process reopened for business, allowing mortgage transactions that had been placed on hold during lockdown to proceed as normal again.

“It has been a very busy year, with the total number of mortgages registered in Dubai during the first three quarters already overtaking the total number registered in the whole of 2020. This is so exciting to see as more buyers are getting onto the housing ladder,” said Warren Philliskirk, director at Mortgage Finder.

“Now with Expo opening, we’re even more excited to see what happens as we enter the final quarter of the year,” he added.

Low interest rates are a major factor attracting new buyers to the local property market as 83 per cent of mortgage transactions were conducted by people who were purchasing property for the first time in the UAE.

In 2020, the UAE Central Bank reduced the down payment requirement for first-time buyers in the UAE by five per cent, taking it to 20 per cent for non-UAE nationals and 15 per cent for nationals. It is positive to see first-time buyers take advantage of this down payment reduction and also of the record low-interest rate environment currently being experienced in the UAE.

Dubai’s real estate market has seen records being broken this year in terms of the value and volume of transactions as foreign investors flocked to the local market to cash in on the attractive prices. As a result, the property sector reached a new milestone in the third quarter of 2021, as it became the best third quarter ever in terms of transaction value in the history of the emirate’s real estate sector, reaching Dh42.35 billion. In September. At the same time, real estate transactions crossed the Dh100 billion mark in September due to phenomenal growth in monthly sales, thanks to the presence of a good number of international investors in the market.

Villa/townhouse properties accounted for 63 per cent of mortgage purchases while apartments made up 35 per cent, and the remaining 2 per cent was attributed to land, commercial and other property types. The most popular villa communities were Jumeirah Golf Estates, Arabian Ranches and The Springs.


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