Dubai: At the end of the third quarter of this year, the number of mortgage transactions in Dubai has exceeded the number recorded for the same period over the past three years, which signifies the market’s record breaking performance.
In Dubai, as of the end of September, government data shows that there were 68 percent more mortgages registered than in the same period of 2020 and 71 percent higher than in 2019.
The third quarter of 2020 was a particularly active time for the mortgage industry, as banks and other financial sector stakeholders reopened for business, allowing mortgage transactions that had been delayed during the lockdown to proceed as usual. Although mortgage transactions spiked after the lockdown in Q3 2020, data from the government shows that they increased by 22 percent in Q3 2021.
“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. Now with Expo opening we’re even more excited to see what happens as we enter the final quarter of the year,” said Warren Philliskirk, Director at Mortgage Finder.
Reduced down payment
Data compiled by Mortgage Finder, an independent mortgage brokerage and part of the Property Finder Group, shows that first-time buyers have been particularly active, accounting for 83 per cent of mortgage transactions. In 2020, the UAE Central Bank will reduce the down payment requirement for first-time buyers by 5%, bringing it down to 20% for non-UAE nationals and 15% for UAE nationals. It is encouraging to see first-time buyers take advantage of this down payment reduction, along with the low interest rates which are currently prevalent in the UAE.
Villas in high demand
Mortgage Finder clients purchased 63 percent of their mortgages on villas and townhouses, 35 percent on apartments, and 2 percent on land, commercial and other properties.
Jumeirah Golf Estates, Arabian Ranches, and The Springs were the most popular villa communities.
As buyers opt for larger spaces with private gardens, pool areas and more, villas and townhouses have consistently been more popular with Mortgage Finder clients over the past year. It is a trend that has continued from 2020 following the lockdown.
In some prime communities, there is a shortage of supply due to increased demand this year, leading to property price increases, especially for villas/townhouses. Mortgage Finder has seen this increase in property prices translate into a 43 percent increase in loan amounts compared to September last year.