In 2021, end-users dominated the Dubai property market – Dh127.82 billion was a record for mortgage transactions, clearly indicating most buyers were buying homes to meet their own needs. In addition to the low-interest rates on home loans, the January to end March period proved to be the best quarter for mortgage-backed property sales in Dubai.
There were 127.82 billion Dh worth of mortgage deals in 2021, a 26 percent increase from 2017.
Also, developers played a role in getting buyers to take out mortgages last year. “The reduction in down payment requirements for first-time buyers – coupled with the general low rate environment – made buying much more achievable,” said Mohamed Kaswani, Managing Director at Mortgage Finder. “With fixed rates available from as little as 1.99 percent and the leading rate sitting at just 2.39 percent – compared to 2019 where the leading product rate was 3.75 percent – buyers were able to take advantage of excellent mortgage offers to get onto the housing ladder.”
Slashing key levels
UAE Central Bank will reduce the down payment requirement for first-time buyers by 5 percent in 2020, to 20 percent for non-UAE nationals and 15 percent for UAE nationals. A change in the loan-to-value ratio “made a real difference to some first-time buyers”, since 83 percent of its mortgage transactions between the first- and third-quarters were for first-time buyers.
Moreover, December showed homeowners were making strategic decisions ahead of the expected rise in mortgage rates starting in March (if the US Federal Reserve decides to hike rates and UAE regulator follows suit).
Within the mortgage industry, December is typically a “quieter” month. However, there were 1,178 mortgage registrations last month with a value of Dh10.08 billion.