The construction boom in the UAE is fuelling a major surge in its mortgage market as investors take advantage of new incentives to buy real estate, according to a new survey.
The mortgage market, currently worth Dh 20 billion ($5.4bn), is estimated to more than triple to Dh64bn within the next three years alone, it adds.
Investors are becoming increasingly reliant on mortgages to purchase property, says Chris Dommett, CEO of leading independent mortgage adviser, John Charcol Dubai.
More than 71 per cent of UAE investors require a mortgage to finance their property purchase, according to the survey.
This remarkable demand can be attributed to a number of factors - the local mortgage market is maturing and both seasoned and first-time investors are taking advantage of attractive mortgage incentives to buy real estate,” explains Dommett.
“Rising real estate prices are encouraging property buyers to leverage their investments, while low interest rates continue to fuel demand. These incentives, combined with favourable new laws relating to real estate ownership, have enabled the UAE’s mortgage market to truly thrive.”
Previously, investors were likely to use their own funds or release equity on other properties in their home country due to the limited availability of local finance, he pointed out.
But the landscape of the UAE’s mortgage market has now transformed with a number of new lenders entering the market to tap into rising demand, including banks and financial institutions that are working with an increasingly wider range of developers.
“Despite the options now available to property buyers, obtaining a mortgage can still be a complex undertaking, and a good mortgage broker can not only help identify the best deal, but facilitate the entire process,” added Dommett.
John Charcol Dubai, an independent mortgage franchise operation, was launched in 2007 and currently works closely with the country’s leading financial institutions, property developers, and estate agents to bring speed and transparency to the UAE’s property buying process. – Trade Arabia News Service