Mortgages comprise 55% of Dubai real estate salesby Jumana Abdel-Razzaq on Mar 20, 2017
Mortgages currently comprise 55% of real estate sales activity in Dubai, more than doubling over the past seven years, according to a report by Reidin/Global Capital Partners.
The report findings indicate a maturing market in the emirate, with mortgage activity reflecting those of bigger markets such as the US and UK which see mortgages account for 60-70% of real estate transactions.
Last year revealed a paradigm shift towards more private developer projects accounting for mortgage activity than those of sovereign-backed industry peers.
This is a contrast from a couple of years ago, where the ratio of mortgages-to-sales activity in Dubai was below 20% in 2012.
This gives an indication of an increasing willingness of banks to lend to private sector developments as well as confidence amongst buyers to purchase a property from a private developer.
Damac Properties recently announced that its in-house mortgage department has so far facilitated home financing worth $163m (AED600m) for hundreds of units across the UAE, the only developer that provides an in-house mortgage service in the region.
With this division, the developer is aiming to provide a booster for the UAE property market, where first-time millennial buyers who are salaried have “ample opportunity to jump on the property ladder”, said Niall McLoughlin, senior vice president, Damac Properties.