September sees substantial Dh8b worth of transactions being facilitated
23/10/2014 05:13 AST
If you do a Google search on the word “mortgages”, it will throw up over 6.1 million results in 0.30 seconds. I am sure a few years ago, during the peak of recession, the same word would have scared people and banks away.
Things have evolved since and the word has again entered the positive trajectory. Are you interested in buying a property? If yes, are you a cash buyer or are you planning to approach banks to fund part of your property?
Many residents of the UAE who are currently renting a house are looking to convert that as a loan instalment and own a property in the bargain.
There are people who are opting to stay at cheaper locations, but still own properties in more upmarket areas. They are enjoying attractive rental income which in turn covers part of their loan instalment.
However, not everyone can afford to own a property and the main hurdle obviously would be finance. A bank or mortgage lender typically offers you a large portion of the needed investment, typically 75-80 per cent of the price of the property, which is to be paid back, with interest, over a stipulated time frame.
Many a prospective buyer goes to their existing banks for a loan, but are unware that they might get a better deal by comparing interest rates and other benefits. The tough part is arranging for a mortgage which can take a while.
Prospective home owners should actually set a mortgage in place before starting to look for the right property deal. If you have the mortgage approval in principle, then you have a picture of the borrowed amount and, of course, your property price range. At this juncture, one should start hunting for the dream house.
Encouraging sign
Dubai’s real estate market would always remain an investment destination as the market has seen a rebound in demand and prices caused by a surge of global investor interest and thereby an increased inflow of cash. With the Expo 2020 preparations and its safe haven status, Dubai continues to be a key destination of choice for global and regional investors.
This is definitely a positive and encouraging sign for the mortgage market. The momentum has improved in recent quarters and mortgage-based transactions reached close to Dh8 billion in September. This is a good sign for all stakeholders, whether it is a buyer, a developer or the bank who is lending. This helps grow the industry further.
Most of the established areas in New Dubai areas such as Downtown, Dubai Marina, Business Bay and Jumeirah Lake Towers have attractive mortgages on apartments. Top localities for villa mortgages are gated communities like Arabian Ranches, The Springs and Meadows, Emirates Hills and also the Palm. The commercial sector is also not far behind and has contributed towards the growth in mortgage transactions. Office mortgage transactions were seen to be high in Business Bay, JLT and Downtown areas in recent quarters. This goes to show that people are willing to move into projects and properties that are complete and could offer them better rental returns in the short term and value appreciation in the long run.
The confidence shown by investors in Dubai based properties is encouraging. The quality and quantity of mortgage transactions indicate that the local market is unaffected by global market dynamics. These encouraging signs provide discerning investors with the right level of confidence to own a property.
The position of Dubai has changed with the emirate becoming a global city in all aspects. With strict regulations, the country’s real estate market today stands on a firm footing. Given this scenario, the mortgage sector will definitely have a vital role in shaping the economy.
Gulf News
Please wait...
