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Sharp increase in mortgage loans’ number indicates the maturity of Dubai housing market

13.03.2018

It’s official: mortgage sales rule. 55 per cent of home buyers in Dubai now take a loan. Read more to find, who can apply for a mortgage in Dubai and what are your chances.

Dubai real estate market experts have revealed that, in 2018, the pendulum swung sharply from the majority of in-cash sales transactions to most transactions using loans. And it’s great, for this is just another sign in favor of the overall market’s maturity.

Actually, up to 55 per cent of home buyers are now financing their home purchases through mortgage loans, with more and more potential buyers considering to take advantage of low borrowing costs to buy a property.

According to REIDIN data, back in 2012, the share of the home-loan-involved purchase transactions was less than 20 per cent. This shift indicates a more stable market, but leaves individuals vulnerable to interest rate hikes.

However, there are some tips for potential home owners considering borrowing in 2018:

  1. Firstly, home ownership is definitely set to become more expensive. UAE mortgage rates are tied to the Emirates Interbank Offer Rate (Eibor), which has been stable for years but is set for incremental increases as the United States Federal Reserve raises interest rates.
  2. But, the good news is that there is always an option of a locked fixed rate. Fixed rates provide borrowers with the comfort of fixed payments during the defined rate period, regardless of any changes made to Eibor.
  3. And lastly, concerning off-plan purchase borrowings, one should be aware that bank financing for the off-plan units is restricted with a maximum of 50 per cent financing available. But it all actually depends on specific payment schemes and developments partnering with banks for payment plans. There are payment plans of 25 per cent payable under construction and 75 per cent at completion, with this final payment available to be paid via mortgage.

According to statistics from the UAE Ministry of Economy, the average annual income of expatriate families in the UAE is about AED 200,000. But mortgages in Dubai are now available even to families with an annual income of AED 120,000 (AED 10 000 per month)!

This became possible due to the introduction of new innovative mortgage products by some local banks.

  • Who really can apply for a mortgage? If you have a good credit history in the UAE (no big loans), then you can expect to get a mortgage loan for up to 25 years, taking into account age limits up to 65 years.
  • Can emigrants apply for a mortgage in the UAE? Yes they can.

Today, with an average income of AED 25,000 to AED 35,000, you can afford to pay a loan for a property worth between AED 1.5 and AED 2 million.

For example, when buying a USD 270,000 1 bedroom apartment, you can pay only about USD 80,000 as down payment, and the remaining amount (70% and even up to 80%) is due to be paid during new 3 to 25 years.

As for areas, Jumeirah Village Circle (JVC), Al Furjan and Dubai South are the most affordable areas to buy property in using mortgage, according to Property Monitor. And with a salary of AED 15,000 you can even opt for a Business Bay apartment or a residence in the Dubai Sports City.

And if the average down payment drops to 15 per cent, real estate mortgage loans can become even more affordable.

To learn more about the specific housing loan offerings for expatriates in Dubai, please, feel free to contact IMEX Real Estate specialists. We will pick up the best-priced offer for you and consult on all mortgage-related items.

Mob. Tel. (Oleg Lavrik): +971 502528188 (Viber, WhatsApp, Telegram, IMO)

Office 2502, Marina Plaza, Dubai Marina, Dubai, UAE

Office Tel. +971 4 395 1911

Email: oleg@imexre.com

Skype: resident69

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