UAE mortgage applications raised by 80%
UAE Mortgage applications in UAE raised by 78 % over the year to April and enquirers rose by 59 % in the same period, end users are increasingly seeking long-term solutions for their housing requirements, according to data from consultancy Mortgage Finder.
The average amount of a home loan, however, decreased from AED 1.67 million in May 2018 to AED 1.31 million in the same month this year, reflecting the relatively weak property market, said the consultancy, which is part of the real estate portal Property Finder Group.
“We have seen a shift from an investor-led market to an owner-occupied market, with more end users buying to live in the property,” said Chris Schutrups, managing director of Mortgage Finder. “This is likely due to the downward shift in prices which has made home ownership more affordable and achievable.”
Real estate prices in the UAE have remained weak since 2015, according to a report last year from Property Finder.
Data from real estate consultancy ValuStrat finds Dubai residential capital sales values decreased by 12.4 per cent and rental values by 9 per cent for the first quarter of this year, when compared to last year. In Abu Dhabi, sales values were on average 12.2 per cent lower than the same quarter last year and rents were down by 6.9 per cent year-on-year. Analysts, however, see a recovery soon as investors continue to take advantage of lower pricing and the economy picks up on the back of stimulus measures by the government.
In more than 80 per cent of the enquiries analysed by Mortgage Finder, buyers opted for a fixed interest rate, an unchanging rate that applies for the entire term of the loan or part of the term. However, with recent predictions from the US Federal Reserve that there may be rate cuts this year, Mr Schutrups said, “we are seeing a few more sophisticated buyers opt for lower margin variable rates”.
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