First-time buyers accounted for 82% of mortgage transactions during 2021

94% of borrowers to buy real estate in the country are residents

Villas and "townhouses" recorded more demand compared to apartments.

archival

A recent report on mortgage transactions in 2021 stated that 94% of borrowers to purchase a property in the country were residents, and that 90% of those preferred fixed-rate mortgage options.

The report, which "Emirates Today" obtained a copy of, indicated that buyers for the first time accounted for 82% of mortgage transactions during the past year, which reflects the positive impact of the state's initiatives to encourage entry into the sector, most notably the Central Bank's decision to reduce the value of the mortgage. The advance payment to residents, pointing out that the borrowings were made by buyers of 60 nationalities, mostly from Australia, France, India, South Africa and the United Kingdom.

Mortgage

In detail, Mortgage Finder, the mortgage advisory company affiliated with Property Finder, issued the second edition of the UAE mortgage market report, which includes details of mortgage transaction data recorded by the company during 2021.

The report indicated that the mortgage sector witnessed a record performance during 2021, as data from the Dubai Land Department indicated an increase in the value of mortgage transactions by 26%, compared to the high rates recorded during 2017.

He stressed that the launch of the Central Bank in March 2020 an initiative to reduce the value of the first payment to buyers, for the first time in the country, to 20% for residents, and 15% for citizens, contributed to the growth of the mortgage movement, and buyers for the first time accounted for 82% of mortgage transactions during the past year This reflects the ongoing positive impact of this initiative.

Borrowers ratio

The report indicated that residents of the UAE constituted 94% of the borrowers, compared to only 6% of non-residents.

Mortgage Finder data included borrowings from buyers from more than 60 countries around the world, most of whom were from Australia, France, India, South Africa and the United Kingdom, and the purposes of residency in the property were the main reason for buying by 91% of buyers.

The company's report recorded an increase in the proportion of middle-income borrowers by 44%, especially those whose monthly salaries do not exceed 20 thousand dirhams.

This segment represented 9% of the total borrowers for the year 2020, and increased to 13% during the year 2021.

salary bracket

Most of the borrowers (37%) last year, whose salaries ranged between 41 thousand and 60 thousand dirhams per month.

The report attributed the increase in the number of borrowers with incomes less than 20 thousand dirhams per month to two main factors, which contributed to enhancing the possibility of buying homes for this segment, namely: the increase in the ratio of the mortgage loan to the value of the property by 5% launched by the Central Bank, in addition to the general decrease in prices Interest during previous years, which has led to the decline in monthly mortgage payments to levels closer to the lease payments.

The report pointed out that the villas and townhouses sector recorded a greater demand compared to apartments, as this trend spread widely in the market throughout 2021, bringing the percentage of villas and townhouses buyers to 64%, compared to 36% for apartment buyers. .

Mortgage interest rates maintained stable levels during 2021, to continue at their record low rates, in parallel with interest rates and competitive products offered by banks.

The interbank interest rates in the UAE (EIBOR) for three months also maintained their stable levels throughout 2021, after declining by about 80% since the beginning of 2020.

One- and three-year fixed-rate mortgages were the buyers' preferred options.

• 60 nationalities belonging to investors in Dubai real estate, mostly from Australia, France, India, South Africa and the United Kingdom.

• 26% increase in mortgage transactions during 2021.

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