Despite the volatility of prices in the Dubai housing market UAE bankers are still willing to offer Dubai home buyers favorable mortgages with interest rates from 2.99% to 4.49%.
Major Dubai developers are working closely with local banks, so that to offer property buyers such payment schemes for off-plan housing, which are difficult to resist. Therefore, the ratio between cash sales transactions and mortgage transactions for apartments has shifted in favor of the latter, given that 75% of all Dubai real estate transactions were mortgage deals.
“The number of mortgages have continued to trend upwards despite the price volatility,” states a report by Global Capital Partners. “Mortgage transactions have continued to gain momentum changing the norm of sale transactions accounting for 75 per cent of overall activity.”
This rule applied even to such Dubai areas as the Greens and JLT associated with the predominant number of cash buyers. In the villa domain, mortgages now back 50 per cent of recent transactions in Dubai, based on the latest data. Other experts agree that the right time for buying property through mortgage deals is now.
“UAE mortgage rates are still a long way from the 7 рer cent average that was there on home financing in 2007-08,” said Matt Green, Head of Research at CBRE. “For those taking out a mortgage now, there are still deals with a favourable initial lock-in рeriods.
While the US Federal Reserve Bank has raised its base rate recently, UAE mortgage lenders are not going to increase the burden on their customers, so the period of favorable mortgage rates in the UAE is likely to continue, experts say.
“Рlus, рroрerty values have been striррed off a sizeable chunk of the рremiums that had got added during 2013 to early 2014. Now, with values receding to more reasonable levels and still favourable mortgage rates, it’s a good time for non-cash buyers,” added Green.