Mortgage deals take a dive

16.04.2015
The subdued mortgage activity has been brought on by multiple factors, such as the high loan-to-value set for off-plan launches, the general softness in buying activity experienced since the second-half of 2014, and banks’ continued reluctance to go full out with their home financing offers.

Home financing transactions have dropped, according to a Gulf News report.

With mortgages falling to the levels of March 2013, there is certainly a change in activity, according to consultancy Cavendish maxwell in the launch issue of its ‘Property Monitor’ report.

The subdued mortgage activity has been brought on by multiple factors, such as the high loan-to-value (a maximum of 50 per cent) set for off-plan launches, the general softness in buying activity experienced since the second-half of 2014, and banks’ continued reluctance to go full out with their home financing offers. An option to set this right could be for the UAE ‘Central Bank change LTVs to simulate the market in run up to the Expo (2020)’, according to the Cavendish Maxwell report.

“Whether the market is soft or not, the fact is that there is still lots of appetite for buying property in Dubai at the right price and right location,” said Zafer Taher, CEO of G&Co., the developer which has ongoing projects at Meydan City, in a recent interview. “It would make the sales cycle for off-plan launches a lot smoother if prospective buyers could ensure a mortgage facility from a bank, or at the least, even a pre-approval.

“But without such approvals, the developer may have to extend incentives such as lower down payments to convince a buyer to get in now.”

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