Click here for the hard truth about the current job marketAugust 31, 2015 8:50
UAE mortgage searches rise by 35 per cent
CEO, Ambareen Musa, shares her views on Dubai’s property market
April 30, 2014 2:28 by kippreport
The UAE’s property market is booming again, with prospective buyers scrambling to get home loans before prices rise even higher. We have seen the impact on www.souqalmal.com with the number of customers searching for UAE mortgages through our site doubling in March.
In the first three months of the year, the number of UAE mortgage searches on Souqalmal.com increased by 35 per cent. A vast majority of home loan searches was done by expats looking to buy properties in Dubai. It isn’t hard to see why they are in a hurry to buy right now. Property prices in the city rose by 43 per cent last year, according to figures from real estate consultancy Cluttons, and they could rise by another 35 per cent to 40 per cent this year, according to a recent prediction by Sultan bin Meiren, director-general of the Dubai Land Department.
There is a widespread feeling that the current property market resurgence is built on more secure foundations than the last boom, which burst after the 2008 financial crisis. A key reason is that the UAE Central Bank has moved to prevent borrowers from overstretching themselves by insisting that they make higher minimum down payments to secure their dream homes.
Expats buying a property for less than AED5 million must now produce a minimum down payment of 25 per cent, rising to 35 per cent for properties that cost more than AED5m. To buy a second property, the minimum down payment is 40 per cent.
UAE nationals need a 20 per cent down payment for homes that cost less than AED5m, rising to 30 per cent for properties that cost more than AED5m and 30 per cent for any subsequent properties. Every buyer needs to put down a 50 per cent down payment for off-plan properties, regardless of whether they are an expat or a local.
These are sensible measures, but is everybody aware of them? Our data suggests that they are not. Many of our users are searching for home loans with down payments of between ten per cent and 20 per cent.
If you’re working out how much you can afford to spend on a property, you need to start from the right base point. So make sure your down payment meets the UAE’s stringent requirements.
The scramble to buy a property in Dubai looks set to continue. Happily, however, the process of finding a UAE mortgage is now a lot less stressful.
See more studies like this on Souqalmal.com