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-Al Mazaya Report: All-time-high mortgages driven by stimulus packages, attractive prices

 

-Increased mortgage contracts reflective of myriad investment opportunities

The UAE real estate market has been able to cope with the Gulf region’s changing economic landscape and the successive developments in the global economy.

The resilience of the UAE real estate market and its ability to retain value and expertise plays a significant role in this respect. The forces of supply and demand and the traded prices indicate that the UAE market has reached a level of maturity that helps it cope with the surrounding conditions and survive the besetting challenges.

The real estate market in the current period tends to favour more deals, which has reflected positively on the actual values and volumes of registered mortgages and incentivised official authorities to develop tools and working mechanisms to suit the digitalisation trend that serves all parties and maintain their rights. This ultimately improves the competitiveness of local markets and helps attracts more FDI flows.

The weekly report of Al Mazaya Holding highlighted the significant evolution of mortgage operations in the UAE, which is often equal to or exceeds international standards in this field. The tools and mechanisms of mortgage registration are subject to streamlining packages of development and modernisation that resulted in unprecedented levels of rapid completion and protection of rights and values. This has reflected in the boom now witnessed in the real estate market, as well as the banking sector, which has all the tools to accomplish mortgages without delay and in accordance with the highest world standards in this domain. Efforts are now focused on further development and modernisation of the relevant infrastructure, to levels where the buyer can complete mortgage transactions without having to go to the local government and within a short period of time of a maximum of one week.

Al Mazaya weekly report pointed out that current industry data reflects a significant increase in mortgage applications in the UAE real estate market during the first quarter of the current year by at least 78%. This indicates the presence of a large number of investors looking for good investment opportunities and evidences the availability of effective financial solutions that cater for a large segment of real estate investors and meet their housing needs in the light of the current low prices, which come as a result of external pressures, a fact which proves that homeownership is more attainable today.

Al Mazaya Holding’s report indicates that the financial and economic stimulus packages launched recently significantly leverage the real estate market despite the pressures surrounding it.

Al Mazaya said that the mortgage contracts conducted and expected to be completed by the end of the year reflected the volume of activity and good opportunities available in the markets, which come as a result of the availability of long-term financing channels and affordable real estate prices which investors can benefit from. Prices for real estate sales in major markets have fallen by up to 12 per cent year-on-year and rentals by 7-9 per cent recently, explained the report.

The weekly report, within this context, said that the value of real estate transactions executed in the real estate market in Dubai during the first half of this year increased by 8 per cent to reach about AED119 billion. The report attributed this momentum to the facilitating laws of ownership and financial and economic incentives targeting the real estate market, which, said the report, started to bear fruit to the extent that non-resident investors in the real estate sector increased to 44 per cent of the total number of investors. Industry data show a good pace of activity, contrary to previous forecasts that indicated sharper declines in the real estate sector. In the meantime, it has become difficult to anticipate jumbo leaps, with the market expected to achieve gradual growth.

Al Mazaya Holding said that the balance in prices secured recently has resulted in fair values for all parties and aborted a potential real estate and mortgage crisis in the UAE in general and the Dubai market in particular. Within this context, the increasing scale of property deals and mortgages results in growing loans by various funding channels, which shows that all parties are in a state of permanent activity, with the macroeconomic system being the biggest beneficiary.

On the other hand, off-plan sales, which have become more regulated by flexible laws, are now more attractive to investors as well as end-users and more responsive to the needs of target groups in terms of payment schedules and down payments, which almost have become zero in harmony with  market conditions and which consequently encourage many to shift from Rent to Own.