Enquiries for mortgage for lesser-priced properties in the U.A.E. has seen an increase by almost 59 percent between the year 2018 and 2019 because of lower property prices and also favourable interest rates. This trend is probably going to continue this year ensuing a potential upsurge in real estate transactions and a good time for doing business in U.A.E. in this sector.
“Marked by Dubai expo 2020 has the potential to become a very fruitful and interesting year with glaring achievements. Dubai will see a surge in tourist arrivals with almost 25 million expected to visit, increasing the investors’ appetite for the city’s real estate offerings,” Al Hammadi said.
As per the real estate visions and data platforms, Dubai has recorded a 20 percent rise in the volume of sales transactions of registered property in the year 2019 compared to 34,961 transactions recorded in 2018. There were over 45,000 units completed in 2019, which was the highest number of units that were completed in one year in the last five years.
“While we expect that the current supply will continue to put further pressure on prices, we will definitely witness a good year in terms of sales transactions,” he added.
Data also shows that there’s an 11 percent upsurge in the number of enquiries from clients who are earning a salary between 10,000 U.A.E. dirhams ($2,722) to about 12,000 U.A.E. dirhams per month between the year 2018 and 2019. The average property price that people in this income bracket consider is approximately 795,000 U.A.E. dirhams. Interest rate cuts in the year 2019 were surely a reassurance for probable real estate investors.
The U.A.E. Central Bank has slashed interest rates almost three times in the last year to be in tandem with the US Federal Reserve. In the year 2018, the average mortgage interest rate was about 3.99 percent. However, in last few months, it has decreased notably, with some rates going as low as 2.75 percent fixed for one year.
Therefore, when banks calculate affordability and perform stress tests today, those people who might not have passed these tests earlier, now have a better probability of doing so because a lower property prices and better interest rates result in lower monthly mortgage repayments.
This is definitely a buyers’ market because of the new real estate laws and regulations, and it’s good that some people who couldn’t buy previously have got a chance to invest in the property market and own their home now. So, if you are interested in buying your own home in the U.A.E. and can arrange for the down payment, then it is the best time to do so.