With ready homes being the most sought after by buyers in Dubai last year, mortgage-backed deals had its best run to date. Image Credit: Gulf News Archive

Dubai: End-users were driving the Dubai property market in 2021 – record mortgage transactions of Dh127.82 billion clearly suggest most buyers were buying homes for their own needs. All-time lows on home financing rates was another tonic spurring end-users to buy, with January to end March period proving the best quarter ever for Dubai’s mortgage-backed property sales.

The previous highest number of mortgage deals was in 2017, and the 2021 tally of Dh127.82 billion is 26 per cent up on that year. 

Developers too played their part in getting buyers to take on mortgages last year. “The reduction in down payment requirements for first-time buyers - coupled with the general low rate environment - made buying much more achievable,” said Mohamed Kaswani, Managing Director at Mortgage Finder. “With fixed rates available from as little as 1.99 per cent and the leading rate sitting at just 2.39 per cent - compared to 2019 where the leading product rate was 3.75 per cent - buyers were able to take advantage of excellent mortgage offers to get onto the housing ladder.”

Slashing key levels

In 2020, the UAE Central Bank reduced the down payment requirement for first-time buyers in the UAE by 5 percent, taking it to 20 per cent for non-UAE nationals and 15 per cent for nationals. The change in loan-to-value ratios "made a real difference to some first-time buyers", with 83 per cent of its mortgage transactions between the first- and third quarters being for first-time buyers.

Record territory
In all, last year there were 19,520 mortgage-led deals in Dubai's property market. This is 51 per cent increase on 2020 volumes.

The Dh127.82 billion recorded on mortgages was 46 per cent higher in value over 2020's tally.

Also, December provided trends that showed homeowners were taking strategic decisions ahead of the expected rise in mortgage rates from March onwards (if the US Federal Reserve decides to hike rates and UAE regulator follows suit.)

December typically has been a “quieter” month within the mortgage industry. Yet, there were 1,178 mortgage registrations last month, with a value of Dh10.08 billion.