Mortgage products in the UAE have evolved to become more transparent in recent times, with customised offerings now the norm.
Considering location plays a large part in judging the value of your real estate investment, select areas in the UAE are showing improvement. “We are seeing positive growth in select locations in the UAE. Emaar, Nakheel-style operations, developments along Shaikh Zayed Road, Downtown, Old Town and Burj Khalifa areas are doing very well. Then you have Meadows and Arabian Ranches, which are positive. In some locations, it appears that property values have bottomed out. It won’t go lower but may go up slightly, which is encouraging people to opt for mortgages,” says Tom Smith, Executive Vice-President & Group Head of Retail Banking, United Arab Bank (UAB).
Improved service
More banks now confirm that retail clients for mortgages are endusers rather than investors. “The focus is more on end-users and less on investment properties. Prices have been corrected and now people prefer to buy property rather than rent it,” says Suvo Sarkar, General Manager — Retail Banking, Emirates NBD.
Better service and customisation are by-products of the stringent know your consumer (KYC) norms in this consumer-centric environment. “We are more flexible on lending criteria. We now work with a number of mortgage brokers and property consultants and we feel that the access to banks is better than before. Processing time has improved. In a week’s time we can give our decision on the mortgage,” says Sarkar.
While some banks, such as the UAB, only offer mortgages on ready properties, others such as Emirates NBD consider off-plan properties too. “Most properties are being resold by developers or first buyers. The percentage of off-plan has dropped. We have both approved developers and pre-approved developments to make things easier,” says Sarkar.
With the UAE retaining its safe haven status, it has become an attractive destination for non-resident property buyers. While most banks are yet to cater to this market, some financial institutions are open to providing mortgages to non-residents. Standard Chartered Bank has recently launched a new mortgage facility that offers non-residents a customised approach to avail mortgage loans of up to $5 million (about Dh18.3 million).
Fixed rates
“With customers in mind, the mortgage process has been made easier as a result of the bank having developed two of the UAE’s first-in-market assessment criteria specifically tailored to this affluent and high net worth sector,” says Stephen Richards Evans, Regional Head of Standard Chartered Private Bank, Europe, Middle East, Africa and Americas, Standard Chartered Bank.
The facility is available on new or existing properties, providing they were built by one of the bank’s registered developers.
According to Smith, certainty is priced in reaction to the current economic scenario. “Now all banks offer fixed-rate mortgages, for one, three or five years,” says Smith.
