Mortgage transactions in Dubai in 2021 are boosted by low interest rates

The total number of mortgages registered in Dubai during the first three quarters of the year already exceeds the total number registered in the whole of 2020.

The mortgage market in Dubai has shown an exponential growth in the first three quarters of 2021, increasing by 68 percent compared to last year and 71 percent compared to 2019.

Latest data show, that Q3 2020 was a notably active period in the mortgage industry. The uplift in activity began when banks and other stakeholders involved in the mortgage process reopened for business, allowing mortgage transactions that had been placed on hold during lockdown to proceed as normal again.

This year turned out to be a very busy one: the total number of mortgages registered in Dubai during the first three quarters already overtakes the total number registered in the whole of 2020 and there's still a whole quarter ahead. And now, with Expo 2020 opening it is expected to achieve a highly successful performance.

Low interest rates are a major factor attracting new buyers to the Dubai real estate market. 83 percent of mortgage transactions this year were conducted by customers purchasing property for the first time in the UAE.

In 2020, the UAE Central Bank reduced the down payment requirement for customers buying property in the UAE for the first time. Thus, down payment is now 15 percent for UAE nationals and 20 percent for non-UAE nationals. It is positive to see first-time buyers take advantage of the down payment reduction as well as the current record low-interest rate environment in the country.

Dubai’s real estate market has broken records several times this year in terms of the value and volume of transactions as foreign investors flocked to the emirate to cash in on the attractive prices. As a result, the property sector reached a new milestone in Q3 2021 that became the best third quarter ever in terms of transaction value in the history of Dubai's real estate, reaching USD 11.5 billion in September. Also in September, the value of transactions for the year to date reached USD 27 billion, due to phenomenal growth in monthly sales.

Villa/townhouse properties accounted for 63 percent of mortgage purchases, apartments made up 35 percent and the remaining 2 percent was for land, commercial and other property types. The most popular villa communities were Jumeirah Golf Estates, Arabian Ranches and The Springs.