After a dramatic correction in Dubai property prices over the last two quarters, could now be the right time to start buying again?
Let us take a look at some of the major factors behind the current market.
Firstly, the current economic outlook has had a huge impact globally with respect to an individual’s net worth, investment outlook, job security and overall confidence.
Secondly, the credit crunch led to a serious lack of liquidity in the banking sector, which impacted greatly on the availability of mortgage finance.
This double whammy led to a huge reduction in the number of property transactions, with far fewer buyers and sellers. The transactions that did go through were at deeply reduced prices.
This global phenomenon was exacerbated in Dubai which had seen massive growth in its fledgling real estate and mortgage markets in recent years.
So what’s changed?
Home Matters do not profess to have the answer to the world’s economic woes. However, we believe that there are signs out there that at very least, the worst may be over.
If you then look at the fundamentals, it is clear to many that the Gulf region will become of even greater importance to the global economy in the years ahead. Hence there is no reason that Dubai, with its key strategic location and transport links, diverse economy and existing (let alone planned) infrastructure, cannot continue to thrive as a regional powerhouse.
Having satisfied ourselves with the macro picture, let us take a closer look at the Dubai property market.
Yes, prices have come off dramatically, but they are now at levels that look like ‘good value’ especially to end users. In many cases prices are back to early 2006 levels, giving people the opportunity to buy in areas that they could only dream of a year ago.
Other factors which will give confidence to buyers and should offer support to house prices are – the reduced supply of new properties coming onto the market, as some projects have been delayed or cancelled; the increased regulation through RERA which has helped the process and given more confidence to buyers; the recent introduction of a new 6 month multi-entry Residence Visa for some home owners.
The perceived lack of mortgage finance has also been a major factor holding back new entrants, especially since the two biggest lenders, Tamweel and Amlak, effectively closed for new business at the end of last year. Other international lenders also scaled back their offerings.
However, various local banks have been active throughout this period and mortgage loans of up to 85% have regularly been agreed for our clients.
Furthermore, the other players are returning to the market including Tamweel and Amlak, initially as separate entities, with a view to potentially merging. In addition, HSBC has recently increased its maximum loan to value from 50% up to 75%. The fact that such a major global player wants to increase its exposure here at this time gives us great confidence.
Each week, we are seeing more lenders improving their terms and actively looking for new mortgage business. Equally, we have also seen a substantial increase in enquiries and new clients applying for mortgage pre-approvals over the last two and a half months. Indeed month on month enquiries are at an 18 month high.
Why Home Matters Mortgage Consultants?
So, if after reflection you decide that now is the time to look at buying, how can Home Matters assist?
We are independent mortgage consultants with a small but highly qualified and personable team.
There are many different mortgage lenders in UAE, each with their own specific criteria.
What is the best mortgage for you? It is not just a case of the best interest rate. At Home Matters, we take into account well over 20 different factors when recommending your mortgage solution.
Furthermore, we do not charge you a dirham, unless we get you a mortgage pre-approval. Performance based fees.
We will also support you throughout the whole process, from the minute you decide to buy, until you pick up the keys!
If you are interested in a free without obligation discussion, we would be delighted to hear from you. Please contact Jean-Luc Desbois, Managing Director; Mobile: 0504529283 Office: 04 3486717 or email: info@homematters.ae
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