While the property market appears to be simultaneously booming and crashing, depending on which statistic you follow, or which article you read, one source reports a remarkable increase in the property market arena. compareit4me.com, a comparison site has confirmed that mortgage enquiries have rocketed from January 2015 to April 2016.
According to their most recent figures, while public interest in home finance products has been unpredictable since the site’s launch in April 2014, from January 2016 onwards, enquiries into mortgages have been steadily rising across all income brackets, with exceptional growth seen in March and April.
Interestingly, the specific salary brackets that have shown the most growth are those earning between AED8,000 and AED19,999. When compared against the average number of enquiries of the previous 22 months, enquiries from people earning between AED8,000 and AED11,999 tripled in March and April. Similarly, the AED12,000 to AED14,999 bracket saw growth of 240 percent in March and 260 percent in April, while the AED15,000 to AED19,999 bracket showed an increase of 96 percent in March and 150 percent in April.
compareit4me.com CEO Jon Richards says, “Confidence in the property market has been turbulent since Q4 of last year. The UAE’s new mortgage cap rules, announced in October 2015, teamed with the cascading effects of the drop in crude oil prices certainly had an impact on the general public’s attitude to real estate here in the UAE. Added to this, the strong US dollar – and therefore dirham – and the subsequent retraction of attention from foreign investors all culminated together to create falling housing prices, resulting in hesitancy in the market.”
However, a few months later, and the situation has taken another turn; as often happens when property prices crash, UAE residents are wondering whether it might be a good time to invest, while they can capitalise on the current low prices. Richards continues, “As well as the lower prices impact of the economical shifts and the new mortgage rules, there has been a sharp increase in the number of property projects completing over the past 12 months, with new residential areas popping up regularly and plans for many more over the next few years. Also the surge in availability of more affordable housing projects seems to have activated pockets of residents who were previously confined to renting. I believe this could explain the spikes we have seen in mortgage enquiries from mid-level salary earners as these new projects are opening the door to them being able to step onto the UAE’s property ladder.”
There are more buyers in the market now than the beginning of the year and this is due to the general consensus that we are at the lowest level of pricing and that the market will soon recover and prices of property will start to increase again. There is a positive shift in activity – which ultimately means we should see an increase in prices follow. Additionally, new developments targeting end user buyers and lower salary brackets is definitely drawing more buyers into the market now. There is a trend towards more affordable housing projects and for people with salaries AED10k and below to start to being interested in owning they’re own homes rather than paying rent.
There is also a rise in buyer enquires since March of this year. Tenants are taking advantage of more relaxed mortgage products and extended payment plans by developers in order to soften the initial outlay and get their foot on the property ladder. Off plan has continued to do well with high quality but affordable prices. As we see the population continuing to increase in Dubai, more and more people are looking at areas other than Dubai Marina and Downtown.
Earlier this year, the Director-General of Dubai Land Department (DLD) Sultan Butti Bin Mejren was quoted as saying that the DLD expects real estate transactions to reach AED300 billion in 2016, which would be a 12 percent increase on last year’s total value of transactions of AED267 billion.