New regional market research studies have revealed that the growing consumer confidence in the property market combined with a stabilising economy are expected to trigger demand for mortgages in the UAE.
Figures from a new YouGov survey, commissioned ahead of the 10th edition of Cityscape Abu Dhabi, show that 58% of UAE consumers choose mortgages and finance payments when considering current and future property investment.
This preference mirrors borrower confidence in the market as 42% of the survey respondents expect it to remain stable and 40% forecast its growth in the coming 12 months.
The findings suggest that lenders could benefit from loosening the lending restrictions in a bid to attract prospective investors, as regional and international developers prepare for Cityscape Abu Dhabi the UAE capital’s leading property event, running from 12-14 April at the Abu Dhabi National Exhibition Centre.
Held under the patronage of His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, Cityscape Abu Dhabi will provide investor and homebuyers an unrivalled insight into real estate sector as developers such as Bloom Properties, Eagle Hills and Golden Season Property Management are set to sell projects directly on the show floor.
YouGov’s MENASA Managing Director, Kailash Nagdev said: “Our study indicates that consumers are confident in the future of the real estate market in Abu Dhabi, with most (82%) believing that real estate prices will stabilize or grow in the next 12 months.
“It also shows, however, that consumers are being cautiously optimistic about their intention to invest so it will be important for the industry to provide wider access to market intelligence to re-enforce the investment opportunities that lie ahead.
“As developers continue to attract investments through deferred payment plans, the ability to fund investments through mortgage or finance deals still remains a major driving factor for consumers.”
Meanwhile, the new Ventures ONSITE study from March this year confirms the GCC real estate market is likely to remain resilient and register robust growth by the end of 2016 and beyond, despite the recent fluctuating in oil price. With upcoming projects leading Abu Dhabi Vision 2030, such as the US$ 1 billion Louvre Abu Dhabi in the heart of the Saadiyat Cultural District, real estate and wider business activity is expected to be rejuvenated.
As the capital’s population rises, the need to build affordable housing for an increasing workforce is gaining ground across the emirate and the government has been considering the implementation of quotas for affordable homes in new developments, an idea that could soon become reality.
The total stock of residential units is expected to increase to 256,000 units by the end of 2016 and Abu Dhabi’s move to amend building and infrastructure regulations in response to severe storm damage underscores the maturing of the industry.
The increasing end-users demand for affordable houses combined with the consumers’ preference for mortgage or finance payments for property investment opens up opportunities for lenders and banks, provided they offer competitive interest rates and flexible financing methods ahead of the demand curve.
For property developers, the YouGov report reaffirms the belief that location is crucial when end-users decide on investing in the real estate market.
Properties near retail shopping malls are the most attractive and in demand (37%), followed by those close to public transport (36%), grocery stores (30%), mosques (27%) and hospitals (27%), according to the 1,118 residents in the UAE who were surveyed.