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The Dubai Mortgage Market - November 2022

The Dubai property market has again remained robust with figures from Q3 showing no indication of deviation from its recent upward trajectory. Read our latest report from our experts on the ground.
Despite the UAE being pegged to the USD and thus largely in tandem with its fluctuations, UAE banks remain aggressive in their lending despite some of their lowest margins for some time. With buoyant Oil prices and the central bank seemingly flush with liquidity, Dubai residents are utilizing three year fixed rates of circa 5% with terms superior to alternate markets in Europe and the UK; averaging 6-8%.
With a single rate review left for the year dated mid December, we predict a softer bps increase and reductions, albeit minor, likely next year. Following this, with signs of subsiding inflation expected by the end of Q2 23, the smart money for buyers entering the mortgage market could well be via a variable rate.
 
Additionally a broader selection of banks are now offering to incorporate closing costs into the offered loan amount, minimizing buyers required cash output from approximately 27% to 22%. A significant saving for buyers providing valuable affordability with the additional amount paid long term. This being said, banks have become more diligent in the way of stress testing applicant finances with the average stress test rates rising from 3% to 7%. You may therefore be required to evaluate your existing liabilities before being granted approval.
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LTV rates of 80% are widely available for residents seeking mortgage amounts up to AED 5m. Residents looking for a loan greater than AED 5m require a minimum deposit amount of 30% while residents seeking a second mortgage require a deposit of no less than 40%.

Opportunities for non residents to enter the market via mortgage are also favorable. Despite a rather stringent qualification, products with an average LTV rate of 60% are available with certain banks offering up to 75%, subject of course to client profile.

With the increasingly dynamic pace of the market and significant supply shortage, time wasted on formalities can ultimately prove costly when securing your perfect home. Be sure to reach out to our Dubai sales team who hold a wealth of experience across the Emirate to optimally guide you in your property search. Additionally we can refer you to an expert mortgage broker, saving you time and money by identifying market leading terms across all lenders, tailor made to your criteria.

Adam Lewis

Head of sales

Dubai

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