Increased demand for mortgages in 2020

The mortgage industry saw many changes in 2020, all of which were positive for borrowers and potential buyers. These changes made getting a mortgage and buying property in Dubai and the UAE in general, easier and more achievable.

During the first two of months of 2020, here at Mortgage Finder, we saw a good level of demand from potential borrowers, however, once the pandemic affected the UAE this quickly fell as we all adjusted to a new way of living during lockdown.

Dubai and the UAE experienced a strict and effective lockdown, but this meant that mortgage transactions and applications slowed significantly during this time. Once lockdown restrictions were reduced and then slowly lifted we saw a rapid increase in mortgage enquiries and transactions once again. Between the first and second half of 2020, we recorded a 13% increase in direct enquiries and a 40% increase in mortgage transactions (completed mortgages). We also recorded an 39% increase in direct enquiries between 2019 and 2020, which was a very positive sign despite the quieter period experienced during lockdown.

We believe a range of factors has contributed to this uplift in demand for home finance. The first, and perhaps most significant, being the 5% reduction in down payment requirements for expats and UAE nationals - taking the down payment requirement by expats to 20% from 25% and 15% from 20% for UAE nationals. The second factor to note is the current low interest environment. Mortgage interest rates are now at the lowest they have been for a number of years, making home finance cheaper and more accessible for potential buyers. There has never been a better time in recent years to get a mortgage and buy in the UAE.

Author:
Ian Vaughan
Senior Mortgage Consultant at Mortgage Finder
31st January 2021