During 2021, the mortgage lending market showed record growth rates. The pre-pandemic indicators have already been overcome, and the previous historical peaks set in 2017 have also been beaten.
According to Dubai Land Department, in 2021 the volume of mortgage funds exceeded the records of 2017 by 26%. The number of transactions in 2021 turned out to be more than the results of 2019 and 2020 combined.
In many ways, two factors played a positive role in this sector of the market:
- The general growth of Dubai's popularity as a global real estate market against the background of COVID-19.
- The government initiatives, such as reducing the amount of the deposit on the loan by 5% — up to 20% for residents of the country and 15% for UAE citizens.
These 5% turned out to be enough to attract a huge number of people to this instrument, who appeared on the market for the first time, both as investors and ordinary buyers. We are talking about 82% of all people who took out a mortgage in the past year.
However, it is noted that 94% of this category were already residents of the UAE, that is, we are talking about people who had previously only rented housing. Non-residents of the country accounted for only 6%.
Nevertheless, the range of countries whose citizens have turned to lending is quite large. There are more than 60 countries on the list, but the leadership falls on the citizens of Australia, France and Great Britain, India and South Africa.
According to the surveys, 91% of people said that they took out a mortgage to purchase housing for their own needs.
Financial position of borrowers
The number of people with low incomes has increased. Thus, the number of borrowers with incomes below USD 5,445 per month increased by 44%. In 2020, they accounted for 9% of all loans issued, and in 2021 - already 13%.
This increase is attributed to the fact that access to housing has become easier for many people.
Most of those who turned to mortgage lending are in the category with earnings from USD 11,000 to USD 16,000 per month. They accounted for 37% of loans.
