Why Dubai Tenants are becoming Buyers?
UAE Renters are becoming First-time Buyers.
The CEO of Lootah Real Estate Development said on Tuesday there has been an increasing number of Dubai residents shifting from renters to homeowners as a host of factors are making it more attractive to become a first-time buyer.
Lootah cited attractive property prices, lower mortgage rates, higher loan to value ratio, long-term confidence in Dubai, and the work-from-home set up as the five top reasons why more people are getting on the property ladder.
Saleh Abdullah Lootah said the current property prices, which are 30 percent lower than the market peak in 2014, are very attractive and offer a great opportunity for real estate ownership.
In addition, banks have been showing more willingness to lend as reflected in the active mortgage market in the UAE.
“On the one hand, we see more buyers willing to buy and on the other, we see more lenders willing to lend,” he said.
Russell Owen, COO of Lootah, added: “This growing market transaction is driven by professionals and families seeking affordable homes that are conducive both for residential and working lifestyle whilst building equity.”
He added that another factor is the increased loan-to-value ratio which makes it much easier for people to buy their first house, thanks to the Central Bank of the UAE’s initiative to support the mortgage market.
Following the outbreak of the COVID-19 pandemic, CBUAE issued a decree which makes it possible for expats to borrow up to 80 percent of their property purchase price and up to 85 percent for UAE nationals, an increase from the previous 75 percent and 80 percent, respectively. This means the down payment requirement has been reduced significantly.
While these factors encourage people to buy rather than rent, they will not do it without their clear confidence in Dubai as a long-term investment destination, Lootah said.
“The growth in the number of expatriates who are interested in real estate investments signifies that they are becoming more confident in the market. It’s not just because of the lower prices and interest rates, it’s also because people believe in the Dubai story,” he noted.
Lootah added that the work-from-home trend - a consequence of the Covid-19 restrictions - is also helping fuel the demand from first-time buyers, as renters opt to invest the money that they are saving into buying their own homes. He cited data from online job service FlexJobs that showed that people who are working from home can save as much as AED 14,000 a year.
Lootah Real Estate Development is the real estate development arm of Lootah Holding and has so far delivered over 1,000 units, with many more planned for the future.
(Source: Arabian Business)
