27 January 2017
Dubai: A Bridge Over Mortgaged Waters
An overview of transactional activity by sales and mortgage transactions reveals a two tiered market trajectory. Sales transactions have continued to decline, whereas mortgage activity is continued to experience growth. Mortgage activity as a percentage of sales activity accounts for 55%, doubling over the last 7 years. This new structure has shifted towards more mature markets such as US and UK, where the cash sales only account for 30-40% of all transactional activity.
Despite concerns being raised regarding central Bank curbs on mortgages that came into effect in 2014, mortgage demand across the board has increased steadily, indicating not only access to bank finance, but also a more mature price cycle in line with international markets.
We opine that the trend of mortgage financing will continue to increase steadily, despite headwinds such as the strong US Dollar and other exogenous factors, indicating resilient underlying demands.