Since the final quarter of 2011, green shoots of recovery have been sprouting in Dubai real estate sector. According to the Knight Frank Prime Global Cities Index, Dubai has recorded a 4% increase between December 2011 and March 2012. This has helped Dubai to achieve the status of top most real estate market in the list of best performing real estate sectors of the world.
Dubai properties in prime areas like Jumeirah Lake Towers, Dubai Marina and Downtown Dubai are performing quite well. On the other hand, properties in secondary locations are still fighting hard to bear the pressure of oversupply. Overall villa market is outperforming the apartment market in Dubai but the rental rates of apartments in many areas have also started to show small spurts of growth.
Conditions of Dubai property sector have improved to a significant extent but there is still another challenging months waiting ahead. Due to large number of supply scheduled to add to the market, experts are predicting the following year to be another challenging year for the sector. Despite that, these experts also believe that market is now at its lowest point and the year 2013 would definitely bring some cheerful news about the sector. To turn this prediction into reality, several steps are being taken to heal Dubai real estate sector.
100% Lending to Locals!
In order to promote Dubai property buying, banks are taking steps to offer 100% mortgage financing to the UAE nationals. The product named as ‘Bina’a’ which means ‘to build’, provides 100% home financing to the locals without any requirement of down payment. The renowned UAE lender, Emirates Islamic Bank, is offering this product under Shariah compliant mortgage scheme. The rates on these mortgages start from 4.99% which is quite economical as compared to rates charged during crises period.
Experts believe that it’s a positive move for Dubai real estate, since it would uplift the demand of property in Dubai.
Mortgages to foreigners!
Many experts believe that 100% financing to the locals would not bring any difference to Dubai real estate market, since locals only make 15% of the UAE. The demand can be increased if easy mortgages are provided to the foreigners who make more than 85% of the market. Owing to this fact, a number of banks in Dubai are now considering to offer easy mortgages to the foreigners eyeing Dubai real estate once again. There are almost 3 to 4 banks which are ready to provide mortgages to certain non-residents.
Competition and confidence among the banks in the UAE is rising and they know if they want to differentiate themselves, they must offer mortgages to foreigners.
Many landlords, who have been seeing their Dubai properties vacant for years, are now taking actions on their own to increase the demand of their properties. In order to lure the tenants, they are providing various incentives to them like free rent periods, no advance payments, lesser rents and no security fees. Besides that, flexible rental payments have also become the part of landlord’s incentives. According to a survey conducted on 3000 brokers, one cheque rental payments in Dubai don’t exist anymore.
Landlords are now renting out their properties with 2, 4, 6 or even more cheque payments which is making Dubai rental housing affordable for everyone.