UAE property finance industry maturing fast (page 1 of 2)

In a series of interviews conducted with consumers who have used mortgages to finance their homes and industry professionals, researchers from DSL Exhibitions - organizers of the Resale & Rental Property Show (R&R Show), due to be held on the 13th and 14th of April at the Crowne Plaza, Dubai - asked respondents to answer a set of questions to gauge their opinions on the property finance industry in the UAE. R&R Show - Dubai's oldest and only show focusing on the secondary market also features the Property Finance Seminar & Exhibition this year.

"Visitors to the R&R show this year have another great attraction to look forward to where they can get all the property finance advise from some of the best professionals in the country," said Tessa Morris, Marketing Director at DSL Exhibitions. "We conducted this opinion survey to understand the issues that concern the consumers so we could offer this opinion snapshot to our exhibitors."

The opinion survey:

1. Are there enough choices available in the UAE property finance industry in terms of choice of mortgage providers? What are your predictions for short term and long term?
Most of the respondents (42 out of a total of 56 surveyed) said that in terms of number of companies, UAE presents a competitive scenario.

Media reports have already estimated the size of the property mortgage market to touch AED 17.5 billion in 2007, with the home finance sector itself registering a 64% growth, up from AED 7 billion last year to an expected figure of AED 11.5 billion this year. Bassam Ghani, who financed his villa in the Springs through Amlak said: "I bought my villa directly from Emaar, and since they recommended Amlak, I chose them. But I did shop around since almost all banks now offer property finance products."

Mohana Rao, International Business Development Director at Ideal Management Essentials (IME), who have organized the Property Finance Seminar & Exhibition at the R&R this year, said: "In the short term all banks will offer property finance services - however in the long run the financial institutions will begin to design tailor-made products to better suit their customer's requirements such as payments terms, tenures, minimum salary requirement, down payments, charges and so on."

Abu Dhabi Commercial Bank, Emirates Islamic Bank, Mashreqbank, Standard Chartered, Capital Hill Brokers and The National Bank of Dubai are all offering mortgage facilities for customers interested in buying residential property in Dubai and buy to let accommodation as well. A majority of respondents also agreed that in the short term property finance companies will jostle for market share but over the longer term, increased competition will result in providers creating more competitively priced mortgage products and keeping interest rates as low as possible, thereby creating a stable market.

2. Do you think the mortgages are designed to be affordable for the middle segment of the consumers?
A 100% majority agreed that with prices of property where they are right now, a middle income family just cannot afford to get a mortgage in Dubai at the moment. Adilane Sakane, who lives in a tower in Dubai Marina elaborated: "A basic 2-bedroom apartment costs AED 2 million right now. Over 25 years, the minimum reducing interest mortgage will cost at least another 4 million.