“We’ve been very candid on the need for more competitive mortgage
Banks across the UAE are slashing mortgage rates as they edge back into the property market, amid signs house prices may be finding a floor after a two-year rollercoaster. Te easing of the interbank lending rate has helped bolster liquidity in the market, and banks are increasingly looking to find ways to grow their loan books.
products to attract buyers,” said Paul Middleton, executive director of sales and marketing, Sorouh. “Tat’s not just in terms of lower interest rates but in loan-to-value ratios. It doesn’t help when it’s hard to get mortgages for people.
“What we’ve seen is that there is a lot of latent demand in Abu Dhabi’s
market from second-generation expatriates. People do aspire to buy but it is, for a lot of people, not yet possible.” Sorouh launched a rent-to-own offer for its Sun Tower project in Abu Dhabi last year, which generated more than 3,000 leads for the developer, Middleton said. “RTO has proved hugely popular; that’s why we know there is a lot of demand in the market. Some 30 percent of the leases we manage are rent-to-own. People want to use rent to build equity in their properties.” Mortgage lending may not yet be booming in the UAE’s housing market, but the cuts in rates remain a rare break for investors. Going forward, any significant recovery in the real estate landscape will need be underpinned by continuing economic stability and growth. “Like all markets you need a convergence of situations,” said Middleton.
“One feeds off the other – if banks are more confident, people are more confident and the economy starts to grow. Te worst is behind the property market now” l
APRIL 2012 I CITYSCAPE I 37
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