Lootah sees increase in Dubai renters shifting to homeowners
Attractive property prices, lower mortgage rates, higher loan to value ratio, and more have spurred interest in owning homes
UAE-headquartered real estate developer Lootah Real Estate Development (Lootah) has noticed an increasing number of Dubai residents shifting from renters to homeowners as a host of factors are making it more attractive for UAE residents to become first-time buyers.
The firm 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 Top 5 reasons for people getting onto the property ladder.
Attractive property prices and lower mortgage rates
The chief executive offer of Lootah, Saleh Abdullah Lootah, said that the current property prices, which are 30% 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,” Lootah said.
Meanwhile, the COO of Lootah, Russell Owen, said: “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.”
One of the properties in demand is Lootah’s Living Garden development, which is located in the sub-urban neighbourhood of Jumeirah Village Circle.
With properties starting from $115,700 (AED425,000), residents can enjoy living in a community that is just 15 minutes away from Dubai International Airport (DXB) and Dubai Downtown, and 10 minutes away from the Al Maktoum International Airport, Jebel Ali, and the Expo 2020 site.
Living Garden offers residential apartments that include an external façade with aluminium vertical elements and glass windows, porcelain tiles, and counter tops.
Higher loan-to-value ratio
Following the outbreak of the COVID-19 pandemic, The UAE Central Bank has issued a decree which makes it possible for expats to borrow up to 80% of their property purchase price and up to 85% for UAE nationals. This means the down payment requirement has been reduced significantly.
“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,” Owen added.
Whilst 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 added: “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.”
Lootah added that the work-from-home trend 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.
With this, they can finally get an abode where they can attain a poised form of living perfect both for their leisure and career activities. Data from online job service FlexJobs showed that people who are working from home can save as much as $3,800 (AED14,000) a year.
“Living Gardens allows residents to attain both a homely vibe, yet also a conducive area for work, thanks to its quiet location, rooms, and amenities, including a gym, covered parking, roof landscaping and water features,” Lootah added.
Owen concluded: “There are so many intangible benefits in home ownership that is not just related to financial and monetary reasons such as the sense of stability, being part of a community, and the ultimate pride of ownership.”
Source: Construction Week, Arup Oomen, https://www.constructionweekonline.com/business/266734-lootah-sees-increase-in-dubai-renters-shifting-to-homeowners