The number of homes changing hands in Dubai may be slipping, but the mortgage market is in rude health, having doubled in size over the past seven years, according to a report released yesterday.
The Reidin/Global Capital Partners report states that mortgages as a percentage of sales activity have now reached 55 per cent, which it said represented a structural shift towards more mature markets, such as the US and UK, where cash sales account only for 30 to 40 per cent of transactions. In 2012, the ratio of mortgages-to-sales activity in Dubai was below 20 per cent.
Sameer Lakhani, the managing director of research consultancy Global Capital Partners, said that the greater reliance on mortgages to finance home loans may be a contributing factor to the lower levels of transactions, as they take longer to complete.
He also said that deals involving mortgages were less volatile than cash-only deals.
“So obviously you will see a lower velocity of transactions, but these are more stable and less speculative in nature,” he said.
Overall property transaction value in Dubai fell by nearly 3 per cent to Dh259 billion last year from Dh267bn in 2015, and the number of transactions fell to 60,595 last year compared with 63,719 deals a year earlier, Dubai Land Department figures show.
The Reidin report showed that villas are much more highly leveraged than apartments, with the number of mortgages taken out on villa properties last year exceeding the total value of villas sold.
Mr Lakhani said that this provided evidence that those living in larger homes had started to refinance to extract equity from properties that may have appreciated in value since their initial purchase.
“That’s a typical, normal phenomenon that you see in the West,” he said. “People top up, people refinance.”
It also showed that banks no longer had a preference for “government-sponsored” developers like Nakheel, Emaar and Dubai Properties, with the number of loans secured against properties built by private developers exceeding those linked to the government for the first time last year. The weight of money also shifted from established communities like Dubai Marina and Jumeirah Lakes Towers to newer, mid-income areas like Jumeirah Village Circle and International Media Production Zone.
Mr Lakhani said the overall increase in home loans showed that there is finance available in the market for those looking to buy their own homes, despite the concern expressed by a number of consultancies about available liquidity in the market.
“There was a time when banks were reluctant, but that has passed,” Mr Lakhani said. “In 2008, when the market tanked and we had our first boom/bust cycle, at that time banks were not willing to lend at all. There was a huge contraction in liquidity. This time around you’re not seeing it. Banks are stepping up to the fore,” he said.
A report by Phidar Advisory last week cited liquidity constraints as a factors that continues to place downwards pressure on Dubai house prices, which it expects to continue falling this year as a result of the strong dollar, to which the dirham is pegged, and the fact that a “jobless” recovery is not creating demand to fill a growing supply pipeline.
It said that any interest rate hikes in the US “should increase the cost of debt in Dubai, which increases development and investment costs … In a market already struggling with liquidity constraints, rising interest rates will be a deterrent, unless yields adjust upwards, which, even with stable rents, would push down property prices,” it said.
Phidar said liquidity constraints are likely to ease this year as a result of bond issuances to plug fiscal deficits of neighbouring states like Saudi Arabia – a key source market for Dubai property buyers.
According to broker CBRE’s Dubai Annual Market Update, the volume of sale transactions in Dubai’s residential market dropped by about 13 per cent last year to 41,776 compared with 48,000 in 2015.
mfahy@thenational.ae
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'Outclassed in Kuwait'
Taleb Alrefai,
HBKU Press
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COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
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NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
The%20specs
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Common OCD symptoms and how they manifest
Checking: the obsession or thoughts focus on some harm coming from things not being as they should, which usually centre around the theme of safety. For example, the obsession is “the building will burn down”, therefore the compulsion is checking that the oven is switched off.
Contamination: the obsession is focused on the presence of germs, dirt or harmful bacteria and how this will impact the person and/or their loved ones. For example, the obsession is “the floor is dirty; me and my family will get sick and die”, the compulsion is repetitive cleaning.
Orderliness: the obsession is a fear of sitting with uncomfortable feelings, or to prevent harm coming to oneself or others. Objectively there appears to be no logical link between the obsession and compulsion. For example,” I won’t feel right if the jars aren’t lined up” or “harm will come to my family if I don’t line up all the jars”, so the compulsion is therefore lining up the jars.
Intrusive thoughts: the intrusive thought is usually highly distressing and repetitive. Common examples may include thoughts of perpetrating violence towards others, harming others, or questions over one’s character or deeds, usually in conflict with the person’s true values. An example would be: “I think I might hurt my family”, which in turn leads to the compulsion of avoiding social gatherings.
Hoarding: the intrusive thought is the overvaluing of objects or possessions, while the compulsion is stashing or hoarding these items and refusing to let them go. For example, “this newspaper may come in useful one day”, therefore, the compulsion is hoarding newspapers instead of discarding them the next day.
Source: Dr Robert Chandler, clinical psychologist at Lighthouse Arabia
if you go
The flights
Emirates have direct flights from Dubai to Glasgow from Dh3,115. Alternatively, if you want to see a bit of Edinburgh first, then you can fly there direct with Etihad from Abu Dhabi.
The hotel
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Located in the heart of Mackintosh's Glasgow, the Dakota Deluxe is perhaps the most refined hotel anywhere in the city. Doubles from Dh850
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Events and tours
There are various Mackintosh specific events throughout 2018 – for more details and to see a map of his surviving designs see glasgowmackintosh.com
For walking tours focussing on the Glasgow Style, see the website of the Glasgow School of Art.
More information
For ideas on planning a trip to Scotland, visit www.visitscotland.com
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
The specs
Engine: 3.8-litre, twin-turbo V8
Transmission: eight-speed automatic
Power: 582bhp
Torque: 730Nm
Price: Dh649,000
On sale: now
The%20specs
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Scream%20VI
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Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
THE BIO
Age: 30
Favourite book: The Power of Habit
Favourite quote: "The world is full of good people, if you cannot find one, be one"
Favourite exercise: The snatch
Favourite colour: Blue
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
Biog
Mr Kandhari is legally authorised to conduct marriages in the gurdwara
He has officiated weddings of Sikhs and people of different faiths from Malaysia, Sri Lanka, Russia, the US and Canada
Father of two sons, grandfather of six
Plays golf once a week
Enjoys trying new holiday destinations with his wife and family
Walks for an hour every morning
Completed a Bachelor of Commerce degree in Loyola College, Chennai, India
2019 is a milestone because he completes 50 years in business
UAE v Gibraltar
What: International friendly
When: 7pm kick off
Where: Rugby Park, Dubai Sports City
Admission: Free
Online: The match will be broadcast live on Dubai Exiles’ Facebook page
UAE squad: Lucas Waddington (Dubai Exiles), Gio Fourie (Exiles), Craig Nutt (Abu Dhabi Harlequins), Phil Brady (Harlequins), Daniel Perry (Dubai Hurricanes), Esekaia Dranibota (Harlequins), Matt Mills (Exiles), Jaen Botes (Exiles), Kristian Stinson (Exiles), Murray Reason (Abu Dhabi Saracens), Dave Knight (Hurricanes), Ross Samson (Jebel Ali Dragons), DuRandt Gerber (Exiles), Saki Naisau (Dragons), Andrew Powell (Hurricanes), Emosi Vacanau (Harlequins), Niko Volavola (Dragons), Matt Richards (Dragons), Luke Stevenson (Harlequins), Josh Ives (Dubai Sports City Eagles), Sean Stevens (Saracens), Thinus Steyn (Exiles)
Our legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
More on animal trafficking
How to wear a kandura
Dos
- Wear the right fabric for the right season and occasion
- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
Don’ts
- Wear hamdania for work, always wear a ghutra and agal
- Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
Wonka
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