Dubai mortgage values rose to 8 billion UAE dirhams ($2.18 billion) in the second quarter of 2009 from 7 billion dirhams in the first quarter as banks made lending more attractive, a property report said on Monday. The United Arab Emirates, of which Dubai is part, is seeing a decline in mortgage rates as market dynamics change, attracting more buyers and end-users, according to a report sponsored in part by a government body.
The increase in mortgage values was a result of "more banks offering competitive lending ratio" during the economic downturn, said the report, citing Ahmet Kayhan, chief executive of real estate data firm REIDIN.com. The study was conducted in partnership with the Dubai Land Department and its Real Estate Regulatory Authority. Dubai's once-booming real estate sector has been hit hard by the global financial crisis, but the pick-up in more mature markets such as the US and Britain, is starting to boost investor confidence.
House prices in the emirate are likely to stabilise by the fourth quarter, as a result of improving sentiment in global property markets, Colliers International said on August 3. The property market is in a "critical correction phase" with "growing need for regulation and transparency", the REIDIN.com report said, but added that governments were taking measures to bring about stabilisation in prices and improve investor confidence.
The report said 39 banks registered 1,365 mortgages in Dubai in the second quarter. Dubai's largest mortgage providers, Tamweel and rival Amlak Finance PJSC, have both had their shares suspended since November, as they undergo restructuring by the government and may be merged. Both firms have suffered from a sharp downturn in real estate prices in Dubai's property slump.
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