UAE mortgage market seen growing 220% in next 3 years

August 26, 2008
UAE mortgage market seen growing 220% in next 3 years

(ABU DHABI) The mortgage market of the oil-rich United Arab Emirates
(UAE) is projected to grow 220 per cent to 64 billion dirhams (S$24.7
billion) in the next three years, local newspaper Gulf News reported
yesterday.

According to a study by the Dubai-based real estate company Bonyan
International Investment Group, syariah-compliant house financing
will make up more than 60 per cent of the figure.

The UAE is viewed by global investors as the best market for capital
gains growth, and has been identified as the only Gulf country to
witness an increase in consumer confidence for the second half of
this year, Bonyan said.

'This can be attributed to the UAE's pioneering move to allow
foreigners to invest in local property, which created outstanding
opportunities for world-class developers to attract investors to the
country,' it noted.

Capital gains and income yields have been much higher in the UAE than
most other international property markets, with investors acquiring
investments with no personal income or capital gains taxes.

The UAE has seen a boom in its real estate sector since 2002, when
Dubai, the UAE's commercial and financial hub, gave foreign investors
the green light to buy property on a freehold basis.

The government of Dubai issued a 35-article mortgage law last Tuesday
in a bid to regulate the emirate's booming real estate market.