Dubai: Eviction notices push some tenants to buy their home
A new report shows that 30 percent of recent mortgage buyers in Dubai made their purchase because landlords issued them eviction notices. These tenants moved towards purchasing property because it proved to be a better option than finding another rental apartment or villa.
Dubai homeowners maintain the right to send eviction notices to tenants when they plan to sell their properties or intend to occupy them themselves.
According to our survey 29 percent of buyers decided to purchase properties after receiving eviction notices from landlords who intended to sell their properties. The 2024 Mortgage Finder Report observed that escalating rental prices drove numerous tenants toward purchasing homes for greater financial security.
Long-term residency in the UAE drove 65 per cent of buyers to purchase properties.
The contrast between the average four per cent mortgage rates and the six per cent rental yields makes ownership financially advantageous. Monthly mortgage payments tend to be less than similar rental expenses which allows homeowners to accumulate equity instead of paying increasing rent amounts. This report states that stable financing options make buying homes a strategic financial decision for long-term security beyond emotional reasons.
The Mortgage Finder Report revealed that first-time home purchasers represent 74 percent of all borrowers based on their research and data from the Dubai Land Department (DLD). The segment of experienced buyers represents 26 percent of the market and their main focus is investment.
Key insights
The largest group of borrowers (41 per cent) make between Dh30-60,000 and another 26 per cent earn no more than Dh30,000. Residents represent 95 per cent of the mortgage market's driving force. Mortgage loans typically amount to Dh1.7 million and borrowers usually repay them over 21 years.
Mortgage transactions have shown steady growth above ready sales transactions over the last three-year period. The report showed that mortgage transactions expanded by 29 per cent in 2023 while ready sales transactions grew by 21 per cent.
Getting a mortgage
Home ownership represents a "wise choice" because it builds equity while rent payments do not contribute to property ownership.
A new property owner should make an initial investment that typically amounts to 26 percent which consists of a 20 percent down payment and approximately six percent for transaction fees.
Financial institutions no longer provide funding for DLD and brokers' fees.
According to Youssef people interested in buying property should study the real value of their potential purchase. The buyer needs to consider both community service charges and utility fees as part of their property expenses.
While mortgage acquisition in Dubai follows a simple process banks set individual requirements that are influenced by the applicant's financial profile.
When applicants fulfill the salary requirements and submit needed documentation, numerous banks can provide immediate mortgage pre-approval which helps buyers advance rapidly in their home purchase journey.
Banks apply different criteria when evaluating mortgage applicants apart from salary which may include factors like how long you have been employed or your current debt levels. You should evaluate mortgage offers from different banks to find the option that best satisfies your requirements.
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