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Driving growth of the mortgage sector is the strong performance of the UAE real estate market. |
The housing mortgage assets are expected to double, courtesy the robust growth of UAE's real estate market, to Dh64 billion by 2011 from Dh32 billion in 2007, according to estimates by leading mortgage providers in the country.
"The key factor that is driving growth of the mortgage sector is the strong performance of the real estate market. Real estate in turn is buoyed by many factors such as strong economic performance, political and social stability, steady population growth, negative real interest rates, and higher tourism receipts," said Hany Hussain, head of research, and Hany Seif, sector analyst, at Damac Capital International.
The companies that command the greatest share of the mortgage market in the UAE are Tamweel (34 per cent) and Amlak (29 per cent), both Dubai-based real estate developers. In the UAE, mortgage lending represented 4.7 per cent in 2007 whereas the average for emerging markets mortgage is 15 to 30 per cent of GDP, according to Moody's Investors Service. The remaining 37 per cent of the real estate market is divided among 23 mortgage providers, primarily commercial banks.
