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Abu Dhabi’s mortgage market stands to benefit from best practice responsible lending, said Philip Ward, CEO of Abu Dhabi Finance at Cityscape Abu Dhabi. The mortgage finance company, which was launched last year by some of Abu Dhabi’s major investment, real estate and finance companies, has in the first few days of Cityscape seen a steady stream of enquiries at its stand.
Abu Dhabi Finance provides financing for up to 85 per cent of the value of property and the minimum salary requirement starts from AED 10,000 per month. Mr Ward said:
“It is about responsible lending. We believe in looking at the individual applicant’s circumstances. That means taking into consideration his or her other expenses, such as dependants, school fees, and other loans, their assets, the size of their deposit, and any other income. For some people, borrowing 85 per cent of the property’s value might not be appropriate as they would struggle to make the monthly payments. As a responsible lender, we would not put anybody in a situation where they cannot comfortably service their mortgage.”
Speaking about the prospect of a real estate regulatory body, Mr Ward said:
“When you think about it, buying a home is the single largest purchase most people make in their lives. It is a serious decision. The people they turn to for advice and guidance have to be professionally trained and qualified to make recommendations. Bringing in regulation can only benefit the industry as it encourages best practice and professionalism.”
Abu Dhabi Finance currently provides mortgage finance for properties developed by four of the major developers in Abu Dhabi; Aldar, Sorouh, TDIC and Capitala, which account for up to two thirds of the property market in the Emirate, and it is in negotiations with several other developers to cover the remaining third.
Ward concludes:
“There is enormous demand for real estate in Abu Dhabi and consequently the Abu Dhabi mortgage market is in good health with a number of active lenders in the market. We have seen great demand for mortgage finance at Abu Dhabi Finance. If the EIBOR rate remains at its current level or declines further we will look at potentially reducing our interest rates, which could stimulate even more demand.”
Abu Dhabi Finance offers flexible mortgages with a wide range of benefits, including loan-to-value ratios of up to 85 per cent, loan terms of between 3 and 30 years, flexible repayment methods and debt service ratios of up to 55 per cent.
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