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Mortgage market seen surging 50 pc to Dh12b

Adel Al Shirawi, Chief Executive Officer of Tamweel, said with the property law giving a major boost to the real estate sector, Tamweel and other players in the market see widening scope to offer more mortgage products to suit a range of buyers. At present, 70 per cent of the mortgage market is being shared by the two major players, including Tamweel, he said.

With more clarity and a legal framework for property ownership now in place, the mortgage business is witnessing explosive growth as more players, including several leading banks, enter the sector.

Announcing the sale of apartments under a "lease to own scheme," which, Tamweel claims to result in 30 per cent cheaper lease payment compared to current market rental, Al Shirawi said although the landmark property law at its present form has some grey areas, it has brought in a lot more legal clarity in ownership and registration, making it easier to offer mortgages to a wider customer base comprising all nationalities.

He said Tamweel would continue to support this rapid growth and emphasise its position as a leading home finance company. "We have offered finance for properties of level one developers and have also assisted many secondary level developers to launch their properties in the market."

He pointed out that Tamweel was the first to service a UAE-mortgage backed securitsed fund worth $350 million that has won a AAA Moody’s & S&P rating in the US market.

On the listing of Tamweel on the stock market following an IPO subscription of 485 times, he said at the second shareholders meeting, a decision was made to convert it into a public joint stock company. "We are now waiting for the official formalities to be over to get listed."

Al Shirawi said under the new Tamweel scheme, buyers can avail the advantages of 'on-the-spot finance approval', which is final mortgage approval at time of buying the property. The apartments are located at International City. Developed by Nakheel, the units are expected to be ready for buyers to move in by August of 2006.

"With our deep understanding of market dynamics and more importantly our customer's needs, Tamweel continues to deliver first-to-market financing solutions that define the ultimate home-buying experience. Our lease to own product makes it simpler for customers to compare lease payments with annual rents instead of comparing mortgage profits rates."

Studio and one-bedroom apartments can be purchased at leased to own down payment of Dh29,000 and Dh40,900 respectively, which equates to one year rent.

Rental prices are favourably compared to many parts of Dubai like Bur Dubai, Karama, Ghusais and Al Nahda.