Abu Dhabi Finance to develop affordable housing productsBack
Abu Dhabi Finance (ADF), one of the UAE’s premier providers of innovative, flexible and transparent residential and commercial mortgage products to the local market, is currently in discussions with some of the major property developers in the UAE to develop innovative mortgage products for ‘affordable housing’. With the overall cost of living in parts of the UAE expected to rise, unstable rent environments and wage inflation stagnating in some sectors, the availability of affordable housing stock and viable financing for this type of housing is becoming more important than ever.
Affordable loans already represent a large part of ADF’s business, with 30% of ADF’s portfolio in residential property being lent on mortgage loans less than AED 1m. As the amount of affordable housing stock has slowly started to rise we have seen enquiries for equivalent mortgages rise with it.
For many people buying a property makes better financial sense than renting, particularly with a fixed term mortgage, as monthly payments tend to be lower, it protects against rent hikes, and ultimately a property is an investment which may appreciate over time. ADF already is committed to providing finance for affordable housing and currently has minimum income entry criterion is only AED 10,000 per month.
The demand for affordable housing from middle income families, particularly in Abu Dhabi, is huge. Abu Dhabi is a very attractive place to live, but the cost of housing, particularly rentals, remains high and affordable housing stock for sale is relatively low. Equally there is currently a gap in the market in terms of viable financing for affordable housing. However this is changing, there is a lot of new housing stock in the pipeline for the coming years representing a huge potential market for lenders. While this does not represent a change of strategic direction for ADF, we are in discussions with real estate developers and are well placed continue to deliver quality mortgage products to this segment of the market as it opens up.Chief Executive Officer of ADF, Chris Taylor