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Abu Dhabi's property market hots up
Mortgage lender Tamweel expects to get 30 percent of revenues from mortgage business in Abu Dhabi, which is expected to grow by 3 billion dirhams ($817 million) this year, the firm's chief executive said on Tuesday.
Abu Dhabi's real estate sector has taken off since the emirate, which holds 90 percent of the UAE's oil reserves, passed a law allowing expatriates to buy properties on 99-year leasehold basis in August, 2005.
Some 9 billion dirhams worth of real estate will be sold this year, creating about 3 billion in mortgage opportunities, Ali al-Shirawi said.
"Abu Dhabi developers will start selling properties for the first time this year," he told Reuters.
Foreigners can buy at new developments including Aldar Properties' $4.5 billion Raha Beach residential commercial development and Sorouh Real Estate's Al Reem Island off the coast of the Gulf emirate.
Dubai, which opened its property sector to foreigners in 2002 before passing a freehold property law last year, accounted for 90 percent of mortgage lending in 2006, Shirawi said.
"We are witnessing a shift. About 30 percent of mortgage lending will be in Abu Dhabi this year," he said.
Tamweel and mortgage lender Amlak, 40-percent owned subsidiary of Emaar Properties, equally share about 70 percent of the country's mortgage finance market, Shirawi said.
Both lenders comply with Islamic ban on lending on interest, instead buying properties from borrowers and agreeing on a repayments schedule that includes a profit for the lender.
"We would like to maintain our market share in Abu Dhabi," he said.
The UAE's total mortgage market should grow 52.5 percent this year to 17.5 billion dirhams, Shirawi added.
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