Islamic lender Tamweel on Tuesday said UAE home finance transactions in 2012 were likely to be 30 percent higher than in 2011, adding that it estimates that the home finance market will surpass AED8bn ($2.17bn) this year.
It also said it has seen a 26 percent increase in home finance applications in the first half of 2012 as compared to the same period last year.
Tamweel said in a statement that prices of UAE real estate that it has financed over the past 18 months has increased by between 10-15 percent.
The lender reported that between January 2011 and June 2012 the sale price of properties in its portfolio increased by 10-15 percent on average, with appreciation most acute in mature and completed developments in Dubai and Abu Dhabi.
The company said it witnessed price increases in excess of 15 percent in Downtown Dubai, Arabian Ranches, Victory Heights, Emirates Hills, The Meadows, The Lakes, JBR, Palm Jumeirah, Dubai Marina, Jumeirah Village, Dubai Silicon Oasis, The Views, Business Bay and DIFC Area.
It also saw 10-15 percent increases in Abu Dhabi's Al Reef Villas, Golf Gardens, and Raha Gardens.
"From when we first originated new business in 2004, to the height of the financial crisis in 2008, through to the present day, Tamweel has observed the mortgage cycle in the UAE from a unique vantage point," said Varun Sood, acting CEO of Tamweel.
"We have witnessed an upward trend in UAE property prices over the last 18 months, especially in high-quality properties in mature and completed developments."
Sood added: "The increase in home finance transactions and the availability of home finance from different providers have contributed to today's healthy market.
"It is important to remember that home finance in the UAE is still only a decade old, meaning enormous untapped potential still exists for the industry."
In July, Tamweel posted a 33 percent drop in second-quarter profit as revenue fell and costs rose, the Dubai-based firm's second straight quarterly profit fall.
Tamweel, majority owned by Dubai Islamic Bank, made a net profit of AED18.6m ($5.1m) in the three months to June 30, down from AED27.7m in the prior-year period. The firm's first-quarter profit also fell.