Interest rates for home loans in Abu Dhabi will be on a "continual drift downwards", according to Philip Ward, the chief executive of Abu Dhabi Finance.
Abu Dhabi mortgages on declining trend
Interest rates for home loans in Abu Dhabi will be on a "continual drift downwards", according to Philip Ward, the chief executive of Abu Dhabi Finance. High mortgage rates, which hover between 6.9 per cent and 9 per cent in the UAE, are seen as a hindrance to recovery in the property sector, which is still seen as a risk by most banks after a year of price declines and project setbacks because of liquidity shortages. Interest rates for mortgages provided by Abu Dhabi Finance, which was set up in November last year with Dh500 million (US$136.1m) in paid-up capital, have fallen since April from 8.5 per cent to 6.99 per cent, with further drops expected. "Part of responsible lending is making sure people don't enter into a commitment they can't afford," said Mr Ward. "If interest rates are sustainably lower, it makes home ownership more affordable for people, therefore we're able to offer more finance to more people. As soon as we have the ability to offer lower interest rates that's what we intend to do." Abu Dhabi Finance, which is a joint venture between Mubadala Development, Abu Dhabi Commercial Bank, Aldar Properties, Sorouh Real Estate and Tourism Development and Investment Company (TDIC), now provides mortgages for about 70 per cent of projects under construction in the capital.