Dubai: Buying a house with cash is a long shot for most people, especially for low-income earners who have to constantly struggle with the rising cost of living. A lot of home buyers find themselves borrowing money from lenders to be able to finance a house purchase.
However, some individuals prefer cash payment over bank financing because they think it helps them save a lot on mortgage interest and other banking fees. And it seems the trend of buying a house outright is becoming more common in Dubai or UAE.
According to a new survey, more than half of Emiratis (54 per cent) who want to own a new flat or villa prefer cash or cheque payment when buying a piece of property in the UAE.
In comparison, only a small proportion of non-Emirati buyers, including Westerners (27 per cent), Arab expats (37 per cent) and Asians (39 per cent) can produce cash or cheque outright for a property payment.
Analysts said this only shows that investors still have so much confidence in the UAE’s property market.
“The study highlights continued confidence in the local real estate market with three-quarters of first time buyers preferring to purchase properties in the UAE,” said Kailash Nagdev, UAE managing director for YouGov, who conducted the study.
Ivana Stanisic, residential consultant at Better homes JBR branch said that unlike Emiratis, a high number of foreign buyers make their first property purchase in the UAE through financing.
“[Buyers who prefer cash payment do so] to avoid the interest from a mortgage and other banking fees as the intention is generally to keep the property for the longer term. However, with property investments that involve larger volumes, a mortage is more common,” Stanisic told Gulf News.
Property buyers, however, have been advised against spending all their savings on a house purchase as they could be missing out on other investments that could offer them higher returns. Investors who can afford to pay the cost of a property need to ensure they have enough money left that can support them during emergencies or when they lose their job… see more