The real estate market in the UAE is expected to grow this year as well, according to ADIB.

The real estate market in the UAE will continue to grow this year against the backdrop of the country's economic development, which will further stimulate the growth of the mortgage lending business at Abu Dhabi Islamic Bank, said its Chief Financial Officer.

“I think we have not yet reached the peak,” said Mohamed Abdel Bari in an interview with The National. “The demand and supply and market activity indicate that there will be a lot more movement.”

He also stated that, in his opinion, there may be a slowdown in the growth of the real estate market next year, but positive trends will continue this year.

The real estate market in the UAE continues to recover after the slowdown caused by the coronavirus, thanks to government initiatives, rising oil prices, and other economic support measures.

According to the latest data from the Department of Municipalities and Transport, there were 5,472 real estate transactions worth 27.9 billion dirhams ($7.6 billion) registered in Abu Dhabi in the first quarter of 2023. The volume of transactions more than doubled over the three-month period, and the number of transactions, including property sales and mortgage agreements, increased by 66%. The value of property sales more than tripled to 16.2 billion dirhams, while mortgage transactions rose by 70% to 11.7 billion dirhams.

In Dubai, the commercial and tourist hub of the Middle East, residential property prices rose at the fastest rate since 2014 in June, as demand continued to grow. The average cost of residential units in the emirate increased by 16.9% compared to the same period last year, according to data from consulting firm CBRE. A total of 42,583 residential properties were registered in the emirate from January to June. During this period, 47,187 properties were sold for a total of 96 billion dirhams, along with 5,546 villas for 15 billion dirhams, the Dubai Media Office reported last week.

Abu Dhabi Islamic Bank is the largest Sharia-compliant bank in the emirate by assets. The real estate market's boom reflects the strong economic fundamentals of the UAE and the ongoing growth that the country has maintained since emerging from the downturn caused by the COVID-19 pandemic. The UAE's economy grew by 7.9% last year, the highest rate in the last 11 years, following a 4.4% expansion in 2021, supported by the oil sector as the country implements its diversification strategy.

Abdel Bari stated that ADIB's mortgage loan portfolio, amounting to 18 billion dirhams, reflects the positive impact of economic development and is already outpacing the average growth of the mortgage lending market in the country this year. "We are growing steadily," he said, adding that the bank recorded approximately 2% growth in the first six months of the current year. "In absolute terms, this may seem insignificant, but...

The increase in activity in the real estate market is explained by the fact that 70% of buyers use cash, while only 30% require financing provided by financial institutions, including ADIB Bank. "We have a significant share in this financing due to our strong ties with major developers. We do not operate individually; instead, we partner with large organizations in Dubai and Abu Dhabi to offer unique mortgage solutions for their clients."

ADIB, the largest Sharia-compliant bank in the emirate by assets, reported a 61% year-on-year increase in net profit for the second quarter, as revenues rose to a record level. Net profit for the three-month period ending in June grew to 1.17 billion dirhams. Revenue for the reporting period increased by 56% to 2.2 billion dirhams. For the first half of the year, annual net profit rose by 55%, reaching 2.23 billion dirhams, while revenue increased by 50% to 4.3 billion dirhams. The bank expects to maintain its growth trajectory in revenue and profit in the second half of the year, driven by growth across all business segments and products. "The good thing is that ADIB's business model is not a volatile one. When you create volume and build your portfolio, it gives you a natural positive push that stays with you for some time. We are confident that this positive trend will continue in the second half as well."

Updated: July 31, 2023, 03:30.