REIDIN – Dubai Housing Affordability Index (HAI) aims to measure how affordable is buying a median-price house by a middle-income family considering the housing prices, prevailing mortgage interest rates, mortgage terms and lending requirements.
According to Wikipedia a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index above 100 signifies that family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced home, assuming a 25 percent down payment and a qualifying ratio of 25 percent. For example, a composite HAI of 120.0 means a family earning the median family income has 120% of the income necessary to qualify for a conventional loan covering 75 percent of a median-priced existing single-family home.
REIDIN – Dubai Rental Affordability Index (RAI) aims to measure the level to which a typical middle-income family can afford to RENT a median-price house. It is defined as the ratio of a household disposable income to the required income eligible for a rental on a median priced home.
Index series are calculated monthly covering both apartments plus villas and distribute to the press and public at 10:00 AM on the 15th of each following reference month.
Ozan Demir, Research and Data Manager of REIDIN Dubai added: “These indices set is a good sample of our continuous efforts to bring more transparency to the real estate markets. We strongly believe, these new indicators will add more value to Dubai real estate markets, increase transparency, bring more confidence to local and international investors hence increase the FDI coming to UAE overall. It will also help real estate professionals on comparing real estate price trends with household income levels, mortgage rates and rental values in a Dubai and deliver more value to their clients.”