Homebuyers spent a whopping Dh1.4 billion on mortgages in Downtown Dubai during the first six months of 2013, making it the area in the UAE with the greatest amount of money borrowed against it.

In total, homeowners took out 255 mortgages in the Emaar-masterplanned, two-square-kilometre neighbourhood around Burj Khalifa from January through June at an average loan of Dh5.78 million.

The figures, which come from the property data research company Reidin, found that another project masterplanned by Emaar, Dubai Marina, was the most popular area of the UAE for new mortgages by number (rather than value).

Marina buyers took out 448 new home loans in the first half of the year worth a total of Dh840 million and averaging out at Dh1.8 million each.

The two developments were followed in new-loan value by:

• Nakheel’s Palm Jumeirah (Dh4.8m average value, 168 loans, Dh822m total value);

• Emaar’s Arabian Ranches (Dh2.8m average, 250 loans, Dh722m total);

• and Emaar’s The Springs and The Meadows (Dh2.5m average, 243 loans, Dh612m total).

These findings come as property brokers report that house prices in Dubai are the fastest-rising in the world, prompting concerns among some investors that the emirate could be heading for a second housing overheating.

While the latest numbers show that new masterplanned schemes from Emaar and Nakheel are the most popular for end users, the researchers pointed out that those projects are some of the largest in Dubai by number of flats and villas available for purchase.

Reidin found that in total, 1,364 mortgages were taken out during the first six months of the year on the country’s five most popular locations.

This was 53 per cent more than the 886 loans taken out in the top five developments during the first half of 2012, when the same five projects again topped the UAE mortgage charts.

This was also an 18 per cent increase on the 1,147 loans taken out on the five most popular developments at the peak of the market in the first six months of 2008, when Dubai Marina was the UAE project against which most mortgage cash was borrowed.

During the first six months of 2013, the total value of loans taken out in the five most popular developments stood at Dh4.4 billion. That represents a leap of 83 per cent from the Dh2.4 billion taken out during the same period the previous year and, perhaps more surprisingly, almost as great an increase from the comparable figure at the market’s peak.

Back in the first half of 2008, Reidin reported that Dh2.5 billion of loans had been taken out against the five leading developments.

Typically mortgages in the UAE are worth around 80 per cent of the total purchase price. Only two UAE banks lend to off-plan buyers.

“We believe that these areas will continue to be at a premium, but certainly there are other areas which are becoming more and more desirable and accessible,” said Shehzad Abbasi, executive director of mortgage adviser Gulf Capital Mortgage Company. “We’ve seen a lot of beautification work going on in places like JLT, meaning it will become more popular in the short-mid term. In the longer term, [there are] new areas being developed by Meeras, such as Mohammed bin Rashid City, and other areas such as Dubailand, which is now also seeing a lot of new villas being constructed.”

"For as long as it makes economic sense to buy instead of rent, then we believe the levels of borrowing will continue to rise. With mortgage rates now around 3.99 per cent and rents going up every quarter the question now is does it make economic sense to buy instead of rent?" he added. "If the Indian rupee is steady, the region is relatively stable, and Dubai Land Department does not overly tighten the conditions regarding transfer of title deeds, the trends will continue upwards."

lbarnard@thenational.ae