Reidin, a leading real estate information company focusing on emerging markets, has announced two new time series  - Housing Affordability Index (HAI) and Rental Affordability Index (RAI) - for Dubai markets.

HAI aims to measure how affordable is buying a median-price house in Dubai, UAE, by a middle-income family considering the housing prices, prevailing mortgage interest rates, mortgage terms and lending requirements, stated Reidin.

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 per cent down payment and a qualifying ratio of 25 per cent, it stated.

For example, a composite HAI of 120 means a family earning the median family income has 120 per cent of the income necessary to qualify for a conventional loan covering 75 per cent of a median-priced existing single-family home.
 
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, according to  Reidin.

Index series are calculated monthly covering both apartments plus villas and distribute to the press and public at 10am on the 15th of each following reference month.

Ozan Demir, the research and data manager of Reidin Dubai, said: "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," he added.-TradeArabia News Service