UAE mortgage lending almost doubled in H1

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LOANS SOAR: Home loans in the UAE almost doubled during the first half of 2008. (Getty Images)

Mortgage lending in the UAE almost doubled in the year to June, central bank data showed, after property prices in Dubai rallied in the first half of 2008.

Total home loans at the end of June were worth 87.57 billion dirhams ($23.84 billion) compared with 45.65 billion dirhams a year earlier, the central bank said in a quarterly report on its website.

Outstanding mortgages jumped 34.9 percent from March, the data showed, as demand for properties in the second-largest Arab economy soared during a building boom spurred by high oil prices and relaxed foreign ownership rules since 2002.

Total credit to residents in the year to June also jumped 54.5 percent to 818.94 billion dirhams, the data showed.

Property prices in Dubai, home to man-made palm-shaped islands, surged 25 percent in the first half of 2008, Morgan Stanley said in August.

But real estate prices in the UAE are beginning to fall, analysts have said.

Secondary prices in Dubai and Abu Dhabi fell 4 to 5 percent, with Dubai's advertised villa prices falling by 19 percent month-on-month in October after several banks tightened lending conditions in August and September, HSBC said this month. (Reuters)

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