UAE cen bank wants views on mortgage law by 31 Jan

  • Share via facebook
  • Tweet this
  • Bookmark and Share

Commercial banks have until 31 January to submit their feedback on the UAE’s new mortgage law, the central bank said.

Lenders and finance companies have been asked to put forward suggestions for a series of mortgage related issues including proposed loan-to-value rates and lending caps, the central bank said in comments published by the country’s state news agency WAM.

The notice follows a day after the central bank said it will look to introduce regulations for the Gulf state’s mortgage sector in the next six to nine months.

“Currently, there is no such system regulating real estate financing for individuals. This is now a proposed system to be issued in six to nine months depending on when special procedures will be implemented. What has been issued now is a kind of consultation with the banks,” said Sultan Bin Nasser Al-Suwaidi.

“We are not talking about percentages now. These are regulatory matters and are within the jurisdiction of the board of directors of the Central Bank, because the banks demand percentages be changed,” he added.

A circular sent to commercial lenders by the central bank in December said mortgage loans for expats should not exceed 50 percent of the property value of the first home and 40 percent for subsequent homes. Caps for UAE citizens were set at 70 percent and 60 percent.

Al Suwaidi’s comments appear to show the central bank is backing away from caps on residential mortgage lending after the Emirates Bank Association (EBA) submitted a formal proposal requesting the central bank ease the rules.

The cap follows a partial recovery of house prices in Dubai and new plans for several mega projects in the emirate. The central bank is seeking to prevent any repeat of the UAE’s property six year property bubble, which was followed by a crash.

The emirate was one of the worst hit real estate markets during the 2008 downturn but the emirate’s safe haven status amid regional political turmoil helped push up average prices by 19 percent last year, according to data from property consultants Jones Lang LaSalle.

Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Further reading

Features & Analysis
Do celebrity branded projects ever work?

Do celebrity branded projects ever work?

The long list of celebrity-endorsed real estate developments...

Is this the end of the Gulf’s Indian cash dash?

Is this the end of the Gulf’s Indian cash dash?

From currency woes to taxation loopholes closing and a clampdown...

Mall talk

Mall talk

Plans for Dubai’s Mall of the World have made headlines all over...

Most Discussed
  • 24
    World's most pierced man refused entry to the UAE

    Tolerance has its limits everywhere including Dubai and those who considered Dubai a lawless circus were held thank you Dubai authorities... more

    Thursday, 21 August 2014 10:51 PM - Khalil
  • 23
    Baby NOT on board?

    Some of you cry babies need to get your own personal apartments on the plane ! You cry more then the babies I have seen in my travels. LOL more

    Thursday, 28 August 2014 9:10 AM - Jim
  • 21
    Israel “must be punished” over Gaza, says Dubai police chief

    This high moral ground that Mick is talking abt sound very familiar. May I remind Mick that the US & its British ally alone killed over 1 million innocent... more

    Thursday, 7 August 2014 4:12 PM - Mathew