UAE's new expat mortgage law: the facts so far

Posted by: Joe Peci Monday, 14 January 2013 12:18 PM[UAE] - USA

Basically dubai banks are telling the 99% to take a hike. They want their properties to be held by the 1%, the rich and the wealthy from all around the world, who has no need for any of their mortgage products.
If you are part of the 99%, just pay your dues to the 1%, maybe one day your kids will have a place to call home. But for now, make sure that the rich get richer.
What's the impact of the new law? higher demand for rentals, which will result in a higher monthly leases. Property prices will go down initially but will go back up, balanced by the ROI from rentals. Bottom line, the 99% get to sit on the sideline.

Posted by: Sole Sunday, 13 January 2013 2:12 PM[UAE] - UAE

This step is perfect move to increase banks incomes especially what they call Islamic finance , these banks will buy properties for cash and then rent it on rent to own basis but with very low rent amount on condition that they will finance 50% of the property for 10 or 15 year and the remaining 50% will be paid by the rent . they will defiantly invent 1000 way to play around the new mortgage law and legalize it , in the end bankers are devils who have been kicked out from hell for their bad behaviors and defiantly they will find ways to solve this issue.

Posted by: Aliyu Monday, 14 January 2013 2:51 PM[UAE] - United Arab Emirates

LMAO @ your statement 'bankers are devils who have been kicked out from hell for their bad behaviours'.

I hope this is not true. Otherwise, we all are in trouble.

Posted by: CFA Sunday, 13 January 2013 11:15 AM[UAE] - UAE

Every stage of recovery has its designed strategies that can smoother the negative effects of any cycle, CB's move is premature lacks conviction... in long run we are all dead, so I am concerned about short term and I beleive its not good for the market as well as the economy.

Posted by: Pierre nayagam Thursday, 10 January 2013 10:34 PM[UAE] - Dubai

High end ; I haven't seen a price drop psf, instead a lot more properties have appeared on the market , obviously by those who can earn 5% plus. Somewhere else which is where this market cap will retain for a while ..glad to hear ; no more flipping / glad to see good properties worth it's value, safe for the mid term , laughing for the long . In the meantime ; lets watch people stew !!

Posted by: kingkaiser Monday, 14 January 2013 2:49 PM[UAE] - UAE

Pierre, dont you think 2 weeks is a bit soon to get excited about not seeing an impact? Real estate tends to be an asset class that is slow to react.

Posted by: Jason Dixon Wednesday, 9 January 2013 4:59 PM[UAE] - UAE

If the CB refuses to compromise and holds at 50% ltv, it puts existing banking customers in a far weaker position to re negotiate their interest rates. I've no doubt banks have already recognised that the majority of their customers would be unable to move to another lender as they are unable to raise the 50% deposit. As a consequence there is no motivation for banks to reduce interest rates /increase competitivness as they have virtually zero risk of customers moving to the competition. Am I being cynical?? I don't think so!