By Andy Sambidge
Emirates NBD official says better mortgage rates needed to reinvigorate market
Emirates NBD said on Monday that banks must play a key role in reinvigorating the UAE's real estate sector by offering better deals on home loans.
The country's biggest bank said it was time for banks to take advantage of the "huge potential for growth in home financing".
Saif Al Mansoori, deputy head, group marketing, Emirates NBD, said in a statement: "There is huge potential for growth in home financing, and we believe it is vital for banks to play an important role in re-energising this sector."
The comments came as Emirates NBD announced the launch of a new pricing structure on mortgage loans across all customer segments, with interest rates starting at 6.99 percent for a year.
It added that preferential rates would also be available on mortgages for UAE nationals.
Al Mansoori added: "The revised mortgage pricing strategy is supportive of the current economic environment and is in line with our strategy to further grow our retail assets book."
According to the UAE Central Bank's statistical bulletin, bank mortgage loans increased by over 15 percent to AED163.19bn by the end of 2010.
Industry data also suggests that at current growth rates, the UAE's real estate mortgages market will top the AED200bn mark by mid 2011.
Mortgage financing from Emirates NBD is available for UAE nationals for up to 80 percent of the value of the property, while salaried nationals over the age of 21 with minimum three years of employment experience are eligible to apply for home financing loans up to a maximum of AED5m, the bank said.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Emirates NBD is not able to respect the home loan that they have issued till now! How we can trust in this and other bank? The bank has changed the contractual agreement after less then 2 years and how they wished! How many persons have found their interest for the HOME LOAN changed till double!!
On August 2010, Emirates NBD replaced the EIBOR with their CBR (that till now nobody has given to me the reasons and how it is calculated). Now as per my contract should I pay EIBOR + 3.5%, where the EIBOR is now at 2.17%, but the bank has applied CBR+3.5%, where CBR is 4.5%. I'm paying 8% instead of 5.67 %. I'm giving to the bank every month 2,000 AED that are not due!! and they told me pay or jail ! If they want increase the home loans demand, they have to respect the contracts otherwise these will became only a trap!!
I totally agree with your comment regarding the change from EIBOR to CBR. The interest rate on my Home Loan has also increased from 5.75% to 8% due to the CBR.
EmiratesNBD has the one of the highest Home Loan rates in the UAE. Is the 6.99% going to apply to exiting customers???
Unfortunately the real estate market in the UAE has now been well understood by potential investors and they do not like what they see. There is no transparency nor is there consistency. As to the protection of parties involved, that is a real problem. Only the financier and the developer are protected. There is no due diligence of good business practices or goo legal practices. Net result is that in reality you have to be extremely well heeled and have deep pockets to invest in this market as protecting your investment carries some real risks.
Regrettably, the masters of the market have seen what is needed and have done nothing. I am surprised as the goodwill of the market and most of all the rulers is brought into question and that will be the kiss of death for this market.