By Andy Sambidge
Total value for homes loans to end of Nov is AED15bn, compared to AED74bn in 2008.
The total value of home loans extended by banks in the UAE slumped to AED15bn in the first 11 months of 2009, down from AED74bn the previous year, it was reported on Wednesday.
Central Bank figures showed growth in domestic mortgage credit fell from around 123 percent during 2008 to just 12 percent during January-November 2009, Emirates Business reported.
Tight credit policies at the UAE's 24 national banks and 28 foreign units contributed to the sharp slowdown while poor investors' confidence was also a factor.
Personal loans were also hit, according to the figures, with those for business purposes rising by only around AED10bn in the first 11 months of 2009 compared with an increase of nearly AED54bn in 2008.
The paper also reported that personal loans shrank slightly after leaping by nearly AED26bn in 2008.
The figures showed total credit in the UAE grew by only around 4.6 percent in the first 11 months of 2009 compared with 47.6 percent in 2008.
Of course lending on a personal and for homes are down. Simply GREED!!! The UAE has got to have one of the highest interest rates around. While other markets are providing mortgages at 3-5% per annum, we here wind up paying 7-9%. Talk about a highway robbery!!! The smart will look to settle their loans ahead of time and the even smarter will not take a loan (and hence will not buy a home here). After all, WHO WOULD DARE?
why should any one take a mortgage when the interest rate is higher than the return on investment , the rent curently is 5-6% of the total property price while banks interest are 8-9% , in aditional to service charges and other hiden expences plus the unclear current property law and visa issues , all that make the transaction very risky in aditional to the fact that if any investor default on payment for whatever reason whe will end up in jail for bounced cheques due to the fact that the UAE banks consider the mortgage as additional security and blackmail the client with the postdated cheques colected as instalment or loan guarantee . mortgage activities in the UAE will never recover unless the goverment interfere and release new rules to secure the life and investment of the people who take the risk and buy property ., puting investors and property owners behind bar for financial or comercial dispute is not fair and will discourage people