By Andy Sambidge
Developer's MD says central bank's new system does not include guidelines for non-resident mortgage
Dubai-based developer Damac has expressed disappointment after the UAE Central Bank's new rules on mortgages failed to include guidelines to provide a non-resident mortgage.
The new rules will limit home loans for expatriates to 75 percent of a property’s value for a first investment of less than AED5m ($1.36m) while UAE nationals will be allowed to borrow up to 80 percent.
But Damac managing director Ziad El Chaar said there were no guidelines issued to provide a non-resident mortgage in the UAE.
He said: "This new system does not include any guidelines for banks to provide a pragmatic and practical non-resident mortgage, which we believe is required to attract a more international investor base.
"While we welcome all efforts by the UAE Central Bank to increase regulation and offer further security in the Dubai property market, we believe there is also a requirement to provide overseas clients the opportunity to purchase a home in the UAE and we call on all Banks to implement such a facility with easy, straightforward application requirements."
The UAE Central Bank's new rules, announced earlier this week, will also restrict expatriates to borrowing 65 percent of the value of more expensive homes, and nationals to 70 percent.
For second and subsequent property purchases, expatriates will only be allowed to borrow 60 percent of a property’s value and UAE nationals up to 65 per cent, regardless of cost.
All mortgages will be restricted to 50 percent for off-plan properties, regardless of purpose, value or nationality.
El Chaar has previously claimed banks in the UAE are being "too timid", saying banks must return to lending to allow international buyers the opportunity to engage in property ownership in the emirate.
He said the idea of a non-resident mortgage is not a new one. It is possible to obtain such a product to invest in the property markets in Canada, the UK, Spain, Australia and many developed nations around the world.
A down payment in the region of 25-30 percent is generally required and the lender will need to see proof of employment with an established company.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.
All the best and good luck trying to sell overpriced property, you are going to need it!
Try delivering what you actually promise first and then you may have repeat business to capitalise on, without that, keep dreaming of ''YE OLD DAYS'' to come back.
Still not touching it with a barge poll.
UAE will have to tighten their consumer protection laws to stop companies like Damac leaving customers feeling ripped off for so many billions of dollars on their projects which are running so late for so many years. More transparency and less secrets please Damac!
Every developer had been delayed for one reason or another, Nakheel cancelled projects worth Billions of Dollars and told their customers to wait with no other options! Its always easy to talk in a bad manner about a nongovernmental backed developer because you are simply scared to talk about the other