Property will 'move again' as top lenders resume business

News Amlak and Tamweel will resume lending in 'weeks' is welcomed by industry.
Property will 'move again' as top lenders resume business
By Alex Delmar-Morgan
Wed 22 Apr 2009 02:26 PM

Property industry experts on Wednesday welcomed news that the UAE’s two biggest mortgage companies would start lending again soon.

“In the last few months Amlak and Tamweel have gone out of the lending market. Now they are coming back in very soon," said Ron Hinchey, partner at property consultant Cluttons.

"Those two organisations funded a large proportion of mortgages in this town. When they come back into the market this market can start moving again,” he added.

His comments, at real estate event the Dubai Property Society, come just a day after Nasser bin Hassan Al Sheikh, director general of Dubai's Department of Finance said Amlak and Tamweel were "weeks" away from lending again.

In October shares were suspended in the two Islamic home loan companies after they admitted facing solvency, funding and liquidity issues.

The two made up around two-thirds of the mortgage market in Dubai and experts feel the housing market will be boosted when they open their books again.

Lack of mortgage availability has put the brakes on Dubai’s housing market in the last six months.  

Tamweel chairman on Wednesday also confirmed the two home loan specialists would be lending imminently.

“It is weeks, not months that Tamweel and Amlak are going to be back in business. There are slight formalities that are being done on the federal level,” said Khalid Bin Zayed Al Nahyan.

The government‘s plan is to reactivate lending at the two companies, before merging them.

In October it was announced that Amlak and rival Tamweel would merge by the end of the first quarter this year in a $1.6bn deal to cope with the global economic downturn.

The two are due to merge under government-owned Real Estate Bank which would hold a majority stake in the newly created firm.

At the start of last month the UAE government committee completed a review into the potential merger and said it was looking at a range of options.

Any tie up between the two lenders would be the biggest merger in Dubai since Emirates NBD was formed in 2007.

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