Tamweel's return to have little impact on market - analysts

Size of real estate market and mortgage lender's anticipated stricter lending criteria set to stifle any boost
Tamweel's return to have little impact on market - analysts
Tamweel announced a return to lending Monday after it froze operations in 2008. (Bloomberg)
By Elsa Baxter
Mon 01 Nov 2010 02:16 PM

UAE mortgage provider Tamweel’s return to lending after a two-year freeze will have little impact on the country’s real estate market, analysts have said.

The size of the UAE’s real estate market as well as Tamweel’s anticipated stricter lending criteria will stifle any boost the mortgage provider’s return to business might bring, said analysts polled by Arabian Business.

“If you look at the size of the UAE real estate market, especially Dubai’s, it won’t significantly impact the market,” Mohamed Junaid Bray, research analyst at Abu Dhabi Commercial Bank (ADCB), said.

Tamweel announced a return to lending Monday after it froze operations in 2008 due to the impact of the global financial crisis. The Islamic mortgage provider said it will offer up to 80 percent financing on finished residential properties in Dubai and Abu Dhabi.

Bray forecast that Tamweel’s lending criteria would be stricter than in 2008, which would also limit any positive impact on the property sector.

Meanwhile, Dean Biddulph, senior financial consultant of Independent Finance, said the mortgage provider would implement a stringent lending policy.

“They will probably be pretty strict on who they take on. They probably won’t lend on high-end value, but I think they will be stricter then what they were in the past,” he said.

“I don’t think it’s going to make a major, major difference because there are other banks lending at the moment quite aggressively,” he continued. “Most of the other lenders are offering much better products than what Tamweel has offered in the past.

“I don’t think they will come back and offer better deals than what the other lenders are offering.”

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.

Subscribe to our Newsletter

Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.