We noticed you're blocking ads.

Keep supporting great journalism by turning off your ad blocker.

Questions about why you are seeing this? Contact us

Font Size

- Aa +

Sat 10 Jul 2010 03:14 PM

Font Size

- Aa +

UAE banks to offer 'cheaper' money to Tayseer projects

Dubai Land Dep't expects better value mortgages, funding for selected projects.

UAE banks to offer 'cheaper' money to Tayseer projects
DUBAI REALTY: House prices in parts of the emirate have fallen more than 50 percent from their peaks in the summer of 2008. (Getty Images)

Top level talks between UAE banks and Dubai Land Department are expected to lead to "cheaper" money being available for funding and mortgages on selected projects.

The Land Department on Saturday announced that the UAE's leading financial institutions have signed up to offer funding to a shortlist of 40 Dubai real estate projects.

The projects have been included in the first phase of the Land Department's Tayseer initiative which will effectively act as a ratings agency for the emirate's property projects.

Following the talks, an action plan has been agreed which will see the 15 banks formally submit requests for Tayseer authorisation within 10 days, a statement said.

It added that Tayseer projects are expected to attract "cheaper" money in the form of project and end user funding from the banks.

Sultan bin Butti bin Mejren, director general at the Land Department, said: "While the final details of the agreement between the Department and the bankers will be completed within one month they already know what they will get from Tayseer.

"The key offering is a government guarantee, through the Land Department, that Tayseer qualified projects meet the required criteria to be classified as tier one."

This criteria stipulates that each of the 40 projects - all within the Dubai Marina, Business Bay, and Jumeirah Lake Towers projects - must be 60 percent completed and sold.

Bin Butti added: "Tayseer offers the financiers precisely what they have been asking for; well resourced projects that meet strict rigorously enforced criteria which virtually guarantee they will be finished to a specific schedule."

Bankers have been told by Land Department chiefs that more projects will be added to the Tayseer initiative over the next three years to maintain investor confidence in Dubai's real estate sector which has been badly dented by the impact of the global economic crisis.

House prices in parts of the emirate have fallen more than 50 percent from their peaks in the summer of 2008 although the declines have slowed in 2010, according to reports from property consultants.

Marwan bin Ghulaita, CEO of the Real Estate Regulatory Agency (RERA), said of Tayseer: "This initiative will inspire confidence and accelerate the Dubai real estate market's continuing maturity."

He added: "Implementation of Tayseer will effectively drive demand to where it can be met, direct finance to infrastructure development and encourage the influx of new investors we have seen who are here for the long term rather than as speculators.

"Tayseer is the key which will unlock the future and it is good for the banks because it will ensure their returns are guaranteed."

Bin Butti said the Land Department would begin the process to "initiate new laws and introduce new procedures specific to Tayseer" after winning the backing of bankers.

Arabian Business: why we're going behind a paywall

For all the latest UAE 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.
Real news, real analysis and real insight have real value – especially at a time like this. Unlimited access ArabianBusiness.com can be unlocked for as little as $4.75 per month. Click here for more details.
by chance Landlord 10 years ago

This is a very wrong step and will create more liquidity in the market which will push the rental value further down. Rather they should inject more liquidity in banking system in order to reduce the interest rate on existing mortgages. Higher service charges coupled with exorbitant interest rates on mortgages was already killing the small landlords who has put in all their life time saving to get some return. Now diminishing rental value will is further the deteriorating the situation and shortly people will start defaulting on their mortgages. I fully support the diminishing rental value will support the economy since Dubai will be more affordable and people will have increased disposable income to spend. But higher mortgage rates and service charges are criminal and they should do something about that.

Saif Bin Ahmed 10 years ago

Can someone please explain to me what interest rates here e.g. mortgage etc are amongst the highest in the world? Now things are affordable its still so costly to buy. Surely this is something that needs to be addressed. Its like banks want everyone to rent at this particular time.