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UAE confirms no change in new expat mortgage rules
| Published: | 9 Jan at 6 PM |
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Tagged: Property Abroad, UAE
As the United Arab Emirates expat community digests the ramifications of the emirates’ new ruling on expat mortgage credit, an article in Emirat Alyoum makes it clear there will be no reversal.
Media reports quote the central bank as stating that the new rules will not be revised, and change would fuel speculation and spark a second real estate crisis.The regulations now state that expat mortgages will only be granted on 50 per cent of the value of the individual property.
According to UAE daily newspapers, the restrictive regulations were brought in at the end of 2012 after the central bank had become aware of a surge in mortgage lending to expat workers. The stated aim was to curb freehold ownership by expats and control the property market.
Emirat Alyoum also quotes an unnamed senior bank official as saying that property developers had begun selling off-plan units, a practice which could lead to investor speculation and unsustainable price hikes. The official added that no moves to reverse the bank’s decision were expected due to the risk of excess mortgage credit fuelling a further speculative property boom.
At the same time as the restriction was placed on potential expat buyers, a similar law was applied to Emirati purchases, whose mortgage loans will now be capped at either 60 or 70 per cent. At present the UAE has no specific law relating to mortgage loans, but is planning to introduce legislation in the near future.
Media reports quote the central bank as stating that the new rules will not be revised, and change would fuel speculation and spark a second real estate crisis.The regulations now state that expat mortgages will only be granted on 50 per cent of the value of the individual property.
According to UAE daily newspapers, the restrictive regulations were brought in at the end of 2012 after the central bank had become aware of a surge in mortgage lending to expat workers. The stated aim was to curb freehold ownership by expats and control the property market.
Emirat Alyoum also quotes an unnamed senior bank official as saying that property developers had begun selling off-plan units, a practice which could lead to investor speculation and unsustainable price hikes. The official added that no moves to reverse the bank’s decision were expected due to the risk of excess mortgage credit fuelling a further speculative property boom.
At the same time as the restriction was placed on potential expat buyers, a similar law was applied to Emirati purchases, whose mortgage loans will now be capped at either 60 or 70 per cent. At present the UAE has no specific law relating to mortgage loans, but is planning to introduce legislation in the near future.
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