Finally, news has arrived from the UAE Central Bank that banks are now able to loan up to 80% of a property’s value to Emiratis and 75% to expats in the region.
The bank did stress that the usual rules apply to the 23 national banks and 28 foreign units operating in Dubai, of ensuring the financial eligibility of the candidate and their resources.
The new mortgage lending system, however, aims to tighten regulations, providing all banks within the region with effective frameworks to help control mortgage loans. This also comes after the Dubai Land Department (DLD) took action last year to curb price speculation, and also doubled property registration fees from two to four percent in order to make the system more regulated.
The Dubai property sector is performing extremely well at the moment, and all of these measures are hoped to protect it in the future; and hopefully prevent a situation like 2008 from happening again where property prices fell.
Things look optimistic for 2014 so far, with significant growth expected and the property boom currently being enjoyed looking set to continue throughout the year – as figures for last year showed a 52 per cent jump in the number of transactions.
The Government of Dubai Land Department released data showing that transactions have in actual fact shot up from 41,767 last year to an impressive 63,652.
Dubai’s profile as a top destination for expats relocating to another country owes a lot to both its popularity as a tourist destination, as well as its strong position with investors in the region. The strengthening of new regulations to reinforce trust and confidence in investors has supported this side of its success even more, and its tourism boom means many visitors who come for a holiday return as home buyers.
For UAE nationals seeking loans for a second house or investment property, they are eligible for a loan amounting to 65% of the property’s value, while expats buying a second home or investment property are eligible for a maximum of 60%.
Abdulaziz Al Ghurair, Chairman of UAE Banks Federation, representing banks in the country, has called for penalties to be brought into action for any banks or their staff who do not follow the new rules.
There are many different banks that offer these loan deals so it’s always the best option to look for a personal loan that suits your needs.
Interest rates fluctuate, and a mortgage is a big investment, so you should take your time in finding the best deal for you. Though a house is expected to appreciate in value over a period of time. This is not always the case.
The recent global financial turbulence is testimony to the fact that when it comes to personal loans and mortgages, you have to be vigilant in choosing the best deal for you and your family.
Not to overstretch yourself, and make sure your repayments are manageable. So if you are an ex pat looking to invest in the UAE, now is a good opportunity to make sure you find the correct loan for you to make a long term financial investment.