- City Fajr Shuruq Duhr Asr Magrib Isha
- Dubai 05:27 06:41 12:35 15:52 18:22 19:36
A bank committee charged with handling controversial mortgage lending rules announced by the Central Bank last week has proposed raising the property credit ceiling to 60 per cent for expatriates who meet specific conditions.
The committee, which was formed by banks at their Sunday’s emergency meeting, also suggested raising the maximum limit for Emiratis to 80 per cent.
According to the Dubai-based Arabic language daily Emirat Alyoum, the committee approved the central bank’s rules regarding the financing of the second and other property units but sought revisions for the rules on the first property.
“The committee reached a proposal at its meeting in Dubai yesterday setting the ceiling for the first installment of the mortgage credit for the first property unit at 80 per cent for Emiratis and 60 per cent for expatriates,” the paper said, quoting bankers.
“But the committee stressed that expatriate borrowers must meet specific conditions, including the period they have spent in the UAE, their financial adequacy and ability to repay debt, and whether the borrower is an employee or an investor.”
The report said the committee, created by the Emirates Bankers Association, would send those proposals to the country’s 51 banks to study them and respond before it presents them to the central bank.
Quoting banking sources on Tuesday, Emirat Alyoum said the central bank would likely not revise its new rules curbing mortgage credit.
“We do not expect the central bank to revise its decision to cap mortgage credit..the central bank fears a fresh wave of speculation and deemed it necessary to put pressure on the banks to prevent them from lavishing mortgage credit amidst a surge in demand for property financing,” it said.
On December 31, the central bank told banks to limit their mortgage loan to expatriates to 50 per cent of the property value of the first unit and 40 per cent for the second and other units. Credit to Emiratis was capped at 70 and 60 per cent respectively.
Unlike Saudi Arabia, the UAE, the second largest Arab economy, does not have a mortgage law but is planning to enact such legislation.
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