Tag Archives: UAE Mortgages

A guide to buying property & getting a mortgage in Dubai

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Buying a property in the UAE can be daunting, especially for the first-time buyer. Expats have only been able to buy here since 2001, and only in specific areas, so many people are unfamiliar with the process as it can be quite different to a home country. As buying a home is the largest purchase most of us will ever make, it is important to get the facts.

I have an excellent in-house mortgage department and we can walk you through the full process from finding a property, getting mortgage approvals, the final offer, to dealing with the Land Department at completion.

This article is a guide to what you need to know when buying property in Dubai. I have already written an article on the buying process in the UK and there will shortly be another about the tax issues to consider in respect of UK property ownership.

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UAE mortgages and beyond…

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I would like to let everyone know that I now have a dedicated in-house mortgage desk which can source a wide range of products and services from the whole of the market.

If you are interested in buying a new apartment or villa, refinancing, or would like to release equity from an existing property, we can assist. The strong and well-established relationships we have with some of the leading banks in the UAE means we can access the best rates, along with the best service.

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News: Further restrictions on UAE mortgages – edited 21/01/13

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EDIT 21st January 2013

According to an article published by Zawya issued today taken from Reuters:

“The United Arab Emirates central bank will not impose limits on mortgage lending without consulting commercial banks, and any new rules are not imminent, central bank governor Sultan Nasser al-Suweidi was quoted by a local newspaper as saying….
….But Suweidi was quoted as saying by Al Ittihad newspaper on Monday that there had been a “misunderstanding” in the media and that no central bank ruling had been issued, only a warning to banks to be prepared for rule changes in the future.”

This is rather strange as I have a copy of the notice that was issued to all banks and after it has set out the revised loan to value limits,  it clearly states that “all  banks and finance companies are required to comply with this notice”.

It seems that some back tracking is taking place…

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Original post 31/12/12

Yesterday the UAE Central Bank issued a circular, to take immediate effect, limiting mortgage borrowing to no more than 50% of the value of the property for expats. This was largely unexpected and lenders are having to change their offerings immediately as many were previously lending 70-80% of a property’s value.

It appears that pre-approvals for higher loan to value mortgages are also being withdrawn and that will leave many people unable to proceed with a purchase. It will also severely restrict the remortgage market.

It appears that the Central Bank intended to stop the aggressive lending that fueled the boom years in the UAE property market and led to significant bad debts across the banking sector, something many are still saddled with.

The circular states that mortgages for expatriates are being limited to 50%
for their first property, and those to UAE nationals at 70% of the property’s value. For subsequent units, expats can borrow up to 40% with UAE Nationals being restricted to 60%.

There have been several claims recently that the UAE property market was showing an upturn, but this news will surely halt that as fewer people will be able to afford such large deposits and for the same reason will reduce the secondary market.

It’ll certainly be interesting to see the reactions of interested parties over the next few weeks. Happy New Year!

keren@holbornassets.com

dubai property