UAE nationals seeking a mortgage for a first property will be able to buy access a loan up to a maximum of 80% of the property’s value for properties worth Dh5 million and lower and 70% for more expensive properties.
An UAE national wanting to buy a second property will be limited to a maximum of 65% of the value of the property regardless of its price.
Expats living in the UAE buying a first property will be able to borrow up to 75% of the value of the property if it costs DH5 million or less and 65% for properties worth more. For a second property the limit has been put at 60%.
However, mortgage applicants buying off plan will be limited to as maximum mortgage loan of 50%. The new rules also set a maximum loan period of 25 years and the maximum age for the borrower at the time of the last instalment will by 70 years old for UAE nationals and 65 for expats.
The central bank also said the total monthly instalments of all debt should not exceed 50% of an applicant’s monthly income. The maximum financing allowed for UAE nationals will be eight times of annual income and for expats it will be seven times of their annual income.
But the rules are not sufficient according to some in the property industry. Ziad El Chaar, managing director of DAMAC Properties, said he is disappointed that they do not include any guidelines for banks to provide a pragmatic and practical non-resident mortgage.
‘We believe this is required to attract a more international investor base. While we welcome all efforts by the UAE Central Bank to increase regulation and offer further security in the Dubai property market, we believe there is also a requirement to provide overseas clients the opportunity to purchase a home in the UAE and we call on all banks to implement such a facility with easy, straightforward application requirements,’ he explained.
Meanwhile, the property industry in Dubai is set to see more regulation, according to the Dubai Land Department. Director General Sultan Butti Bin Mejren told an investment summit that they are needed to prevent a property bubble due to rising prices.
‘Dubai will strictly enforce existing rules and if necessary set new ones to prevent another bubble from forming in its property market, while cracking down on abuses by real estate brokers,’ he explained.
He added that he does not believe there is currently a bubble forming but a sharp increase in property prices is not healthy for the market going forward.
‘What we're trying to maintain is a sustainable growth in the real estate sector over the coming five years,’ he added.
Most Popular Slideshows
- Meet the Aussie “Belieber” Who Survived Car Accident When Kept Conscious by A Friend Talking About Justin Bieber [PHOTOS/VIDEO]
- Top 10 Highest-Paid Tennis Athletes as Ranked by Forbes: Roger Federer, Maria Sharapova, Novak Djokovic and More
- "The Great Gatsby" vs. "The Rocket" at AACTA Awards 2014: What You Should Know About Top Feature Films Leading Aussie Oscars Nominations [PHOTOS/VIDEOS]