http://www.thenational.ae/thenationalco ... y-recovery
The Central Bank has capped lending to mortgage customers as part of a raft of new rules aimed at avoiding another property bubble.
The rules, which have been under consideration since the onset of the Dubai property crisis, limit financing for nationals to 70 per cent for the first house, and 60 per cent for any further properties. Expatriates can borrow up to 60 per cent for the first house and 50 per cent after that.
Of course, certain interests are outraged: http://www.thenational.ae/thenationalco ... rtgage-cap
The country’s biggest bank has urged a rethink of the Central Bank’s plan to cap local and expatriate mortgages.
Amid a property industry backlash, National Bank of Abu Dhabi (NBAD) said it was surprised with the “sudden decision”.
The Central Bank’s plan appears to have created confusion in the market. A note from Bank of America Merrill Lynch to clients this week said: “We have spoken to mortgage departments of a few banks who are all seeking clarity from the [Central Bank] … this is likely to have an immediate impact on mortgage lending going into the new year.”
NBAD, which has a market capitalisation above Dh39 billion (US$10.61bn), and other lenders were taken by surprise this week when the central bank introduced loan to value limits on mortgages.
“We were not part of this decision making,” said Abdullah Al Otaiba, the senior general manager of domestic banking at NBAD.
“We would like to understand what is the benefit of such a decision in a market that is about to recover.”