Noor Islamic Bank, a Dubai-based lender that abides by Sharia principles, said it had started offering mortgages for non-UAE residents in the GCC and most G20 countries to tap a burgeoning international interest in Dubai real estate.
The offering, which began several months ago, has been particularly well received by residents of Saudi Arabia and other GCC countries, said John Chang, the head of consumer banking at Noor Islamic. The so-called profit rate, the equivalent of interest rates at conventional banks, is 5.75 per cent for non-residents.
Mr Chang downplayed concerns that a bubble may be forming in the property market in Dubai, with prices increasing more than 30 per cent this year.
“There is a collective wisdom in the city now,” he said. “The crash wasn’t so long ago. If you look at it, prices have improved but there are checks in place. And the composition of people buying it are different.”
“People are buying it for living. The population is growing, so people need a place to stay. There are not that many off-plan properties at the moment.”
For non-residents in the GCC, Noor Islamic is offering loans of up to 60 per cent of the value of properties being purchased, while residents in G20 countries can get 50 per cent financing. Residents of Indonesia, Argentina, Brazil and Mexico are not eligible.
The value of mortgages taken out this year in Dubai has increased 67 per cent to Dh51.3 billion, according to the Dubai Land Department.
“Our Eibor [Emirates interbank offered rate]-based pricing is very competitive and transparent and the application process is very simple,” said Mr Chang. “We are the only bank offering such a wide range of countries. Some of our competitors only have it for the countries where they are represented.”