Text size:

  • Small
  • Normal
  • Large

Emirates NBD backs mortgage cap

Mortgage cap: Emirates NBD has backed the Central Bank's controversial cap on home loans as a means of cooling the property market when necessary - but only if it is applied correctly.

Emirates NBD has backed the Central Bank's controversial cap on home loans as a means of cooling the property market when necessary and preventing cash buyers from overwhelming mortgage buyers - but only if it is applied correctly.

The Central Bank is "trying to manage the heat in the property market proactively," said Rick Pudner, the bank's chief executive.

"What we're concerned about is that we don't disturb the natural balance of the market and create undue pressure through an incorrect lending cap," he said.

The Central Bank is currently consulting lenders on appropriate loan-to-value limits on mortgages.

Regulators were probably concerned about the potential collateral damage to mortgage buyers if property transactions were to dry up among high-net worth individuals who can afford to pay cash, said Surya Subramanian, the bank's chief financial officer.

"It really depends on who you're trying to protect," he said. "The common man who buys with a mortgage will be left high and dry if cash buyers withdraw for any reason."

Banks' ability to generate new mortgages has lagged a rise in property values during the past year.

Central Bank data show the total amount of mortgage financing rose just 0.1 per cent to Dh161.7 billion (US$44.02bn) during the first nine months of last year. Property agents say cash buyers have been driving the pickup in home prices over the past 12 to 18 months.

 

ghunter@thenational.ae

Back to the top

More articles


Editor's Picks

 Cityscape Abu Dhabi 2014 will run until April 24, 2014. Fatima Al Marzooqi / The National.

In pictures: Cityscape Abu Dhabi 2014 opens
at Adnec

Key developments and master plans are being unveiled at this year’s property exhibition in the capital.

 Marina Square apartments Reem Island: Q1 2% rise. Studio - Dh65-68,000. 1BR - Dh75-95,000. 2BR - Dh110-145,000. 3BR - Dh170-190,000. Q1 2013-Q1 2014 no change. Sammy Dallal / The National

In pictures: Where Abu Dhabi rents have risen and fallen, Q1 2014

Find out how rental prices in the prime locations in Abu Dhabi have altered during the first three months of the year and the current rates you will pay according to data provided by Asteco.

 Room with a view from one of the 21 duplex penthouses located in the Gate Towers sky-bridge. The sports courts and swimming pools can be seen below. Courtesy Alda

In pictures: Aldar’s Gate Towers Penthouse Collection on Reem Island

Aldar launched its Gate Towers Penthouse Collection at Cityscape Abu Dhabi. The launch features 21 penthouses spanning the skybridge, with each having a private indoor pool and incredible views.

 The Wind, Energy, Technology and Environment Exhibition takes place from April 14 to April 16. Above, the Dewa showroom during last year’s Wetex. Jaime Puebla / The National

April corporate and economic calendar for the UAE and overseas

From Cityscape to Wetex to stock-market holidays to nations reporting first-quarter GDP figures, here is our helpful calendar of April's business events in the UAE and internationally.

 The Greens, villas: Q1 no change. 3BR - Dh210-250,000. 4BR - Dh210-260,000. 5BR - Dh220-300,000. Q1 2013-Q1 2014 5% rise. Pawan Singh / The National

In pictures: Where Dubai rents have risen and fallen, Q1 2014

Find out how rental prices in the prime locations in Dubai have altered during the first three months of the year and the current rates you will pay according to data provided by Asteco.

 Get the latest information on credit cards, bank accounts and loan products in the UAE. Mark Lennihan / AP Photo

Rates report: Latest on UAE loans, accounts and credit cards

Souqamal.com brings you the latest interest rates on banking products in the UAE.

Events

To add your event to The National listings, click here

Get the most from The National