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.



Back to the top

More articles

Editor's Picks

 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.

 Above, the private pool of Ocean Heights' five-bedroom penthouse flat. Courtesy Christie’s International Real Estate

In pictures: Penthouse flat is height of Dubai luxury living

A five-bedroom penthouse in Ocean Heights in Dubai Marina is on sale for Dh25 million and comes with a private pool and an unparalleled view of Dubai.

 The cooling towers of the Temelin nuclear power plant near the Tyn nad Vltavou in Czech Republic. The country wants to continue expanding nuclear energy capacity despite cancelling a tender to build two new units. David W Cerny / Reuters

In pictures: Best business images for the week to April 17, 2014

Here are some of the best business images for the week to April 17, 2014.

 Three generations of the Hakimi family tend to their stall Crawford Market in Mumbai. Subhash Sharma for The National

In pictures: Shopper’s delight at Crawford Market in Mumbai

Crawford Market is an old British-style covered market dealing in just about every kind of fresh food and domestic animal imaginable. Later on renamed Mahatma Jotirao Phule, the market remains popular among locals and visitors by its old name, taken from Arthur Crawford who was the first municipal commissioner of the city.

 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.

 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.


To add your event to The National listings, click here

Get the most from The National