Tamweel, an Islamic mortgage provider, is targeting international buyers following the federal Government's move to extend property visas for up to three years.
Increased lending to expatriates, perceived as more risky, shows Tamweel is moving ahead after a period in which its ability to lend was curtailed and its shares frozen, analysts said.
Last month, the Government announced a new three-year visa scheme that would be offered to buyers of properties worth Dh1 million (US$272,250) or more, replacing existing visas which had to be renewed every six months. The UAE's visa requirements were tightened amid controversy in May 2009 as the property market stalled.
But the housing market is now poised for an uplift in demand from overseas investors, said Varun Sood, the acting chief executive of Tamweel.
"The recent announcement by the Federal Cabinet will bring about increased certainty to foreign property investors, which will in turn provide a boost to the UAE real estate sector," he said.
Tamweel is offering mortgages for a period of up to 25 years to investors from countries including GCC states, the UK, US and Canada in completed properties worth between Dh1m and Dh5m. The lender is also offering a product to homeowners who own their homes outright to borrow as much as half of the property value.
Tamweel's stock was frozen at the onset of the global financial crisis after it was blocked from access to sources of wholesale funding and a planned merger with Amlak Finance was aborted.
The mortgage provider returned to lending in November after a Dh374.7m acquisition by Dubai Islamic Bank, which led to Tamweel's stocks resuming trading on the Dubai Financial Market in May. With Tamweel's liquidity now improved, it seems prepared for riskier lending, said Murad Ansari, a financial analyst at EFG-Hermes.
However, past experience was likely to deter Tamweel from repeating the excesses of the UAE's property boom, he added.
"My sense is that after going through what happened in the last couple of years, they'd be much more conservative."
While the new visa law is expected to be welcomed by the UAE's expatriate buyers, the jury is still out among analysts over whether it will provide a significant boost to local property markets as new developments start to be delivered in Dubai and Abu Dhabi.
"For a country with a very high dependence on its foreign workforce, the new visa law should help to increase the overall appeal and attractiveness for expatriates interested in purchasing property in the UAE," said a research report on the Abu Dhabi market from CB Richard Ellis, a property advisory firm. "However, whether this structural intervention will actually revive the real estate market is yet to be proven."