Abu Dhabi Finance has launched a financial product aimed at buy-to-let investors from overseas.
Abu Dhabi Finance launches expatriate mortgage scheme
Overseas property investors are the target of a new mortgage product launched by Abu Dhabi Finance, a home loan provider established last year. Abu Dhabi Finance's new mortgage tailored for buy-to-let investors residing outside the UAE is intended to sweep up demand from foreign investors keen to tap into the country's property market. But property analysts have questioned the level of risk appetite from overseas for investment in property at a time when values remain under pressure. Falling property prices and the delay or cancellation of development projects since the start of the year have badly hurt international speculators who bought into the UAE's property sector during the boom years. At the same time, more than 400 projects with a total value of more than US$300 billion (Dh1.101 trillion) have been placed on hold or cancelled altogether in the UAE, according to a report by Proleads Group last month. "In the past, the speculators formed the backbone of the real estate sector, the future market stability relies on locals and resident expatriates with a desire to buy a home rather than a future contract they can flip," said Roy Cherry, a vice president of research at Shuaa Capital in Dubai. Abu Dhabi Finance's 'Compass' product offers salaried, non-residents up to 75 per cent mortgage finance for investment in residential property in the capital. Self-employed investors are eligible for a maximum of 70 per cent finance. It said it expected its product to appeal to buy-to-let investors, in addition to those seeking equity release and remortgaging. "We know that there is a strong demand for mortgages for non-residents which we are now in a position to help to satisfy," said Philip Ward, the chief executive of Abu Dhabi Finance. The product would also provide an option for expatriates living in the UAE on a fixed term contract but who expect to be transferred to other destinations. Between 20 and 25 per cent of mortgages issued to home buyers in Abu Dhabi this year were from Abu Dhabi Finance, Mr Ward said earlier this month. It's 'Compass' mortgage offers a minimum loan of Dh250,000 ($68,064), with the maximum amount depending on an individual applicant's circumstances. Abu Dhabi Finance was launched last November with Dh500 million in start-up capital. Its original shareholders were Mubadala Development, Aldar Properties, Tourism Development and Investment Company (TDIC), Sorouh Real Estate and Abu Dhabi Commercial Bank. firstname.lastname@example.org