Central Bank Governor Sultan Nasser Al Suwaidi said new restrictions on mortgages may be changed after protests by the nation's lenders.
Al Suwaidi says Central Bank may change mortgage limits
The Central Bank Governor said new restrictions on mortgages may be changed after protests by the nation's lenders.
The central bank issued rules on December 30 that restricted mortgages for expatriates to 50 per cent of the value of a first home and 40 per cent for the second. Limits also were tightened to Emiratis to 70 per cent of value for the first dwelling and as much as 60 per cent for a second, from no limit previously.
"The central bank is not taking a binding position and is listening to what the banks have to say," Sultan Nasser Al Suwaidi said at a conference in Abu Dhabi. "What was published was not an order. The system that will be put in won't necessarily be according to the per centages that we published."
Banks are lobbying to increase the loan amounts to spur a recovery in credit growth four years after Dubai property prices crashed amid the global financial crisis. They're recommending the central bank raise the limits for expatriates to 75 per cent of the value of a first home and 60 per cent for the second. UAE nationals should be able to borrow 80 per cent of the home price for the first mortgage and 65 per cent for second homes.
"What was published was not an order, it was a notification," Mr Al Suwaidi said.
* Bloomberg News