The Central Bank has referred its draft law on mortgages back to the UAE's banking sector for consultation.
Central Bank refers mortgage cap draft back to UAE lenders
The Central Bank has referred its draft law on mortgages back to the UAE's banking sector for consultation, in the first sign of progress following months of board-level discussions on how to regulate the local property market.
The UAE's banking regulator said lenders would be consulted for the second time since its announcement last year that it was seeking to cap mortgage loan-to-value ratios.
"The board reviewed the draft mortgage loans regulations, and decided to refer the regulations to the concerned institutions for consultation," the Central Bank said in a statement, without giving further details.
The Central Bank also said it had approved a proposal for its risk management framework, declining to give details.
At the end of December, the UAE's banking regulator distributed a circular to local banks in which it detailed plans for a cap on loan-to-value limits, with first-time expatriate buyers expected to put down half of a property's value as a deposit when seeking a home loan.
After an outcry from banks and property firms, the Central Bank clarified that the limits were not binding and issued a questionnaire to commercial lenders.
The Central Bank has until now given few signs of progress on the mortgage cap at any of its three most recent board meetings.
In the meantime, the Dubai property market has surged, with all-cash purchases and speculative buyers of under-construction properties returning in droves.
The UAE Banks Federation, which is leading the banking sector's negotiations with the Central Bank on the issue, declined to comment yesterday.