Clients of the developer could get home loans of up to 90 per cent and a 25-year repayment period.
Deyaar and banks in mortgage pact
Deyaar Development has teamed up with local banks in its latest move to offer its clients more favourable financing, in some cases lending up to 90 per cent of the property cost with repayment periods of up to 25 years. "These strategic alliances with the UAE's leading financial institutions ? demonstrate the confidence and belief that key financial institutions have in Deyaar's ability to deliver on its commitments," said Markus Giebel, the chief executive of Deyaar. Customers will, subject to meeting the banks' requirements, be able to take advantage of the loans plans for properties developed by Deyaar and have been assured of quicker approvals. The banks involved include Noor Islamic Bank, Dubai Islamic Bank, Abu Dhabi Commercial Bank, RAK Bank and Emirates Islamic Bank. While the exact terms and conditions will vary according to the project and financing requirements, the banks will offer more than 80 per cent financing, mainly on finished properties. "All the developers are having to think of plan B," said Chris Dommett, the chief executive of the independent mortgage advisory firm John Charcol. "They started with the same model with selling plans and assuming prices will go up, and now they realise that people no longer have money to pay and banks are reluctant to lend. Developers have to start working much harder to put financing schemes in place." Mr Dommett said the arrangement with the banks was a great idea because it was a struggle for borrowers to secure financing of more than 80 per cent. Dubai Islamic Bank will provide up to 90 per cent financing for UAE nationals, while expatriates wishing to buy Deyaar property can receive up to 80 per cent financing. Noor Islamic Bank is offering up to 85 per cent financing for UAE nationals and 80 per cent for expatriates. ADCB and RAK Bank will provide up to 80 per cent finance on all Deyaar projects. Other developers have designed similar financing schemes to help clients, including Emaar Properties, which released a second portfolio of properties under its rent-to-own scheme that was launched last November. The move allows customers to lease residences in Downtown Burj Dubai for one year with the option of buying the property or renewing the lease. Union Properties, Dubai's third-largest developer, was among the first to come up with a similar rent-to-own scheme. "It is inevitable that developers need to get involved and help buyers," Mr Dommett said. "By doing this, developers are not only trying to help clients but also their own cash flows. They should have done this right from the start." email@example.com