The United Arab Emirates plans to issue regulations governing the mortgage market in six to nine months, central bank governor Sultan Bin Nasser Al-Suwaidi said.
Directives sent last month to lenders restricting mortgages are meant to “draw their attention to certain standards that are expected to be adopted under the new system,” he told state-owned newspaper al-Ittihad. “The central bank is usually cautious,” he was cited as saying.
The central bank last month notified the banks of a decision to cap mortgages for foreigners and nationals at 50 percent and 70 percent of the property values respectively. The new rules will be discussed with the banks before they are adopted and should allow a higher lending cap for people who are planning to live in the home they are buying as opposed to those who are investing in real estate, the governor said.
“The new regulation that the central bank is preparing will make more liquidity available for the real estate industry,” he said. “The current system for real estate financing in the country hasn’t been changed.”