The head of the central bank in the United Arab Emirates said new restrictions on mortgages may be changed after protests by the nation’s lenders.
The central bank issued rules on Dec. 30 that restricted mortgages for expatriates to 50 percent of the value of a first home and 40 percent for the second. Limits also were tightened to citizens to 70 percent of value for the first dwelling and as much as 60 percent 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,” Governor Sultan al-Suwaidi said today 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 percentages 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 percent of the value of a first home and 60 percent for the second. U.A.E nationals should be able to borrow 80 percent of the home price for the first mortgage and 65 percent for second homes.
“What was published was not an order, it was a notification,” al-Suwaidi said.