Dubai banks considering mortgages for overseas buyers
A number of Dubai banks are close to launching a new mortgage product targeted at overseas investors looking to buy property in the emirate, it is claimed.
Mortgage financing in Dubai ground to a halt after the global credit crisis caused prices to plunge by more than 60% and forced the UAE’s two biggest mortgage providers to stop lending for almost two years.
Now lenders are keen to attract more overseas buyers and new mortgage products are regarded as one of the best ways of doing this.
‘We have now got three, maybe four, banks who are interested to financing certain people who are non-residents,’ Jean-Luc Desbois, managing director of Dubai based mortgage consultancy Home Matters told Arabian Business.
Desbois said banks were increasingly returning to the mortgage market and were looking to overseas clients to stimulate growth in the saturated lending market in Dubai.
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‘Confidence is returning with the banks. They are looking further afield because of the competition here. There are nearly 27 banks lending here but they are predominantly lending to residents in the UAE so if you want to differentiate yourself you have to look further afield where you are in a smaller pool of lenders,’ he explained.
The market has been particularly buoyant for villas, according to Desbois. ‘The villa market has been performing very well over the last 15 months. Now there is real momentum and prices have increased by 25 to 30% since January last year,’ he added.
Emirates NBD, Dubai’s largest bank by market value, said last year it was mulling the launch of a mortgage product aimed at attracting foreign investors after the UAE federal government moved to extend property visas for up to three years.
The bank said it may follow in the footsteps of home loans company Tamweel and offer mortgages on completed houses to lure overseas buyers back into the market.
The UAE government said in June 2011 it would extend three year visas to owners of properties worth AED1 million or more, replacing existing visas that require renewal every six months.
Tamweel said in July 2011 it would offer loans on completed homes in Dubai and Abu Dhabi, worth between AED1 million and AED5 million.