Dubai property deals steam ahead as bank holds mortgage cap

Published:  28 Jan at 6 PM
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Property buyers who withdrew from the market when Dubai’s Central Bank announced new lending criteria are rushing back in after the bank put the change on hold.

The recent move by the Central Bank to limit mortgage funds to 50 per cent of property values for expats and 70 per cent for nationals was aimed at eliminating speculators from the soaring property market. However, last week the bank announced the move would not come into force until the end of 2013.

Unsurprisingly, the announcement sent the emirate’s housing market into another spin, with those who had withdrawn offers on property rushing back into the market at full steam. The rush in now on to complete property purchases before the cap finally comes into force.

Dubai property experts believe the postponement of the cap with have exactly the effect the cap is being introduced to prevent, in that speculators will force property prices even higher than at present. Some industry experts, however, believe it’s too soon to predict another boom, as the market has slowed considerably since the cap was announced due to anticipation of a fall in property prices.

Better Homes’ Riaz Ahmed is certain that buyers will now have enough time to find a suitable property and finalise their purchases, and expects to see a huge rise in mortgage transactions between now and the final cut-off date. Other industry experts say the cap will only hit those who can stabilise the market, such as owner occupiers and first-time buyers, leaving speculators and investors to continue as normal as they normally have no need of mortgages.
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