Jun 18 2009
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Major developers in UAE likely to provide own financing
Thursday, Jun 18, 2009
Dubai: Major developers in the UAE will eventually be able to offer their own home financing to buyers for units in their projects, industry experts say.
Although lending has started again in the market, it remains sluggish and there are only a limited number of financing options, especially for mid-income earners.
"Availability of mortgage financing is a critical issue. It's still very limited. Amlak and Tamweel are not doing any new lending, at best they are meeting their commitments they are already involved in," said Charles Neil, chief financial officer at Landmark Properties during a Dubai Property Society meeting on consumer finance.
Dubai Islamic Bank (DIB) just revealed that it is now offering up to 90 per cent financing on both ready and under-construction properties across the UAE.
That's news to everyone who thought a 75 per cent loan to value was the maximum and only in Dubai and only for certain developers and certainly not for incomplete projects.
Adnan Chilwan, chief of retail and business banking at DIB , could not be reached for comment.
Mortgages for off-plan projects are at a virtual standstill due to a lack of confidence and Dubai's Land Department has its work cut out with a number of issues between buyers of off-plan units and the developers.
Projects in the UAE that have been delayed or placed on hold have reached a collective value of $355 billion (Dh1,303 billion), thereby exceeding the total value of projects that are under way at $254 billion, according to industry reports.
The total freehold property market in the UAE, including Abu Dhabi, is valued at about Dh325 billion. Around 16 to 17 per cent of this is generated by mortgage providers, according to Faisal Iqbal, head of secured assets at Barclays bank.
However, even if prices continue to fall, they will mean nothing without adequate mortgaging options available.
By Suzanne Fenton, Staff Reporter
© Gulf News 2009. All rights reserved.
© Copyright Zawya. All Rights Reserved.
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