Proposal for UAE mortgage caps backed by leading property developer and analyst
The proposed mortgage cap from the UAE Central Bank has received a strong endorsement from leading real estate experts in Dubai, quelling fears about its impact on the market.
During a press conference for Damac Properties, Hussain Sajwani, chairman of the luxury development group, said that the mortgage law would deter speculators and attract only serious investors.
“I think we want serious investors who’ll put serious equity on the table. I don’t think the market wants an investor who’ll put in 5% and speculate. That’s what caused the problems, and I don’t think the market needs those kinds of investors. We need genuine investors, who will put a cheque on the table,” Sajwani told Big Project ME.
Nicholas Maclean, managing director of CBRE Middle East, added that the agreement would have a positive effect on the market, especially if the Central Bank implemented the recommendations from the Emirati Banks Association and local banks.
“There were some very interesting components to their response (to the Central Bank proposal). Between the two institutions, I think they have the same motivation, which is to make the market here more sustainable and steady. I think that’s to be applauded,” he told BPME.
He added that he saw the introduction of mortgage caps as an opportunity for the market to open up the real estate market in the UAE and provide alternative sources of funding for the economy.
“Borrowers tend to be end users, not speculators, so I think it’ll be positive for the economy. With foreign nationals coming into the market now, I think it’ll be a great opportunity for the market because it gives the UAE access to other forms of funding, and gives them the opportunity to expand the occupation here,” he said.
“I think foreign nationals coming into the market here, particularly if they’re here to make a contribution to the economy, is very important. The fewer restrictions on people coming to work here, the better, because they feed other components of the economy: retail, schools, hospitals, etc. Expansion and confidence that brings people here is very important to the local real estate market,” Maclean explained.