Dubai, the desert sheikdom where home prices have plunged 65 percent since 2008, risks re- inflating its property bubble with the help of mortgage lenders offering easy terms and the lowest rates ever.
“I don’t like it when I see mortgages going back to 90 percent lending, that’s not good for the industry,” said Abdul Aziz Al Ghurair, head of the United Arab Emirates’ Bankers’ Association and chief executive officer of Dubai’s Mashreqbank PSC. (MASQ) “We don’t want to encourage people to gamble.”
Banks slashed interest rates to the lowest on record and reduced down-payment requirements this year as borrowing rose and home prices rebounded in parts of Dubai. HSBC Holdings Plc (HSBA)’s Middle East unit offers some of the lowest rates at 3.99 percent, down from a high of 9.5 percent in 2009. Standard Chartered Plc and Barclays Plc have similar rates with deposits of 15 percent to 20 percent.
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