New UAE mortgage cap pushes out end-users | GulfNews.com:
"There is broad agreement that the new mortgage rules announced by the UAE central bank would help prevent a re-run of 2008 in Dubai’s property sector. But a corollary of the new situation is that a large segment of potential buyers has been priced out of the market.
After much deliberations and controversies, the central bank capped the loan-to-value (LTV) limit at 80 per cent for UAE nationals and 75 per cent for expatriates for the purchase of the first house, with a limit on the multiples of annual income eligible for mortgage finance. The rules came closely on the heels of a doubling of property registration fees, from 2 per cent to 4 per cent, in a clear move to discourage flipping, which was the genesis of Dubai’s property crash that ended the unprecedented boom.
There is nothing unusual about these measures as property markets around the world have adopted similar steps to prevent overheating. In fact, Dubai’s moves are less stringent than the clampdown by the Singapore and Hong Kong authorities, faced with a threat to the stability of their respective markets."
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