A new ceiling on lending is yet to be put in place…
A cap on real estate lending in the UAE has been lifted by the Central Bank of the UAE, the chairman of the UAE Banks Federation said.
Previously for real estate loans, a 20 per cent deposit was required to secure a loan, however this law was abolished last month said Abdul Aziz Al Ghurair. As of yet, a new cap has not been imposed.
However, a new cap could be looming as Mr Al Ghurair explained that his federation has liaised with the central bank on ‘what should be defined as real estate’, reports Gulf Business. It is then for the regulator to decide what limits should be introduced, he said.
“Flexibility is now with the central bank and it may come back and change [the cap situation] from year to year depending on the performance of real estate,” said Ghurair.
“Now that [the cap] is lifted the central bank may say 10 per cent, or 20 per cent or 30 per cent overnight.”
Currently, no timeline has been given for the regulator classifying which loans are defined as ‘real estate sector loans’ in the UAE, or imposing a new cap.