Dubai residents call for relaxation of mortgage rules

More than seven in ten people surveyed by broker Core Savills in Dubai believe mortgage caps should be relaxed.

Difficulty securing finance is the greatest deterrent to potential property buyers in Dubai the survey found – with one in four saying they are being hindered by the current rules.

“There is a major segment of tenants who are being kept away from ownership by the current regulations,” said Core Savills chief executive David Godchaux. “The issues of affordability and mortgage regulations continue to weigh down upon the buying intent of the mainstream tenants who would welcome relaxation of the current mortgage regulations.”

The Central Bank introduced a mortgage cap in late 2013 which restricted the loan-to-value ratio for mortgages at 75 per cent for expatriates and 80 per cent for Emiratis for properties below Dh5 million.

The survey covered more than 800 tenants in the emirate.

Half of the people interviewed expect the Dubai residential property market to recover over the next year.

Dubai Marina was the most favoured residential district while Downtown was in second place.

“As usual, in the context of softening prices we witnessed over the past two years, the flight to quality towards core locations has translated in a positive market sentiment for the prime apartment locations of Downtown, Dubai Marina and the Palm Jumeirah and the villa districts of Emirates Hills and Emirates Living,” added Mr Godchaux.

“On the flipside, areas such as Dubailand and Dubai South were perceived less likely to appreciate by participants.”

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