Government decision sees investors return to Dubai

28/01/2013 - Dubai Property News Posted by Neil King
Government decision sees investors return to Dubai

The demand for property investments in Dubai is set to rise sharply, after the government announced that any potential cap on mortgages would take a while to implement.Some people had put their purchasing plans on hold because they were concerned that the UAE's banks would not lend them enough money.Last month, the UAE Central Bank urged lenders to prepare for a new cap system, whereby expats would only be able to borrow 50 per cent of their property's value, Emirates 24/7 reports.The organisation also plans to limit mortgages for UAE locals at 70 per cent of a building's asking price.However, the Central Bank has now confirmed that any mortgage restrictions are unlikely to come into force until the end of the year.Understandably, this has encouraged investors to snap up vacant properties before the cap takes effect, so there is likely to be plenty of buying activity in the next few months.Head of research for the Middle East and North Africa at Jones Lang LaSalle Craig Plumb told the news provider that it is good to have more clarity on the situation."It's possible that this will stimulate more sales ahead of the imposition of tighter restrictions later in the year - this would of course be the opposite of what the Central Bank is trying to do, which is to slowdown the level of activity and subsequent pressure on prices," he remarked.Mr Plumb said there has already been a positive response to the bank's announcement and investors are "showing signs of confidence again".Dubai's real estate sector has been performing extremely well of late and the Dubai Land Department confirmed last week that 2012 was a record year for the industry.It revealed that AED 154 billion worth of buildings changed hands last year, which was an eight per cent increase on 2011.Overall, 41,767 transactions were finalised in the city throughout the 12-month period - up from 35,297 the year before.Looking for properties for sale in Dubai? Let The First Group help you out