Central Bank urged to commit more funds to property

19/02/2013 - Dubai Property News Posted by Bob Brunskill
Central Bank urged to commit more funds to property

Major lenders in the UAE have urged the country's Central Bank to make more money available for property purchases.There have been a number of proposed reforms in the mortgage industry and banks could soon be forced to cap the amount of cash they lend to real estate buyers.It is unclear at this stage if or when these changes will take effect in Dubai, but the Emirates Banks Association - which includes HSBC and National Bank of Abu Dhabi - has now called for more flexibility on mortgages, the National reports.The group wants mortgages to be separated from other types of property loans and has also asked the Central Bank to increase the ratio of deposits they can lend to customers to 20 per cent.Chairman of the Emirates Banks Association Abdul Aziz Al Ghurair told the news provider: "We want mortgage lending to be set aside from property because it's completely different from commercial properties and shopping centres."Mortgage lending has risen sharply in Dubai in the past year, as the property sector has continued to make a remarkable recovery since the economic downturn of 2008-09.The demand for property loans increased by 4.8 per cent in the third quarter of the year when compared to the corresponding period in 2011, while deposits climbed by 12.3 per cent in the 12 months to November.Regardless of what happens in the mortgage sector, the clamour for property investments in Dubai is likely to remain intense.A recent investigation conducted by Arabian Business showed that a huge number of residential and commercial plots were purchased with cash in 2012.Indeed, $30 billion (AED 110 billion) was used to pay for buildings up front during the course of the year, which was the equivalent of 70 per cent of all real estate transactions in Dubai.Wealthy investors from within the Gulf Co-operation Council and from nations like India, Russia and the UK, among other countries were clearly very keen to add new Middle Eastern assets to their portfolios last year.Looking for apartments for sale in Dubai? Let The First Group help you out