New mortgage system could boost recovery in UAE

18/03/2011 - Dubai Investment News Posted by Neil King
New mortgage system could boost recovery in UAE

The UAE is considering proposals to introduce a new mortgage system, which could aid property market recovery in the country.

A study has been launched to see how a new system, based on an approach utilised in Denmark, would benefit the UAE's market.

Dr Nasser Saidi, chief economist and head of external relations at the Dubai International Financial Centre, has claimed that the system could be up and running within the next 18 months.

"Sustained recovery of the real estate sector is essential for the revival of growth in the region. The underlying economic fundamentals and demographics are positive. However, reform and development of housing finance are necessary for the medium and long-term recovery of the real estate sector," he commented.

"We have proposed the set-up of a mortgage securitisation mechanism to create a market similar to the Danish mortgage market … [which could] reduce the risk and exposure of real estate developers and lending institutions."

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