Emirates such as Dubai and Abu Dhabi are major and growing destinations for the expatriate community with low tax rates and a high standard of living. However, new rules on mortgage borrowing in the United Arab Emirates mean that buying property in the region is about to become much more difficult for expats.
The new restrictions mean that banks will only be able to offer loans to expats up to 50% of a property’s value. This compares to 70% for Emirati citizens with the move designed to limit foreign investment in the UAE property market to limit the creation of another property bubble.
However, there are fears that the new regulations will simply hit regular expat consumers with many high end investors that drive the property market using external sources of funding on cash.
Not everyone is worried though with Mark Stott, CEO of Select Property, telling The Telegraph, “The market for overseas buyers remains small so we don’t necessarily believe these unconfirmed changes will slow down growth.
“If these changes do happen, then we’d expect to see an increase in the rental market with more people choosing to rent a property rather than buy. With rental yields standing at between eight to 10 per cent, this presents property investors with a sensible option.”