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More bad news : Bank raises expat salary limit for loans by 200%

Discussion in 'Dubai property' started by dubai freelancer, Jan 15, 2009.

  1. dubai freelancer

    dubai freelancer New Member

    Taken from arabianbusiness.com :

    Emirates NBD, the largest bank in the Middle East, has hiked the minimum salary limit for expatriates seeking a mortgage by more than 200 percent and doubled the threshold for locals, Arabian Business can reveal.

    In a tightening of its lending policy, the bank, which was formed by the merger of National Bank of Dubai (NBD) and Emirates in 2007, is only considering expatriate customers for a home loan if they earn a minimum of 25,000 dirhams ($6,800) a month, up from a previous limit of 8,000 dirhams.

    Emiratis must now earn 20,000 dirhams a month, up from 10,000 dirhams.

    A spokesman for the bank refused to comment on Wednesday, but added: “These [lending policies] are regularly changed according to market conditions.”

    The change in lending policy from Emirates NBD, which was introduced last month, will exacerbate the problem of mortgage availability in the UAE, making it even harder for low to middle income earners to secure financing to buy a home.

    It comes two months after an internal Emirates NBD email was leaked to Arabian Business which stated that the bank was suspending loan facilities to all expatriate employees of real estate companies, who are currently laying off thousands of staff due to a slowdown in the industry.

    Emirates deny this is company policy, despite sources inside the bank who have repeatedly told Arabian Business that the decision to not to lend to expats at property companies is still firmly in place.

    Other banks in the UAE are reigning in their lending criteria as well. In November, it emerged Lloyds TSB had raised the monthly salary limit for a personal loan from 12,000 dirhams to 25,000 dirhams.

    In the same month, HSBC doubled the minimum salary someone must earn to qualify for a mortgage from 10,000 dirhams to 20,000 dirhams.

    The UAE government has moved to ease the liquidity situation. At the end of Sept, the UAE Central Bank unveiled plans to pump $13.6 billion into the banking system. Three weeks later, an extra $19 billion cash injection was announced.
     
  2. samsaf

    samsaf New Member

    Don't forget the situation in the US is still uncertain and it's good news if the banks are giving mortgages at all! They are into the "big deals" meaning people who own around 25,000 are the buyers for houses of +2M Dirhams or more.

    Give it till march.. I think those "new rules" will be much softened.. unless the international market situation doesn't get worst.
     
  3. Wannaberich

    Wannaberich New Member

    The more difficult the banks get the worse the situation will become in Dubai regards property prices.
    The fewer people who can get mortgages,the more prices will collapse.
    At the moment its bad enough and looks like it could get a whole lot worse.
    The only positive note is that more people will rent thus protecting rent prices to a point.
     
  4. natpudan

    natpudan New Member

    the rent prices can only sustain for a shorter duration since when people find it difficult to manage, they will leave the country. Then rents will definitely start falling.
     
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