The UAE property market has been suffering from a flood of new supply.
The UAE Banks Federation (UBF) is considering to ask the central bank to relax mortgage lending rules to stimulate a fragile real estate market.
Currently, first-time buyers of a home worth up to AED 5 million can only borrow up to 80 per cent of the property value if they are UAE citizens, while the cap is 75 per cent for residents.
The UAEBF’S retail banking committee has proposed that the limit be raised to 85 per cent for UAE nationals and 80 per cent for foreigners.
S&P estimated earlier this year that prices in Dubai could slip 10 to 15 per cent over the next two years. According to data released by the Dubai Land Department, Dubai property market transactions fell 16 per cent year-on-year in value in the first half of the year.
Subroto Som, Executive Vice President and Group Head of Retail Banking at Mashreq, said that the mortgage business has been picking up.
The current mortgage lending rules were introduced in 2013, at a time when property prices were on the rise, reported Reuters.