New mortgage rules have been rolled out by the UAE Central Banks for those buying property in Dubai, propertywire.com reports.
The rules have been rolled out in the hope of avoiding a similar property boom and bust cycle as witnessed in the mid 2000s, where prices soared before plummeting when global finances became unstable. It will see mortgages only offered to those with high enough deposits, although the total percentage needed will vary for different circumstances.
UAE nationals buying their first property will be permitted a mortgage of up to 80 per cent of their home's value. Anything over Dh5 million (Â£854,275), however, will see mortgages capped at 70 per cent. Anyone buying their second home, meanwhile, will need to stump up a larger deposit as only 65 per cent will be offered as a loan.
Non-nationals will have a similar setup, although will be expected to find even larger deposits. Those buying their first property of Dh5 million or less will be permitted mortgages of up to 75 per cent. This then drops to 65 per cent for anything above the five million threshold and falls again to 60 per cent for second homes.
For all buyers, mortgage periods will be capped at 25 years. In addition, no nationals will be permitted a new loan if they are over the age of 70, whilst the age limit for non-nationals is set at 65.
Where payments are concerned, mortgages will not be offered if they amount to more than 50 per cent of an applicant's monthly income.
Commenting, Dubai Land Department director general, Sultan Butti Bin Mejren, told gulfbusiness.com: "Dubai will strictly enforce existing rules and, if necessary, set new ones to prevent another bubble from forming in its property market, while cracking down on abuses by real estate brokers.
"What we're trying to maintain is a sustainable growth in the real estate sector over the coming five years."