I am thinking about buying an apartment in Dubai. When I first considered this a few years ago, I had a deposit of 15 per cent. Now I cannot find a bank that will accept this deposit. Do you know any banks that are still lending this amount? WM, Dubai
The regulation for lending changed at the start of last year following a ruling by the Central Bank. Expats can now only borrow up to 75 per cent if the purchase price is Dh5 million or less. If the purchase price is in excess of Dh5m, the borrowing is restricted to 60 per cent. For someone buying a second property in the UAE, the loan to value will be restricted to 60 per cent regardless of the property value. For Emiratis, the maximum loan-to-value for a first property is 80 per cent for a value of up to Dh5m and then 75 per cent for larger valuations. For second and subsequent purchases they will be limited to 65 per cent. Furthermore, the maximum borrowing for any properties bought off-plan will be 50 per cent of the value for all borrowers.
Keren Bobker is an independent financial adviser with Holborn Assets in Dubai, with over 20 years experience. Contact her at firstname.lastname@example.org. Follow her on Twitter at @FinancialUAE.
The advice provided in our columns does not constitute legal advice and is provided for information only. Readers are encouraged to seek appropriate independent legal advice