A combination of tighter regulations by the UAE government in 2014 are making the residential real estate market in the country more stable and balanced.
So says Forbes on its website, taking an upbeat view of current market conditions. It states that Dubai and Abu Dhabi – the country’s two most popular cities for upmarket property investments – have now imposed stricter regulations on buyers and developers and thus plan to avoid the highs and lows of the 2011-2013 period.
Harald Finger, Senior Economist at the International Monetary Fund’s Middle East and Central Asia Department and Mission Leader to the UAE, explained: “Newly implemented regulations on loan concentration and real estate exposure for banks will help protect the soundness of the banking system, which has remained amply capitalized and liquid. The new loan concentration limits will help contain risks to banks’ balance sheets in the context of newly planned mega-projects.”
For real estate investors seeking to avoid housing bubbles, the new arrangements will be reassuring. The new maximum loan-to-value ratios for mortgage lenders will provide banks with a buffer against undue exposures, while also helping to limit the degree of speculation in the real estate market.
All this is of great interest as the investment period leading up to the Expo 2020 climax becomes ever shorter.