The Central Bank of the United Arab Emirates (UAE) has directed the nation's financial institutions to cap mortgage lending for expatriates at 50% of the property's value.
According to a report by Emirates 24/7, the lending cap for expatriates is also being capped at 40% for a second housing unit. For UAE nationals, the mortgage rate is being cut to 70% for a first property and 60% for a second unit. The new Central Bank directive is a first for the UAE, which previously had no official cap on mortgage lending.
Although the Central Bank did not offer an official explanation on its directive, it is believed the new rules are designed to limit international speculators who might be targeting the local property market, particularly in the Dubai market.