The circulars sent by the Central Bank setting the maximum value of mortgages for foreigners and nationals at 50% and 70% of the property values respectively are meant to only notify the banks that there is something to be introduced, according to the governor of the apex bank Sultan Bin Nasser Al-Suwaidi.
Al-Suwaidi, in statements to Abu Dhabi TV, made it clear that the circular sent to the banks on December 29,2012 does not set a date for enforcing the proposed regulations, adding that this is meant to give the banks enough time to adapt with the new reality to come with the issuance of the new system in the future.
The proposed regulations, however, will be effective after due consultations will have been made with banks whose feedback should be taken into consideration, Al-Suwaidi noted.
"Currently, there is no such system regulating real estate financing for individuals. This is now a proposed system to be issued in 6 to 9 months depending on when special procedures will be implemented. What has been issued now is a kind of consultation with the banks," he clarified.
"We are not talking about percentages now. These are regulatory matters and are within the jurisdiction of the board of directors of the Central Bank, because the banks demand percentages be changed." Al Suwaidi said.
The Central Bank of the UAE will regulate the mortgage market in six to nine months, the governor of the Central Bank Sultan Bin Nasser Al-Suwaidi said.