“Everywhere
else in the world, governments (through the lenders) are trying to ease
the burden on homeowners and rates have fallen dramatically. In Dubai,
it's not as competitive and the lenders seem to behave in a very
different way.”
He accused banks, many of which charge up to 8
percent interest on monthly home loan repayments, of lending far above
the base rate of 2.5 per cent.
“That's a pretty high spread for
what are usually prime borrowers, even if you want to pay back the loan
they charge high prepayment penalties,” he added.
“Banks here
are quite profitable and with loan growth slowing and losses climbing,
there may be a tendency for them to maintain high margins rather than
pass on the benefits of cheaper government liquidity,” he told
Cityscape Intelligence.
He said there was a "gap in home
financing" due to the lending restrictions facing Amlak and Tamweel,
which make up around 60 percent of the market.
Source: Arabian Business
