Called on banks to study the funding constraints in the sector to ensure that more funding is injected into the real estate sector, in order to activate the sales movement in the market, stressing the need for banks to relax their conditions to grant financing for the sector.
They pointed out to Emirates Al-Youm that there are things that are tightened by banks, including valuing the property undervalued, exaggerating the paper claims, the borrower's income verification procedures, as well as the length of the procedures for providing guarantees.
On the other hand, a banking expert said that the talk about the tightening of real estate guarantees for banks, unfair, the banks apply the standards of the Central Bank, including requirements relating to the customer and his credit score, and other related to the bank itself and its openness to finance the real estate sector.
"There is a shortage of lending by the banks in the real estate sector," said Al-Ruwad Real Estate Co-founder and CEO Ismail Al-Hammadi. "There is a reduction in the lending and financing values granted to companies and individuals as a result of the banks' And institutions in most cases, to protect against any sudden economic turmoil, especially with regard to the global market, which affects the movement of projects, and also coincides with the strictness of the requirements by banks in terms of paper claims, and evaluation of the property, and evaluation of dealers and other obstacles T Put by the banks ».
Al Hammadi pointed out that «the price correction witnessed by the real estate market, coupled with the package of new economic incentives approved by the government and visa systems for investors and retired cadres and residents, increased the increase in the demand for the purchase and ownership of real estate, raising the increase in the demand for mortgage loans to complete operations Which should be met with welcome at the level of banks, it is necessary to consider providing more facilities for the real estate sector and strengthen the policy of lending and mortgage financing by raising the ceiling of the value of funding and reduce interest rates ».
He pointed out that Dubai in particular has a range of mortgage and mortgage laws, more flexible and quick to respond to changes in the real estate market, which strengthens the confidence of local and foreign financial institutions and banks in the real estate sector. The real estate market in Dubai, In spite of the correction levels reached by the prices, which confirms the confidence of the banks in the real estate sector and its performance, especially that the process of registration of mortgages and the determination of value and repayment period, are under the management and supervision of the Department of Land and Luck, guarantees conditional on a reservation with full rights.
"The increasing confidence of the banking sector in the real estate sector increases investor confidence in the real estate market," said real estate expert Omran al-Sharhan. "The increase in facilities by the banking sector will increase market activity, but the tightening of banks by real estate dealers is possible." Can cause major problems for the real estate sector, although the price correction in the sector has made the prices reach good price levels, with the evaluation of housing units no longer a source of concern to the banks, as the value of the property has become a guarantee for him and why this fear of banks towards the sector?
He stressed that there is an urgent need, in the current period, to conduct studies on the real estate market, and the financing constraints facing investors in the market, noting that the easing of financing restrictions by banks will be in the interest of the sector. He called on banks to make more concessions by offering more financing programs and taking advantage of the shift in real estate, especially with the trend of many to own. He stressed that the next wave of real estate financing would be directed towards the middle segment of buyers who want to buy their first home for use The final (housing rather than investment).
"Banks are referred to as defaulting in the real estate sector," said Mohannad al-Wadiyeh, managing director of Harbor Real Estate Brokerage. "Banks are moving away from risk in real estate finance, which is permissible so as not to fall into trouble. The other side of easing the requirements for the lending process », calling for the need to reactivate the role of banks and their activities in real estate finance.
The banks do not provide any suitable financing solutions to buyers, unless the property is ready. The banks deal with the situation if the property is under construction, pointing out that the problem of financing the sector needs to combine efforts and carry out in-depth studies to maintain the circulation of market activity, Banks in financing problems related to the sector.
Banks are required to open the door to real estate finance dealers and not to comply with conditions that conflict with the nature of real estate investment, he said, adding that what is hardened by banks include exaggeration of paper claims related to the loan, which extends the period of borrowing between the application and approval, as well as the procedures of verification of income.
He pointed out that after the investor finishes this stage, the bank enters into another stage of the procedures, including evaluating the borrower's ability to repay according to the length of the repayment period, as well as the length of the procedures related to the provision of guarantees.
Waleed Al Zarouni, CEO of W Capital, said: "Banks are a prime driver of the real estate sector, as banking facilities are increasing the economic wheel in the sector. Most investors turn to banks when buying a new home. There have been reservations by the banks towards the real estate sector for some time, but these reservations are supposed to have expired in the current period or have fallen, especially with prices reaching levels that made the property a guarantor.
He pointed out that the requirements of mortgage finance contributed to the inability of many investors to buy real estate, regardless of their being citizens or residents, pointing out that the many procedures imposed by banks on the investor, contrary to the nature of real estate investment, which requires flexibility and ease of procedures, And strict procedures and measures related to determining the size and specifications of loans, terms and conditions of granting, follow-up and collection, which is one of the obstacles facing the real estate sector.
Mr. Abdul Karim Al Fahim, Chief Executive Officer of Stratum Asset Management, said: "One of the most important challenges facing the sector is the banks' reluctance to finance either the real estate developer or even the final consumer." He called on banks to increase the banking facilities of the sector, The demand for real estate purchases in the country, and that the situation currently needs more incentives and facilities that focus on revitalizing the real estate sector, noting that it is appropriate at the moment to conduct studies to meet the funding constraints facing investors in the market.
He said that the tightening of the banks comes despite the price correction in the market, which is supposed to reassure the banks towards pumping more funds in the real estate market, because banks always build their expectations in the evaluation of the property at least, considering this is one of the difficulties facing the sector now.
On the other hand, banking expert Awatif al-Hermoudi said that "banks are entrusted with depositors' funds and any decisions taken by the management of any bank must take into account the interests of their depositors." Which are committed to applying to the Central Bank, including the requirements related to the customer and his credit record and others related to the bank itself, and whether it is open to finance the real estate sector or not ».
"The laws in the UAE aim to preserve the interests of all parties, including banks and real estate dealers, and it is better to pay the buyer part of the value of the property, so as not to be affected by the market negatively, especially as the real estate, Price, and therefore can cause a problem for the bank mortgaged the property, in the event that the inability of the client to pay for the decline in the value of the asset ».
"Mortgages are relatively high in value, as opposed to car loans. For example, if a problem breaks out in the future, it could cause a mortgage crisis that banks can not afford," he said. "The buyer is in a good position if The value of the property is higher than the value of the loan.
She welcomed the proposal to hold a joint conference between real estate and bank officials to discuss how to overcome obstacles related to real estate finance, stressing the role of the Department of "land and property" in the role of mediation between the two teams.
"Banks in the UAE are providing sufficient support under the current market conditions and further easing may open up other potential risks," said Matthew Gregory, head of real estate sales at Dubai Real Estate. "Once the price correction cycle is complete, More open to encourage buyers to invest, for example by reducing initial payments and fees. "
He pointed out that the market needs to encourage a wider group of investors to enter the real estate market, including end users who choose to buy for housing instead of renting during their stay in the UAE, these new buyers are active market.