Abu Dhabi Finance mulls lending rate cut
Abu Dhabi, April 22, 2009
New mortgage lender Abu Dhabi Finance, a consortium of five Abu Dhabi companies, said on Wednesday it may cut lending rates, possibly stimulating demand.
"We have seen great demand for mortgage finance at Abu Dhabi Finance," the firm's chief executive Philip Ward said in a statement.
"If the EIBOR (Emirates Interbank Offered Rate) remains at its current level or declines further we will look at potentially reducing our interest rates, which could stimulate even more demand."
The property market in the UAE has slowed due to the global economic slowdown, with Dubai particularly hard hit as billions of dollars of projects are cancelled or delayed and jobs are slashed.
But Abu Dhabi is faring better thanks to its extensive oil reserves and this week real estate firms launched multi-billion dollar projects at a property conference in the emirate's capital.
"There is enormous demand for real estate in Abu Dhabi and consequently the Abu Dhabi mortgage market is in good health with a number of active lenders in the market," Ward said
Abu Dhabi Finance, launched in November, provides financing for up to 85 percent of the value of property with minimum salary requirement starting from 10,000 dirhams ($2,723) per month, the statement said.
The company was set up by Abu Dhabi Commercial Bank, Aldar Properties, Sorouh Real Estate, Mubadala and Tourism Development Investment Company (TDIC).
It provides mortgage finance for properties developed by four of the major developers in Abu Dhabi -- Aldar, Sorouh, TDIC and Capitala -- which account for up to two thirds of the property market in the emirate.
It is in negotiations with several other developers to cover the remaining third, Ward said. -Reuters