suggests that usage of online services to acquire residential loans is likely to increase in 2014. However, the newly introduced mortgage law could narrow down choices for customers – the exact impact of this is yet to be known.
The year 2013 proved to be phenomenal for property markets in GCC countries with many new projects and announcements in the pipeline – the Expo 2020 takes the euphoria to the next level. What does it mean for customers who look for residential properties, and banks that provide financing?
an online banking solution portal based in the UAE, observes that online banking platforms are increasingly using their 'e-banking capabilities' as a selling point, plus, a large portion of customers are using
online banking as a payment gateway - this continued development is likely to fuel the trend of using online services for banking needs.
Speaking about the USP of banking products as seen in the last year, a Bayzat Co-Founder
, Talal Bayaa
said, “Most banks offered very similar product solutions. They typically finance properties in Dubai and Abu Dhabi both by the major freehold areas (including the smaller developers) and by major developers (including almost all their developments).”
Having said that, few banks stood out for offering unique services:
Emirates NBD: Emirates NBD provided the most flexible personal loan solutions. Whereas most banks will require the borrower’s employer to be on an ‘Approved Company List’; Emirates NBD targets a wider demographic for personal loans. Coupled with their competitive rates, they are doing a great job of meeting unmet demand in this segment. In terms of the down payment, maximum loan amount and interest rate, they provide slightly better than average terms compared to other banks.
RAKBANK: RAKBANK has provided some innovative savings and checking account solutions. More importantly, they have really developed a strong online application system to minimize the need for potential customers to physically walk into a branch.
MASHREQ: Mashreq provided home loans to non-residents living in Qatar, Bahrain, Kuwait, Saudi Arabia, India and the United Kingdom.
NOOR ISLAMIC BANK: Noor Islamic Bank provided financing for specific off-plan properties, which is an area many banks have shied away from.
Mortgage Law Challenges
The most common question posed to Bayzat was regarding the requirements for obtaining a mortgage. This indicates that there is a lack of transparency in the process; and this has been a great opportunity for us.
The new mortgage law has yet to be enforced by the banks. The majority of the industry thought the law would come into place in December, yet the Central Bank has yet to put it into practice (i.e. Many banks still offer mortgages with a 15% down payment).
A key challenge for individuals is the lack of choices for a home loan. The majority of banks will require the individual’s employer to be on the ‘Approved Company List’; this means that most individuals will only be able to choose between one or two banks for a mortgage.
According to Bayzat Co-founder
, Talal Bayaa, "mortgages will make the most headlines – it will be interesting to see when the new law comes into effect, and how it will be enforced by the Central Bank. It will be difficult to assess the exact effect of the new mortgage law as other measures (such as increased property registration fees) are being implemented simultaneously."
is an online platform that provides a fast and easy way to find a banking product. The homegrown company provides accurate information on everything to do banking, allows for personalized searches and provides an interactive platform to answer banking queries. More than 30 banks’ product information can be found on bayzat
and includes special promotions, best interest rates, comparison charts and rankings to make the decision making process simpler. An interactive platform is also available where users can ask any banking related questions and the team provides factual feedback and info.