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Posted On: 26 May 2009 09:03 am
Updated On: 12 November 2020 02:09 pm

Banks restart mortgage lending

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After a lull of several months since the onset of global recession, banks here have restarted disbursing mortgage loans for properties which foreigners are allowed to buy, cheering up developers and buyers alike. Demand for housing in this particular high-end segment had suffered a severe blow since the economic slowdown began late last year as the brunt was mainly borne by the construction industry. But with the local banks having resumed lending to the sector some two weeks ago, the industry has begun looking up, albeit gradually, real estate operators said here yesterday on the sidelines of a mega industry show that kicked off at the Qatar International Exhibition Center. “The demand is picking up now, keeping us busy once again,” an official from Retaj Marketing and Project Management, a prestigious real estate agency associated with the Pearl Group, said, asking not to be identified. Senior banker, Nabil Nakhle, from IBQ, confirmed in remarks to this newspaper that the banks were indeed back to mortgage lending although they were still treading with some caution and assessing risks very carefully. At his bank, for example, he said the mortgage team had risk management experts to make sure a potential borrower was going to a ‘safe’ developer. According to him, Qatari banks are not overexposed to the real estate sector due to close monitoring by the central bank and the restriction of property lending portfolio of a bank not exceeding 15 percent of its total advances. So, as people are gradually coming to grips with the recession and realising that the wheel must be turned, the situation (of lending as well as spending) is easing, he suggested. “The situation here is not like Dubai where real estate exposure of banks literally spun out of control in excitement over the market doing so well,” he said. They did not expect a sudden bubble. The Retaj official said much of the demand for high-end housing here is coming from other GCC nationals, Russians and other Europeans. Many of them are based here but some are not. Nakhle said his bank, for instance, gave mortgage loans for up to 25 years depending on the fact that an individual applicant did not cross the age of 67 years during this tenure period. Asked if the standard down payment in mortgage loans was 20 percent of the value of a property, he said there was no hard and fast rule and the percentage depended on several factors.