Expatriates still face considerable challenges finding suitable accommodation
Thursday, January 10, 2013
Millions of people all over the world travel to foreign countries for work, business travel and to seek a higher quality of life. While Middle Eastern emirates such as Dubai have long been attractive to expats, government regulations make finding suitable accommodation difficult for many international arrivals, despite the prevalence of furnished extended stay apartments and corporate lodging. According to Albawaba Business, expats could face additional challenges as the government announced there will be no changes to the region's current mortgage laws.
Maintaining the status quo
The news source reports that the central bank of the United Arab Emirates (UAE) will not revise existing policies limiting mortgage credit in the area, which some experts believe could create a real estate crisis in the near future.
Officials at the bank implemented the new restrictions toward the end of 2012, after noticing a sharp increase in the amount of mortgage lending. Regulations were introduced limiting lenders to offer mortgages to expatriates at 50 percent of the housing unit's value for the first property, and 40 percent of the property value for additional units. The prevalence of serviced apartments and corporate housing in the UAE and the new regulations could have serious ramifications for the real estate market in the region.
"We do not expect the central bank to revise its decision to cap mortgage credit... the central bank fears a fresh wave of speculation and deemed it necessary to put pressure on the banks to prevent them from lavishing mortgage credit amidst a surge in demand for property financing," said a senior banking official who wished to remain anonymous, as quoted by the news source.
However, while some officials greeted the news with skepticism and concern, others believe that the measures could prevent further rent increases for expatriate workers and prevent substantial hikes in property values.
The allure of the East
While the property legislation imposed by the UAE central bank may be of concern to real estate developers and expats, other countries are proving attractive to international travelers. According to China.org.cn, Shanghai has seen a 6.7 increase in the number of expatriates moving to the city.
More than 173,000 people moved to Shanghai last year. Some may have chosen to purchase property on a previous visit, while many expats opt to stay in short term rental apartments and temporary housing while they search for suitable accommodations. More than one-quarter of China's permanent resident visas have been issued in Shanghai alone since the Chinese government introduced the program in 2004.