Emirates Islamic Bank to offer 100 per cent mortgages

Emirates Islamic Bank has announced the launch of deposit-free mortgages, as banks resort to ever more desperate measures to entice buyers back into the housing market.

Emirates Islamic Bank is to offer 100 per cent mortgages to UAE nationals, as banks attempt to jump-start a languid property market.

The new loans can be used for purchasing existing properties or for buying off-plan, the bank said.

"For most people, owning a home is one of the biggest lifetime investments and provides an opportunity to build equity in real estate," said Faisal Aqil, the general manager of retail banking at Emirates Islamic Bank.

The mortgages charge variable rates beginning at 4.99 per cent, and can be approved within 24 hours.

Housing prices fell after the bubble of cheap credit that financed Dubai's construction frenzy during the early and middle part of the last decade was pricked by the global financial crisis. Since then, only scant signs of recovery have emerged in the local property sector.

Dubai house prices rose by about 0.5 per cent last year, according to data from the estate agent Knight Frank.

However, the same index recorded a 6 per cent dip in house prices during 2010 and a plunge of 42.1 per cent during 2009.

Last year, a price war in mortgage interest rates was sparked by United Arab Bank, which was quickly entered into by lending giants including Standard Chartered and HSBC.

Still, mortgage transactions remain at a fraction of their pre-crisis peak, according to bankers.