Mortgage lending plan goes to UAE central bank

Updated 07 February 2013
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Mortgage lending plan goes to UAE central bank

ABU DHABI: Banks in the UAE have proposed amendments to rules capping mortgage lending which aim to prevent bubbles from forming in the real estate sector, a banking industry body said.
Real estate prices in the UAE, particularly in Dubai and Abu Dhabi, collapsed after the bursting of a bubble in 2008, with prices falling more than 50 percent from their peaks.
At the end of last December the central bank unveiled limits on residential mortgage lending. The announcement caused a furore in the industry as many bankers felt the curbs would stymie a nascent recovery in property prices, and complained that the rules were introduced without warning — though the central bank subsequently said they were merely a starting point for discussion.
The Emirates Banks Association said in a statement that it had submitted a unified proposal to the central bank on Monday following discussions with member banks.
Proposals relating to loan-to-value (LTV) ratios were in line with those outlined by EBA chairman Abdulaziz Al-Ghurair last month; the EBA wants lending for first homes capped at 80 percent for UAE nationals and 75 percent for expatriates.
The LTV for subsequent homes would be 65 percent for UAE nationals and 60 percent for expatriates.
The original central bank circular had said mortgage loans for foreign individuals should not exceed 50 percent for first homes and 40 percent for subsequent ones, with the caps for UAE citizens set at 70 percent and 60 percent.
The EBA also made proposals this week relating to maximum financing, which would be limited to eight years' salary or total income for citizens and seven years for expatriates, as well as length of mortgages, which would be capped at 25 years.
Other areas addressed included making repayments directly linked to salary or other verifiable regular sources of income but excluding end-of-service benefits, as well as collateral, interest and fees.
The central bank said recently that it now planned to introduce new rules for the mortgage industry in about six to nine months.


Taxi drivers, Uber square up on Istanbul’s roads

Updated 22 April 2018
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Taxi drivers, Uber square up on Istanbul’s roads

  • Uber has enjoyed soaring popularity in Istanbul, where users appreciate the cashless payment system, security and convenience of hailing a cab by phone
  • This has stoked antagonism with official taxi drivers, who have brought legal cases in Istanbul in a bid to have the app blocked in Turkey

ISTANBUL: Istanbul’s bright yellow taxis, ubiquitous and perennially honking for custom, appear ingrained in the daily life of the Turkish metropolis.
But could the fast-growing ride sharing app Uber make them a thing of the past?
Uber has enjoyed soaring popularity in Istanbul, where users appreciate the cashless payment system, security and convenience of hailing a cab by phone.
But, as in several other European cities, this has stoked antagonism with official taxi drivers, who have brought legal cases in Istanbul in a bid to have the app blocked in Turkey.
Tensions have also spilt over into violence, with Uber drivers complaining of being verbally harassed, beaten up or even shot at.
Kemal Kuru, an Uber driver since last year, said he was cornered and beaten by a group as he set off for a concert hall in the Sisli district last month on a job.
“I went to pick up a customer around midnight but someone blocked the road and harassed me verbally,” he told AFP.
“I got out of the car and all of a sudden 10 people attacked me... My teeth were broken and my lip was split.”
Kuru said the assailants could not be immediately identified as they fled into the darkness. But he pointed the finger at taxi drivers.
“I believe our income is getting on their nerves and they think we are stealing their customers.”
In March, shots were fired at an Uber vehicle in Istanbul’s Kucukcekmece district. The driver escaped unhurt.
Uber drivers say they are easily targeted as the vans they generally drive are unusual in the city.
But representatives of official taxi companies condemn such accusations — widely publicized in the Turkish media — as a stunt to discredit their business.
Eyup Aksu, head of the main taxi drivers’ association in Istanbul, accused Uber of launching a “publicity campaign” in an attempt to influence the pending legal cases.
“Taxi drivers have never resorted to violence against Uber. This is a smear campaign to blacken the reputation of taxis,” he told AFP in his Istanbul office.
There are almost 17,400 official yellow taxis in Istanbul, providing an essential and relatively affordable service in a gigantic city where public transport often falls short.
But as new competitors like Uber have emerged, the official taxis have often failed to keep pace with changing times and society.
They have been slow to implement systems to pay by card, install panic buttons that help female passengers in particular feel more secure and are only now considering lights to indicate if the cab is occupied or free.
In a bid to trump Uber, Istanbul taxis are themselves now becoming part of a digital network called iTaksi that allows passengers to order them from their phone.
Aksu admitted some deficiencies in the taxi sector but said taxis were transforming to catch up with Uber’s standards.
“We are shifting to luxurious taxi transport. We now have VIP transport in some touristic places and airports,” he said.
Meanwhile horror taxi stories abound in Istanbul — not just from incredulous tourists but also exasperated locals — about being over-charged, driven a circuitous route to ramp up the meter or being given fake change.
In a well publicized case, an Istanbul court this month handed a taxi driver a suspended jail term for having taken a Saudi passenger on an epic city tour rather than to the airport as requested.
But Istanbul taxi drivers insist they are working hard to make an honest living from a tough business where margins were already tight and now squeezed further by Uber’s presence.
Taxi drivers rent their car from the owner of the license, whose cost of 1.5 million lira (300,000 euros, $370,000) is well beyond most drivers.
The number of license plates available for taxis has stayed stable as the city’s population boomed, driving up their price.
Taxi driver Burhan Yuksek, looking for passengers in the busy waterside Eminonu district, said his business is suffering “hugely” because of Uber.
“I work by a hotel. We used to receive 40-50 calls daily from the hotel and currently it has dropped to 15-20,” he said. “They are pirates. They are stealing our labor and bread.”
Taxi drivers feel they have political backing, with President Recep Tayyip Erdogan regularly pictured drinking tea with the taxi community.
In the bigger of two legal actions brought by taxi drivers’ associations against Uber, an Istanbul court is due to resume hearing the case on June 4.
The tension in Turkey is one of a number of headaches for Uber and its new chief executive Dara Khosrowshahi, who took over last August after founder Travis Kalanick was ousted following a series of scandals.
In London where its drivers number around 40,000, Uber lost its license over its approach to reporting serious criminal offenses and its criminal record checks for drivers.
But it is allowed to operate in the British capital pending an appeal set for later this year.
Uber also put a temporary halt to its self-driving car program in the United States after an accident involving one of its cars near Phoenix killed a pedestrian.
In service for three years in Turkey, Uber has 5,000 vehicles and 8,000 drivers in Istanbul.
Vedat Kaya, of the Tourism and Development Platform, said Uber represented a “revolt against the taxi monopoly,” adding that some 4,500 taxi drivers had already switched to work with Uber.
Former taxi driver Yavuz Sarac, who joined Uber last summer, says he did it after realizing he would not own his own business “no matter if I work for 150 years.”
“Uber has presented new opportunities. I’ve owned my business,” he said, complaining that taxi drivers were exploited by the plate owners, while the Uber license was much less costly.
“I earn a living for my family. To me, it is a kind of escape from slavery to freedom.”