KHDA, mortgage caps and freelancing

KHDA, mortgage caps and freelancing
17 June 2013

Avoiding conflict between parents and schools

In an effort to reduce conflicts between private schools and parents Dubai’s Knowledge and Human Development Authority (KHDA) has revealed a new legally binding initiative outlining the rights and responsibilities of schools and parents. The School Parent Contract will include refund and admission policies, school fees, attendance and punctuality, as well as health and safety provision and transportation. It will also address parental responsibilities such as providing schools with accurate medical, psychological and educational assessment records. More here…

As recruitment slows more turn to freelancing

The number of jobs available online in the country has declined, according to the latest Monster Employment Index for the region, giving fewer opportunities to those looking for a new job. The May 2013 index highlights released by Monster shows a decline of 14% on an annual basis. The UAE saw the largest decline in the region according to the index, where a negative decline of listed jobs fell by minus 19%. Meanwhile Bayt Jobs indicates a growing number of companies willing to take on freelancers in the region and more individuals turning to freelancing due to a host of opportunities for professionals to earn supplementary income, or even as a primary source of income. 

Proposed mortgage cap could damage the economy

A new report by Geopolicity argues that, the proposed central Bank mortgage cap could lead to a potential GDP loss of 2.78% to 5.71% for Dubai, which could constitute losses in the range of 0.69 % to 1.43% for the UAE as a whole. Geopolicity estimates the ideal range for limiting mortgage lending at 70-75% of LTV for expatriates and 75-80% for nationals. This would greatly minimize associated GDP losses and overall economic impact. Along with these lower caps for mortgages the Government/Central Bank could adopt associated measures, which could provide the right signals to investors without affecting growth.

The report suggests seven factors the UAE Government could adopt, to provide for sustainable quality growth in the real estate sector and economy overall: one - duty (penalty) on properties that are resold within 24 months of initial purchase; two - stringent income assessment measures to prevent mortgage defaults; three - Fixed Rate Mortgages rather than Adjustable Rate Mortgage Loans; four - secondary market development to increase liquidity (while cautious to complex structured mortgage products that leverage debt); five - higher transparency in mortgage regulations and lending; six - higher financial literacy and awareness among both lenders and buyers; and, seven - increased competitiveness and better-regulated market for mortgage lenders.


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