Real estate mortgage loans to residents jumped by 92 per cent to Dh87.57 billion in the year to June compared to Dh45.65bn during the same period last year, according to UAE Central Bank data.

Mortgages loans to non-residents more than doubled to Dh1.57bn from Dh664 million, but declined marginally by two per cent over the last month, when lending was recorded at Dh1.6bn.

As money markets become tighter due to the global liquidity crunch, UAE banks and lending institutions have begun toughening their lending criteria, forcing developers to look at offering flexible financing schemes, said Chris Dommett, Chief Executive Officer, John Charcol Dubai. "Major regional and international banks have become more conservative in their lending, with many cutting their loan-to-value (LTV) ratios by as much as 25 per cent due to global financial uncertainties."

Dommett said the trend towards lower loan to value ratios is making it more difficult for end-users to purchase property and developers are taking action to minimise the effect this may have on the real estate market.

Earlier, Lloyds TSB Group said it is curtailing lending to individuals in the UAE. The bank has stopped offering loans for apartments and would finance only half of the value of a villa, down from an earlier limit of 80 per cent.Abu Dhabi Commercial Bank has also revised its mortgage rates from around 7.5 per cent to 9.5 per cent and has also lowered its loan to value ratio to 70 per cent from about 90 per cent.

Dubai's population is growing at an average 7.9 per cent a year and may rise to 1.9 million by 2010 from 1.4 million now, Cairo-based investment bank EFG-Hermes said. In total, residential supply will be about 277,000 units through 2010, with most slated for delivery in late 2009 to mid-2010.