Mortgage defaults are expected to rise in Dubai this year due to the global downturn, Amlak Finance, an Islamic lender being rescued by the government, said on Tuesday."We are experiencing more delinquencies in terms of mortgages in 2009 and it will be very challenging to manage going forward," Max Hamidi, chief financial officer at the Islamic mortgage firm, said at a conference.
"The default on mortgages is growing and it will probably grow further," he said.
Dubai's real estate indsutry saw prices tumbling 41 percent in the first three months of 2009, according to property consultants Colliers.
The slowdown has led to billions of dollars of project cancellations.
A decision on how to restructure troubled Islamic mortgage firms Amlak and Tamweel will be made in "weeks", Tamweel's chairman said late last month.
Trading in shares of both companies has been halted since the government announced in November it was merging them with two state-controlled banks.
The Islamic home financing companies developed their businesses during an economic boom that was kicked off by the emirate's decision in 2002 to allow foreigners to invest in properties on a freehold basis. (Reuters)For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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