UAE mortgage defaults shot up close to 25 percent in the first six months of the year, local daily Emirates Business reported on Monday, citing analyst estimates.
“I have no doubt that we have seen increases in home mortgage defaults over the past six months,” Chris Green, managing director at Independent Finance, was quoted as saying.
Analysts said defaults will likely continue to rise in the coming months, according to the newspaper.
“We will no doubt see stresses in mortgage portfolios emerging, and there are players who are in trouble because of falling property prices,” Venkatesh Srikantan, regional head of assets and liabilities at HSBC, was quoted as saying.
Mortgage defaults have been rising steadily since the UAE’s once-booming real estate market hit the skids in the wake of the global financial crisis.
Property prices have fallen as much as 50 percent from their mid-2008 highs, while rents fell more than 20 percent in both the first and second quarters.
Increasing numbers of homeowners found themselves struggle to meet repayments amid falling rents and mounting job losses, while others who bought at the height of the boom walk away from properties now worth a fraction of what they originally paid.