Amlak sees rise in mortgage defaults this year: Official

ham

“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 once-booming property sector is suffering, with real estate 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” with the United Arab Emirates government pumping money into the firms, 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. They ran into trouble when the global financial crisis brought the boom to a swift end in Dubai.

Leave a Reply

Your email address will not be published. Required fields are marked *