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Majority of UAE expats say lifestyle hit by crisis

In a survey of 600 residents in the UAE and Bahrain, Zurich International said some 83% of respondents in the UAE expressed concerns about their ability to repay their mortgage and personal loans.

A collapse in oil prices and a property market downturn, particularly in Dubai, have brought to an end an economic boom in the oil-exporting Gulf region, leading many economists to slash their economic growth forecasts.

“Fifty-eight percent in UAE believe their lifestyle has now been compromised by impact of credit crunch ... only 25% in Bahrain believe this,” Zurich said in a statement yesterday.
Banks across the Gulf are restricting lending as they face tight credit markets and Dubai’s real estate price correction is leading to scores of job losses, raising the prospect of defaults on mortgage and consumer loans.

In November, Dubai’s Real Estate Regulatory Authority (RERA) said the emirate had witnessed a growing number of defaults in high-end properties as financing conditions worsened and mortgage lending tightened.

“The jitters have set in about job security, practical issues and saving,” Carlos Sabugueiro, a Zurich Middle East and Africa chief executive, said in the statement.
“Also, more people are concerned about getting professional financial advice, with around a fifth of expats now turning to professional sources.”

Confidence was higher in Bahrain because “they haven’t been so exposed to the boom-and-bust scenario as in the UAE”, Sabugueiro said. Some 65% of Bahrain respondents were currently holding property investments, compared with 27% in the UAE.
According to the survey, which polled 500 people in the UAE and 100 in Bahrain, 50% of respondents believed the situation would improve, while an overwhelming 70% said they would sit out the credit crisis.

Source: Gulf times, Dubai
Pubication date: 11th February 2009
 

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