More than 25% of the population of the United Arab Emirates is living in debt. That was revealed by a new survey, which also found that the monthly debt repayments are one of the main sources of stress for people living in the country.
It is no secret that living in Dubai and the UAE in general can be very expensive. Both Dubai and Abu Dhabi registered a rise on Mercer’s latest Cost of Living Survey. The capital of the United Arab Emirates jumped 9 spots, whereas Dubai made a giant leap of 23 positions, landing on the 67th. According to Mercer, this can partly be explained by the rising retail property prices in the UAE and Dubai in particular.
Regardless of the main reason behind the high prices in the country, a new research has found that over a quarter of UAE’s population is in debt. According to a new survey by compereit4me, more than 25% of participants report to have either missed or were late with their loan payments.
In most of the cases, credit cards were the leading cause for UAE’s population debts (54.7%). Personal load and car loans were also on the list of over 43% and 12.5% of the expats in the country, respectively. Another 4% had mortgage debts with banks. All in all, nearly 80% of the survey’s respondents shared that they owned money to a financial institution.
According to the same study, a little over 19% of people living in the United Arab Emirates today have made late payment at least once in the past one year or have completely misses to make. Nearly 6% of the people who took part in the research admit that they have frequently defaulted on their loans.
Researches behind the survey state that these results are very worrying, since every fourth respondent have said that the debt repayment for which they have to think every month are quite stressful for them. That is why analysts advise consumers, who have a loan which they started to repay over a year ago, to research their options to refinance their debts. According to them, competition between local banks has become more fierce and that has brought down the price of credits. In addition, they suggest that people should consolidate their debts as soon as possible, starting with credit cards, where the interest rate is much higher.
Back in 2008 – 2009, when Dubai was in the peak of recession, about 2,500 expats were said to have left the country due to their inability to pay their credit card bills.
