Posted by GlobalCrisisNews.com on March 14, 2009 // 13 Comments
Dubai hit hard by financial crisis
Once the epicentre of global boom with skyscrapers rising into the sky like mushrooms, today Dubai resembles a hungover partygoer. Retail stores displaying “80% off” discount signs in their stores and talk on the street about companies repatriating foreign workers is hitting Dubai just like much of the rest of the world.
The other headlines coming from Dubai concern the real estate crash which is evident from the herds of professionals getting laid off and flocks of shopping-obsessed tourists disappearing. Not only that but real estate prices seem to be plunging with NewsFromRussia.com reporting that “A four-room villa, which was evaluated at $4 million several months ago, is now available for $2 million“.
A few months ago the big Dubai developers were still talking about recovery in the first quarter of 2009 but already three months into the year this appears to be wishful thinking. Dubai’s second largest property developer Deyaar recently announced that it would be putting at least 25 per cent of its projects on hold. The outlook is grim.
Several real estate properties have already dropped in price by up to 50% and we have not even seen the full extent of the global financial crisis. Analysts forecast much steeper forecasts ahead. Dubai’s economy diversified away from oil towards real estate and tourism making it extremely vulnerable to today’s market conditions.
The highly respected MarketOracle website has an even gloomier forecast: “A warning to those investors being swayed, the Dubai property crash has only just begun which seeks to correct a 6 year property boom. The Dubai construction boom is expected to come to an imminent halt with many partially finished projects littering the landscape as investors walk away from the off plan deposits in the wake of the ongoing crash in property values. It remains to be seen how much of this excess supply will eventually be reclaimed by the desert as many foreign investors in off plan Spanish properties are painfully experiencing. My expectations are for an average 50% retracement in Dubai property prices from the peak, with many of the more over-leveraged high end properties possibly crashing by as much as 75%.”
For those investors still considering putting their money into Dubai Real Estate, the following video might bring some cautionary insight. The coming months will tell what’s in it for Dubai’s once bustling property market…
Image by philby under Creative Commons.
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Tags: Business, Dubai, economy, expats, global crisis, global financial crisis, market, news, property, Real Estate
Author: GlobalCrisisNews.com (272 Articles)
April 20, 2009 at 1:26 pm
Its about time that things in dubai spin around and the landlords and real estate company feel the heat…i still remember the times few years back when landlords and realestate companies would barely answer your request, dont give you much time to check for the payment of the apartment, and were so greedy with the high demand and wouldnt care if they lost you as a customer, cuz there is a million others. They even came up with the rule of NO BACHELORS rentals, come on guys for god sake, its a bachelor country;however, if you pay more you can get it…Now things are turning around and im so happy for that, and for being smart and not getting into real estate,now landlords beg you to take the apartment, pay as many checks as you can, and they are providing the utmost service to ensure you like the apartment and pay for it…they dont mind you being a bachelor or married as long as you get money…its funny how things turn around…but its about time DUBAI!!!
July 6, 2009 at 2:24 pm
For the last 6 years I have been telling anyone who would listen that Dubai is paved with fools gold. Firstly why on earth would you live in a counytry governed by a sole family that treat the country and it’s citizens as their own private property?
You could not live in that country without air conditioning, it has no industry for crying out loud! If and when a war breaks out between the Iran and Israel the whole of the Gulf states will be reduced to rubble.
And lastly the oppression of the SE Asian workers is in itself worthy of the wrath of God.
I snigger at the thought of the shieks becoming paupers very soon lol!
July 6, 2009 at 2:27 pm
And while the Arabs fellow man suffer in poverty, some idiot had the bright idea of building islands in the damn sea !!! and the world tallest eyesore, i mean building !
Arabs with oil money are a curious lot.
August 25, 2009 at 7:10 am
Well that’s true Dubai Property and real estate portals and real estate properties market is hit by this financial crises the most and the property market is penitrating to histories peak level all the latest news about dubai Property and real estate can be viewed at Bayut Property and real estate property portals also you will find latest suggestions regarding investment in Dubai property etc.
November 27, 2009 at 8:22 am
greed is the main reason for this problem. Talking to newspersons here after a meeting of the State Cabinet, the Chief Minister said the Smart City Dubai, the developer of the proposed Rupees 1,500 crore project, was now raising non-issues.
Achuthanandan, who last week said Smart City Dubai was ‘broke’, repeated his claim Wednesday, saying the company was facing ’some problems’ as its major Arab financiers lost huge sums when the US banks collapsed last year.
‘They are upset and we know what their financial position is,’ said the chief minister.
November 29, 2009 at 3:08 pm
Dubai is actually a great place to live, just ask anyone who has to reluctantly return to the UK. The ruling elite however seem reluctant to address the fact that without securing a residence visa with the purchase of a house or apartment, retirees (or anyone who is not on a work permit or a spouse) have to leave the UAE every 30 days. It’s ludicrous.
December 5, 2009 at 4:52 pm
I teached some students, i told them that Dubai is not a good economic example, it hasn’t solid economy, it’s economy based on services and tourism and unfortunately houses building, and the building sector has utopic goals, and this debt crisis is just the begining, i hope that Dubai will be good nex months..
December 5, 2009 at 4:57 pm
I teached some students, i told them that Dubai is not a good economic example, it hasn’t solid economy, it’s economy based on services and tourism and unfortunately real estate, and the real estate sector has utopic goals, and this debt crisis is just the begining, i hope that Dubai will be good nex months..
December 14, 2009 at 2:27 am
how could they think of building such expensive hotels. islands and houses where only the millionaires or the billionaires can afford. Yet these people are not even 1/4 of the world’s population. Considering the cost of living in dubai is high compared to other exotic places, who wants an artificial island with all the artificial facilities?
with the money spent, they can buy a nation for those oppressed muslims who are everyday facing uncertainty. The wealth of this world is a trust given to mankind and must not be wasted but spent wisely for the betterment of humankind. it’s not too late to realize that.
December 26, 2009 at 3:42 am
European companies mislead Dubai government and business people, and they are the people escaped from this crisis first.
I don’t know why Dubai rulers did this mistake, I have been to Dubai first time in 1989, not only Dubai all UAE was just doing fantastic and developing, they would have develop normally like Abu Dhabi, but they given some crazy ideas by stupid European companies and also I have seen they got European fever like employers asking only UK degrees and diplomas for local jobs, I heard the UK institutes not teaching much just they selling the degrees and diplomas for money.
I have seen Dubai recently I don’t think Dubai will survive just like that as long as they come out of western influence and life style.
Australia TV – Channel 9’s program 60 minutes also one of the reason for real estate blunder in Dubai.
Come on Middle East open your eyes and mind too, wakeup and behave.