Dubai Atlantis

jq — Sun, 25 Jan 2009 14:43:41 +0000

That used to be the oasis where Dad proposed to Mom

I have worked for four years in the Emirates in various managerial roles from 1997 to 2001 and have had such a rich experience which in itself calls for writing a book. I was probably subconsciously impressed by a very famous 70’s comedy from Pakistan television [PTV] called “Dubai Chalo” (let’s go to Dubai); it reflected the Dubai fever throughout the Pakistani nation at the time, and in which most of them were literally taken for a ride in a boat and dropped at Karachi’s Hawks Bay after two days perilous sea voyage. [To set the record straight I flew and did reach Dubai first time].

Unfortunately Dubai is no laughing matter now, especially not for the property investors from all over the world who now stand to lose a great deal. A friend currently working in Dubai sent his woes in an email. This one line sums it up “sh*t has started to hit the fan over here in Dubai”.

Several major Dubai property developers have begun laying off staff, and others are reviewing their recruiting needs as the available global finance becomes thin. Although hard statistics are difficult to come by for the region, a case in point is Emaar who is considering job cuts in the wake of the tumbling market. To keep you in perspective Emaar is the Gulf region’s largest property developer by market value, 32% owned by the Dubai government and is the developer behind the world’s tallest tower, the Burj Dubai.

Emaar shares were down nearly 80% in 2008 to 3.19 AED a share. Realtors are identifying worrying trends of rapidly declining house prices, a stagnant resale market, the inability of off-plan property investors to keep up with their payment schedules, a marked decline in hotel occupancy rates and wage and hiring freezes in property companies. To make matters worse, they have highlighted the government’s indebtedness [Yes Dubai is not as rich as you thought - it's Abu Dhabi which still has oil]. Dubai has borrowed heavily in recent years to finance all of the physical infrastructure needed to support its construction trend. So much is the fear of a Dubai Doom that the UAE President, His Highness Shaikh Khalifa Bin Zayed Al Nahyan had to reassure the people of the UAE that their economy is supported by a healthy and robust national banking system [do you believe in a healthy bank these days?! Lol and chuckle]. A royal effort indeed to save the Dubai Dream.

Still phenomenal projects are being announced in the Dubai heartland similar to existing ones such as Burj Al Arab and the Indoor Skiing Resort in the Emirates Shopping Mall, but I don’t see anyone buying these new projects. Local Urdu and Hindi channels in the UK are saturated with Dubai Exhibitions and to be honest they sound somewhat desperate. I know someone who bought property two years back in Dubailand and though on paper the value has gone up he has no buyers interested in taking it off his hands. There is virtually no resale market at all for these new apartments. Once you buy one, you are stuck with it.

The new Atlantis - perhaps an apt name?

There has to be a clear difference between bravery and sheer stupidity because if you jump from a skyscraper it better be a suicide attempt or you should be Lois Lane sure to be saved by Superman. The only hope for Dubai is in its cash rich Capital Abu Dhabi which can save the day (Abu Dhabi’s Sheikh Mansour recently played Clark Kent with the UK’s Barclays Bank taking the role of Lois Lane) – but the question is will they? If you ask me my money is not on Dubai, at least not for now. I don’t plan to go down with the new Atlantis.

[this article originally published on our sister site www.ultranomics.com by jq]

www.dubaipropertycrash.com » atlantis

Dubai Atlantis