Dubai Property
70Dubai has been all over the news recently, and none of it has been good. I have been calling a property crash in Dubai since way back at the beginning of 2008 and came in for some severe criticism for doing so, but - what can you do? The Wall Street Journal, London Times et al were making mucho dinaro selling off-plan "investment property" in Dubai to British and German idiots with more credit than they knew what to do with.
But - seriously - who - from a western country - wants an "investment property," in the middle of the desert in a Muslim country, surrounded by nothing by trees imported from South America and watered at enormous expense with desalinated sea water? Off hand - that is the last "investment" I would want to make. And make no mistake - an awful lot of people have lost their life savings investing in Dubai, and an awful lot of companies are going belly up leaving an awful lot of unsecured creditors.
Investment Property in Dubai?
As usual - the mainstream media is hedging their bets - although a default of the size that is looming is difficult to ignore completely. Finally the Times admits there is an issue - presumably their ad agency didn't pay the last invoice.
Nevertheless, the Dubai crash will have repercussions all over the world. Odd though - The USA, Germany, France, the UK, Switzerland and all other banking countries claim not to be heavily invested in Dubai. Makes one wonder exactly where they managed to borrow this outstanding $100 billion or so. If that is how much is outstanding - Dubai is not exactly transparent in it's dealings and I suspect the New Year will be bring "Shock" news that Citibank have lost another $20 billion thanks to Dubai, Bank of Scotland just happened to have a few dollars invested and the French and German banks might have to put their hands up to a few dollars here or there. But - not until January. We wouldn't want to see the banker bonuses affected........
Call me cynical if you will, but Dubai may be the straw that broke the camels back. There is a genuine possibility of another several hundred billion dollars going down the black hole that all the other money seems to be disappearing into. The total lack of transparency and banking regulations makes Dubai an attractive hidey hole for most international banks and money laundering of a scale never seen before was the reason for the Dubai property boom.
- Banking regulator: "Where did that cash come from?"
- Banker: "I sold an investment portfolio in Dubai."
- Regulator: "Oh - OK," wink, wink......
Of course - this sort of approach only works for the institutional bankers. You win a couple of grand playing a poker tournament in Las Vegas and see how far you get avoiding taxes on that.
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Hey Paraglider - I have not been there for some time - about 2 years. It was a disaster waiting to happen then. You wouldn't by chance have any recent photos of the non work would you?
I have real difficulty getting anything out. All my contacts have since left or been fired and I am sure you know the draconian employment laws. No job? 30 days to leave the country. lol
And yes - you picked well. :)
Oh Wow, and this was supposed to be top notch real estate. I was wating until something was finished so that I could see the MAN-Made island. I guess there were some problems.
LOl -- The World - as Paraglider pointed out - it currently billed as "the World's most expensive shipping hazard" lol
I haven't got a clue about anything like they were doing in Dubai. I just about got myself to be able to buy a house. But even to my non-existing knowledge I could see that very soon they would get stuck because of the rate they were building. Banks suppose to be financial experts and money fizards. All I can say, "what were they thinking of." You go to a bank to borrow £50 or £100.......
Hi Mark, great hub! My personal recommendation for buying great property, to develop or as retirement home, would be the "new" EU member states like the Czech Republic or the ones at the fringe to join like Montenegro. SY
@ hello hello - Too much too soon too uch money laundering. :)
@ hospitalera - What? In a country where you do not speak the language? It depends - if you know your way around sure - if not - you are sure to get burned - as have many in Bulgaria and the Baltics recently.
It is refreshing to see a clear look at other parts of the world. The problems/excesses that developed over the last few decades in not just a U.S. or European problem. It is important to note that parts of Asia could be heading toward the same calamity in the next 5 or 10 years.
No question - although Dubai was a little extreme :)
Interesting hub. I haven't traveled to Dubai but the pictures looked so beautiful and you just assume only the super rich could afford to purchase real estate. Calamties seem to be more prevalent all over the world now.
hi, mark. Let me suggest, its beautiful if u try to invest in indonesia. I know dubai, its nice but indonesia more better. Pls come n see. try to be developer in indonesia, or other chance of business. C.U
You braked my dream of visiting Dubai... Thanks
@Mark
And all people that invested in Dubai spoke / speak fluently Arabic? ;-) SY
This is a very disappointing situation and in my view all of this has happened due to unplanned and excessive investment in Dubai. Most of the apartments in Dubai are vacant and a large number of expatriates have left Dubai but I think that despite all this crisis it doesn't mean that Dubai will never rise again. It will but it will take some time though.
Paraglider Level 5 Commenter 2 years ago
Hi Mark - I don't know if your travels ever take you to Dubai? It is wholly changed from 18 months ago. Unfinished tower developments are everywhere, topped by stationary and possibly by now unusable cranes. The World Islands project has become nothing more than a shipping hazard. The Palms are at most 25% occupied, and most lucky residents have a view of abandoned building projects.
The best thing about it is that rents and hotel deals are cheap again, and you can get a taxi anywhere in the city. In fact, you have to fight them off at times. And for the unscrupulous, abandoned cars are everywhere for the taking.
Quite glad I moved to Qatar!