Little Professor Posted May 24, 2009 Share Posted May 24, 2009 More in The Times today: Desert Storm The bad news is that the economic model that got Dubai so far so fast has run into the sand. The property sector has collapsed. Construction has all but stopped, and prices fell by 41% in the first quarter of this year, according to the real estate consultancy Colliers International.Behind the raw data are people: people like David and Leanne. David, 33, set up a firm offering consultancy services to contractors. Leanne, 28, got a job in human resources for a local contractor. Last year, they bought their first property: a three-bedroom, £500,000 flat in the marina. Almost a year on, they are about to do something they never imagined they would: run away. Any day now, the couple — who don’t want to reveal their full names because, under Dubai’s strict bankruptcy laws, debtors can be jailed simply for bouncing a cheque — will head to the airport with their four children and leave. Leanne has been laid off and the contractor David’s firm works for hasn’t paid him a dirham since December. The flat is worth 25% less than they paid for it, pushing them into negative equity, and they are down to the last of their savings. “Our lawyer told us that, as debtors go to prison here, we should leave while we can and negotiate from a position of strength abroad,” Leanne says. What’s gone wrong? Dubai was the ultimate property bubble. Sheikh Mohammed wanted to build 1m new homes in 15 years — an epically extravagant plan, even in the boom years. The problem was that the foundations of the property sector, like some of the developments themselves, were not secure. Chris Dommett, who runs the Dubai operation of the mortgage advisory company John Charcol, says the market was “a classic pyramid scheme”, and unsustainable — though, he adds, nobody foresaw prices falling as sharply as they have done. From 2000 until last year, developers used borrowed money and deposits raised from off-plan sales to fund razzle-dazzle schemes. Lax regulation meant developers could take deposits before they had even broken ground, and even use deposits taken from buyers in one development to fund the construction of other developments. With deposits as low as 10% of the purchase price, speculators piled in, reserving entire floors of new developments and flipping all the flats for a higher price before they had to pay the next staged payment. The more they sold, the higher prices rose. The higher the prices, the more they bought. Round and round the fizzy cycle went. Then, when the credit crunch hit last year, the economy turned on a dirham. Private developers suddenly found they could not borrow from banks. The Dubai government, which controls Nakheel, Dubai Holding and Emaar — which together account for more than 80% of all property development in Dubai — could not borrow on the wholesale markets. With almost no oil of its own, Dubai depends on borrowed money and support from the federal government, largely bankrolled by Abu Dhabi. Long-term investors who had bought off-plan homes that were almost finished could no longer borrow from the banks, so missed their final payments and defaulted. Spooked by falling prices, new investors walked away from deals, forfeiting their deposits. The result, as Dommett puts it, is that the housing market has “effectively stopped”. Quote Link to comment Share on other sites More sharing options...
eric pebble Posted May 24, 2009 Author Share Posted May 24, 2009 More in The Times today:Desert Storm "Desert Storm"!! Funny.... Quote Link to comment Share on other sites More sharing options...
carbonoid Posted May 24, 2009 Share Posted May 24, 2009 "Desert Storm"!! Funny.... from the article: Anyone who bought and sold between 2000 and July last year — that includes the Chelsea footballer Joe Cole and Simon Cowell, the creator of the X Factor, who both flipped villas on the Palm Jumeirah — made a killing. Oh God, I want to be sick... I actually think I'm going to cry.... Quote Link to comment Share on other sites More sharing options...
Saving For a Space Ship Posted May 24, 2009 Share Posted May 24, 2009 (edited) "Desert Storm"!! Funny.... It's going to be like that scene in the film A.I. Artificial Intelligence 'Where the lions weep'. They fly over a crumbling Manhattan skyline flooded with water, except this time it will be flooded with sand. 'Where the Liar Loaners Weep' (5.50 in) http://www.youtube.com/watch?v=J4SZecfoVB4...feature=related Edited May 24, 2009 by Saving For a Space Ship Quote Link to comment Share on other sites More sharing options...
50%deposit Posted May 24, 2009 Share Posted May 24, 2009 the guy doing the oot camp sounded like a total plank. he kept repeating himself and talking about how mind blowing getting up in the morning is. Really? millions of people through the eons of time have gotten up in the morning for thousands of years. he seemed to be in total denial about his subconsious belief that he was saving lives. I would like to know his full story, with accounts. plenty of LOL there i imagine. i think dubai will beome a dangerous place when the money goes. The middle east is volatile and arabs can really be a pain. great, get unemployed as a white westerner in a middle eastern country, fantastic. im sure the locals will be full of sympathy that you cant flip your property for a billion dollars profit. however, if flats were £10k i'd buy one, i quite like that palm island. Quote Link to comment Share on other sites More sharing options...
Dubai Posted May 25, 2009 Share Posted May 25, 2009 Nice version of Mr Scambourine Man.Dubai was a triumph of marketing over common sense - Tiger Woods, the Beckhams, Bernie Ecclestone . . must rival the Southsea Bubble. I was there when a few of these high profile celebrities 'bought in'. Rumour was that Beckham, Julio Englasias and others were virtually given their villas as a marketing ploy. Quote Link to comment Share on other sites More sharing options...
eric pebble Posted May 25, 2009 Author Share Posted May 25, 2009 I was there when a few of these high profile celebrities 'bought in'. Rumour was that Beckham, Julio Englasias and others were virtually given their villas as a marketing ploy. Typical tactics in a world where "truth" is lies, lies, lies. Cheating, obfuscation, spin...... there are what rules over everything.... Quote Link to comment Share on other sites More sharing options...
Little Professor Posted May 28, 2009 Share Posted May 28, 2009 More in the Independent today: Dubai property scandal claim emerges amid media blackout Fake picture allegations and a member of the ruling family linked to a £428 million Dubai property row that has touched nerves across the city A major property development firm with links to the ruling family of the UAE city-state, and the firm’s marketing agency, are accused by investors, many of whom are UK citizens, of obtaining millions of pounds through the use of false construction photographs.On Thursday, after local and regional media had been alerted to the situation by angry investors, news agencies across the city said they were silenced by senior representatives of the Government of Dubai, as orders were issued for reports of the storm to be pulled. “I only handed over my money because I was shown property under construction,” said UK-based Ebony and Ivory Investor’s group spokesperson Moses Oye. “That’s my simple gripe. It’s a black and white issue.” [yes, very funny ] The news will further dampen the spirits of the once-booming Dubai real estate market – a vital facet of the city’s economy. Last year a number of senior executives from major property developers across the city were arrested in a high-profile fraud clampdown as the government sought to clean up the property sector. With it, the global recession has brought a host of new problems. Many construction firms operating in the city, some of which are UK-based, are owed millions of pounds by Dubai property developers struggling with a lack of liquidity. Among them is UK engineering giant WSP. The firm’s finance director Peter Gill revealed that the firm is owed £28 million by Dubai-based developers, some controlled by the city’s government. Dubai’s property market has been likened by some to a giant ponzi scheme, where bigger and more grandiose projects were announced in a bid to keep investment rolling in until the financial crisis tamed the city’s galloping development. Quote Link to comment Share on other sites More sharing options...
Rachman Posted May 28, 2009 Share Posted May 28, 2009 The retard (the Moses chappy in the article) committed to 5million of his and his clients' money without going out to see it. He's a complete fkcuing moron. Rude words, but completely apt for this village idiot He's now compounding his error by going public and ensuring that no-one would ever dare enchurch the donations from their born again evangelical church of South London collection plate to him again...... - absolute dimbo. Quote Link to comment Share on other sites More sharing options...
winkie Posted May 28, 2009 Share Posted May 28, 2009 Foundations built on sand...what do you expect? Quote Link to comment Share on other sites More sharing options...
Giordano Bruno Posted May 28, 2009 Share Posted May 28, 2009 Foundations built on sand...what do you expect? Dubai property scandal claim emerges amid media blackoutFake picture allegations and a member of the ruling family linked to a £428 million Dubai property row that has touched nerves across the city By Heerkani Chohan Thursday, 28 May 2009 Have a look at this-http://www.independent.co.uk/news/world/mi...ut-1691537.html Quote Link to comment Share on other sites More sharing options...
campervanman Posted May 28, 2009 Share Posted May 28, 2009 Foundations built on sand...what do you expect? Dubai property auction fails to sell a single lot: http://www.propertywire.com/news/middle-ea...0905283143.html Quote Link to comment Share on other sites More sharing options...
Little Professor Posted June 3, 2009 Share Posted June 3, 2009 Dubai House Price Crash cancelled! UAE property prices rise for the first time in months Property prices in the United Arab Emirates increased in April and May, according to international bank HSBC. Prices in Dubai and Abu Dhabi rose 4% in April compared with March and 5% in May, says the bank's latest transaction survey. But it warned that it is too early to call it a trend. 'Market data from April and May show a range of positive indicators. Agreed property sale prices are rising, volumes are holding up well, and banks have loosened their lending criteria,' said David Lepper, head of equity research for the region. Mohammed Nimar, CEO of property group MAG, believes that a mass sell-off by speculators has contributed to Dubai's housing crash. 'Speculators were originally responsible for driving property prices to unrealistic levels. Now, although they are on the receiving end of the slump in prices, they are still blighting the real estate landscape by panic selling and undercutting the fair market price,' he said. Quote Link to comment Share on other sites More sharing options...
bkkandrew Posted June 4, 2009 Share Posted June 4, 2009 banks have loosened their lending criteria,' said David Lepper, head of equity research for the region. Withs views like that, no surprise at his surname. Quote Link to comment Share on other sites More sharing options...
Patfig Posted June 4, 2009 Share Posted June 4, 2009 Dubai House Price Crash cancelled!UAE property prices rise for the first time in months Property prices in the United Arab Emirates increased in April and May, according to international bank HSBC. Prices in Dubai and Abu Dhabi rose 4% in April compared with March and 5% in May, says the bank's latest transaction survey. But it warned that it is too early to call it a trend. 'Market data from April and May show a range of positive indicators. Agreed property sale prices are rising, volumes are holding up well, and banks have loosened their lending criteria,' said David Lepper, head of equity research for the region. Mohammed Nimar, CEO of property group MAG, believes that a mass sell-off by speculators has contributed to Dubai's housing crash. 'Speculators were originally responsible for driving property prices to unrealistic levels. Now, although they are on the receiving end of the slump in prices, they are still blighting the real estate landscape by panic selling and undercutting the fair market price,' he said. I bet he falls apart Quote Link to comment Share on other sites More sharing options...
grumpy-old-man-returns Posted June 4, 2009 Share Posted June 4, 2009 the guy doing the oot camp sounded like a total plank.he kept repeating himself and talking about how mind blowing getting up in the morning is. Really? millions of people through the eons of time have gotten up in the morning for thousands of years. he seemed to be in total denial about his subconsious belief that he was saving lives. I would like to know his full story, with accounts. plenty of LOL there i imagine. i think dubai will beome a dangerous place when the money goes. The middle east is volatile and arabs can really be a pain. great, get unemployed as a white westerner in a middle eastern country, fantastic. im sure the locals will be full of sympathy that you cant flip your property for a billion dollars profit. however, if flats were �10k i'd buy one, i quite like that palm island. I couldn't disagree more. The Dubai epidemic epitomises western greed. I also don't like Spain, the greedy locals have also sold their souls to the greedy English..... Quote Link to comment Share on other sites More sharing options...
Legal_Landlord Posted June 4, 2009 Share Posted June 4, 2009 I bet he falls apart Or throw his hand in and walk away Quote Link to comment Share on other sites More sharing options...
abharrisson Posted June 4, 2009 Share Posted June 4, 2009 I'm no fan of Dubai, or its laws and am pleased its all gone bust.. hopefully it will revert to desert in rapid quick time.... I'd never holiday there, I'd never live there, and Ive never really understood why anyone else would want to... horrid climate, builidng site, disgusting architecture, built using slave labour, truly bizarre laws, rude emiratees, sewerage doesn't work,overpriced etc etc .. need I go on. Quote Link to comment Share on other sites More sharing options...
profitofdoom Posted June 4, 2009 Share Posted June 4, 2009 The picture on that article reminds me of Dresden circa 1945.I never quite got the logic of a state dependant on oil diversifying into tourism- don't jets use lots of fuel? Build it and they will come? Garlic Bread? Quote Link to comment Share on other sites More sharing options...
ricbax Posted June 4, 2009 Share Posted June 4, 2009 Johann Hari's article summed it up for me. Crazy place, strip away the veneer and filthy lucre and it's basically North Korea in the sand. http://www.independent.co.uk/opinion/comme...ai-1664368.html The ex-pats who choose to settle there seem to be especially disgusting and obnoxious. Boorish racist Brits, Aussies and others who have no problem, it would seem, with the concept of slave ownership. Quote Link to comment Share on other sites More sharing options...
Patfig Posted June 4, 2009 Share Posted June 4, 2009 Or throw his hand in and walk away It might cost him an arm and a leg! Quote Link to comment Share on other sites More sharing options...
SMAC67 Posted June 4, 2009 Share Posted June 4, 2009 The article is spot on, a modern Sodom and Gomorah. Quote Link to comment Share on other sites More sharing options...
Rachman Posted June 4, 2009 Share Posted June 4, 2009 Johann Hari's article summed it up for me. Crazy place, strip away the veneer and filthy lucre and it's basically North Korea in the sand.http://www.independent.co.uk/opinion/comme...ai-1664368.html The ex-pats who choose to settle there seem to be especially disgusting and obnoxious. Boorish racist Brits, Aussies and others who have no problem, it would seem, with the concept of slave ownership. I see he still can't stop commenting on how pretty the men he meets are..... Quote Link to comment Share on other sites More sharing options...
Saving For a Space Ship Posted June 4, 2009 Share Posted June 4, 2009 (edited) 'Palm Island' aptly named as it's houses were bought by w@nkers Look at the purdy little skeleton buildings.. Edited June 4, 2009 by Saving For a Space Ship Quote Link to comment Share on other sites More sharing options...
Miss Madam Posted June 4, 2009 Share Posted June 4, 2009 Any investor who chose to speculate on the slave labour built property bubble in Dubai deserves to lose their shirt for being morally bankrupt. They should look on the bright side - at least they still have their passports and can return to their families unlike a lot of the Indian, Pakistani and Bangladeshi labourers who were lured over their by promises of decent wages that never arrived and herded into slave labour camps - minus their passports. Anyone who can live in Dubai must have the most astounding moral blinkers to not notice that their opulant standard of living is subsidised by an indentured slave class from the developing world.... a little like globalisation in microcosm. Not surprisingly a lot of South Africans who were able to 'not notice' the injustice of apartheid are settled there now. I just can't grasp how you could live there and not feel like an absolute exploitative shit? Quote Link to comment Share on other sites More sharing options...
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