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Like Silicon Valley on steroids, apparently, with real estate prices now down between 40 and 50 percent over just the last month...
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If you have not taken a look at what a typical house on one of the artificial islands looks like, I urge you to look at this (http://www.calculatedriskblog.com/2009/02/more-on-dubai.html) and tell me if you would spend five to ten million to live there. Dubai is a joke. It has nothing but sand and stagnant, polluted water. While the US economy is perhaps 30% bubble (FIRE), Dubai was as much as 85% bubble. 50% off and falling. And, enjoy these reports while you can. The enlightened despot in Dubai is preparing a law which makes it illegal to criticize, slander, or damage the Dubai economy! Wow, they ARE learning to be Americans!
The bursting of the bubble in Dubai is fast becoming a favorite topic of reporters around the world. It's a shame they misreport or distort information. The first line of the video saying "Booming oil prices" implies Dubai relies on oil. Not directly, less than 5% of UAE oil exports come from Dubai. The "one fifth of the world's cranes" is an oft repeated incorrect statistic, although at least it's not as bad as those who like to say half the world's cranes are in Dubai. Property flipping was prevalent in 2008 and 2007, it was bound to come to halt sooner or later and thank goodness it did. Like any bubble behaviour, it all pops eventually. That doesn't mean the end of the road for Dubai though.
Er, Dubai. Great retort, but so how do you exlain the present situation? What does Dubai have to offer other than a local real estate bubble (I predict an average drop of over 80% in prices) and a false economy built on the worldwide financial bubble.I'll give you one concrete example of the illusion that is Dubai. A major international bank based in London with a very large Asian presence was worried that it would be owned and controlled by a small Asian government. In order to protect itself, it prostituted a chunk of its stock to Dubai. The Dubai government insisted that the bank build a large office building there as part of the deal. The building, larger than even the home office, was built at great cost. Well, the building was empty since there was no need for the space. But this made senior management look like incompetent fools who were only interested in their power and pay packages so they mandated that ALL new employees be hired in Dubai (and I do mean ALL). When this was shown to be impractical and downright stupid, it was modified. Each service worldwide had to move something like ten to twentyfive percent of staff to Dubai or prove that it was not possible to do so.So now the building is half full of the only idiots in the world who would accept to live in the desert for lousy pay (for a bank) thousands of miles and many hours from the markets they are supposed to cover.That, Dubai, is the magic of Dubai and a perfect allegory for whole place. Frankly, Dubai would be better off being built on oil. At least that stuff is still worth something!
I read in the newspapers that cars are now fewer on the roads of Dubai hence there are lesser traffic jams and taxis keep wandering for non-existent costumers. Really all of this just deepens our thoughts on the economic crisis and it effects.
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