Development in Dubai

[Genesis]

Ok, why is Dubai crazy over developments?
What's the point? Why so much, so big, and so fast? Do they want to artificially create anything and everything? Does anybody live in those sky-piss-off-scrapers? For 2.2 Million residents (of which over 65% are starving asians), it seems a bit too much doesn't it?

I understand the engineering effort and I marvel at the western brainpower behind all this, but away from engineering applauds;
why does Dubai want so much? I really don't understand... Artificial grass, artificial ski slopes, artificial islands... what's happening down there?

Sure it's marvellous, but it's like someone getting reconstructive facial surgery... It's not real and lacks character... I don't know... It doesn't feel right. Or am I wrong here?

Besides, I know that UAE craps money, but can they really afford all this? Has the global recession hit them anyhow? Or are they still oblivious to what's happening and want to pursue the next thing on the list: a ladder to heaven.

[Raneem]

why do you care ?
only matter your green country!

[Nicktalopia]

Dubai is a virtual city built in debt and futuristic economy progression.
It's never going to be as good as Beirut, despite everything that circulates the Lebanese future at least Beirut is a real established city with real investments and real estates.
Although i admire Dubai's vision on making the perfect city, i think they got delusional along the way and made bases on a shaky ground, the economy is constantly changing, one war that Dubai got nothing to do with might change everything for them, Simply the west had interest in building Dubai and gave them all the free opportunities but after the economy downfall the interest started going backwards while the Asian market started to look more appealing for investors.

[Genesis]

^ I see... So they're fucked? It's just a fancy exterior for a cracked foundation?

I don't want this to turn into a comparison between Beirut and Dubai. They're both very different. Besides, I have hardly seen Lebanon properly myself so I don't want to drag myself into a dark spot.

Raneem; I don't really care, I was just wondering because I was watching Mega Builders on Discovery and they were covering one of the many ridiculous projects in Dubai and my mind just wandered.

[Nicktalopia]

[rob]

[Genesis]

^ One of my top 10 episodes of all time!

[Qulture]

Gen , Dubai has been hit really hard with the economic crisis , if you havent heard on the news yet ! and the western media is having a blast with it , just because Dubai is a middle eastern city !! They couldnt believe the growth it was doing , so now they are all bashing it !! Although , if you look at other countries with their problems , doesnt make Dubai look that bad at all !!

Its just the fact that Dubai had alot invested in real estate development , be it the government ( or SHAKEE MOE backed companys ) or private developers . The average apt or house , used to sell out less than 24 hours after they announce the launch of a new project on paper !! that same apt or house will go through almost 16 buyers , before the end user who will actually live in that house will get it !!

So people with 10000 us dollars in their bank accounts , used to buy apts and houses that cost 2 million , and pay a downpayment of 3000 dollars , and sell it ( or sell the contract of that unit ) at a profit , before their 2nd payment is due ( which they actually dont have ) 6 months after the initial deposit !

So , when the global crisis hit , banks stopped lending , people stopped buying , and many many people doing what i mentioned above got stuck with units they cant afford , and only bought to sell at a profit before their second payment was due ! Of course you can apply this theory to people who had loans , company's defaulting or asking for extensions on their loans , government spending etc .... It just becomes bigger as you go up the ladder .

So the demand on real estate in Dubai was not the " actual " demand of the population , it was just a way to make a quick buck ! But i think , what is going on now is good , Dubai needed a correction in all aspects of that city ! However , they have a solid infrastructure , and will bounce back , but not in the same way or growth as before , and definetly not counting on one sector ( Real Estate and Tourism ) to bring in all the investments !

sorry for the long reply ! But , i hate it when i see CNN , BBC , ABC , CBS , FOX NEWS , all bashing Dubai like there is no tomorrow , just because its a Middle Eastern city !!! I know they have alot of mistakes , especially how the laborers working on the construction sites used to be treated etc ... But a couple of years ago , when they used to talk about Dubai , they used to say stuff like , the New New York , or the Jewl of the Arab World ... !! and now this ... !!!???

[samlbronkowitz]

actually Gen, to give you some perspective, what happened in Dubai happened in Ireland (of course on a much grander scale). Dubai doesn't really have any oil (only 6% of its GDP is from oil revenue and its less and less every year) so basically they decided the way forward for it was through the ports (3rd busiest in the world), real estate, tourism and services. The last 3 basically rely on speculation. So Dubai, with huge funding from European banks, went through a real estate development boom like nothing the world has seen. it was the attitude of "build it and they will come". To give you an idea, a 25km stretch of water had more than $500billion worth of skyscrapers being built. Ireland had a massive boom in property market based on derivatives, speculation, etc. as well and that is why its now probably struggling more than any other country in EU.

And while they changed their laws allowing foreigners to own property, the real estate market boomed--but again all on speculation. People would see a floor plan, pay $1.5million for an apartment, and sell it for $1.8, and then that guy would sell it for $2.1...while nothing had yet been built.

Now all this was fine and dandy as long as the rest of the developed world was doing great: companies who wanted to open an office in Middle East automatically looked to Dubai because of zero corporate tax, zero income tax, and general easy living. IN fact certain corporations (Halliburton, as well as some british financial institutions) were going to send their headquarters here (65,000employees and their families in the case of Halliburton). When the crisis in 2007/2008 slammed the world, it didnt affect Dubai directly: people here were still living well, jobs were still there and real estate was still going up. Then suddenly you had massive structures completed with no one living/working in them. Supply/demand situation changed and prices dropped: on average by 50%, and in some areas 70%.

What Dubai went through is basically a necessary clean up: it kicked out all the market speculators (no more money to throw cash away), and its made it a more realistic city. Yes there are still 23 yr old douchebags driving ferraris and spending on average $15k a weekend (clubs are packed, as are bars, though restos are empty), but in general, people are behaving a bit more normally. Europeans knowning if they lose their jobs here have to go back to Europe with a bad economy, horrible job prospects and hire taxes so they are taking less salary, less benefits, and working harder.

The only advantage we have over Ireland is we have a big brother with massive oil reserves that can bail out the irresponsible younger brother so that the "family" doesn't get screwed in the end. and while you still see construction going on, its smart that they aren't building any more islands and monster structures that aren't sustaniable.
For those of us here with realistic lives and jobs, its a great thing: i can now afford an apartment i could never even think about 2yrs ago, and my day to day is less expensive and my chances of bumping into idiots all night every night is drastically decreasing every month.

It still isn't...and will NEVER be Beirut though

[ziz00_909]

[Genesis]

Bronko, that's makes much more sense than I thought it would. I never knew what was going on clearly until now.

Dubai was on telly again yesterday: all those developments by the coast and in the sea have killed 37% of the marine life there... with turtles taking the biggest hit.

[Qulture]

[e-sam]

I will not dwell on the economy part because what was mentioned before my post is MORE than enough. The examples and comparisons give enough info to make a 12th grader understand the real problem behind the Dubai problem. I do have a comment regarding the comparison between Dubai and Beirut though. At first I was one of those speculators who haven't visited Dubai yet gave an opinion about it basing this opinion on facts and numbers read from articles and newspapers. Today however after visiting and living in Dubai I can safely say Beirut will NEVER reach Dubai. Let me clarify myself a bit. Its like Beirut still lives in the year 2000 while Dubai lives in the 2050. A civilized systematic multi-cultured country that actually conducts BUSINESS per man hour. Emirates, Indians, Chinese, Vietnamese, Pakistani, Iranian, Iraqi, Russians, English, Italian, French, German, Lebanese, Syrian, Egyptian, Bangladesh, American, Canadian, Australian, etc... are all living HOMOGENEOUSLY together. I remember when I stood outside Dubai tower watching the water fountain display. I imagined a tower of this size in Beirut. However I immediately imagined political party notes and pictures covering it and later an anti government protest that will seize control and maybe set it on fire. Until we become CIVILIZED we will never reach any city in prosperity and/or fame.

[DiabloK]

As bronx said, Dubai followed a similar strategy that was followed by Ireland and also by England back in the 80's and the whole UK during Tatcher's era, i.e. increase the value of Real Estate, noting that it is mainly owned by locals, and this by encouraging speculation, establish an efficient platform for financial transactions, have cheap foreign labor do the job for the you, and just cash money from rents and mostly-silent partnerships.
2 opposite visions regarding its future: some say that the situation is not as dramatic as it seems, that the bottom is reached and that Abu Dhabi will bail out when needed to prevent a total collapse, awaiting global economy to recover, i.e. 2-5 years. Others would tell you that Dubai will never recover as its Real Estate sector will never be able to recover from the crash. Lots of uncertainty though.

i never was able to understand why people tend to compare Beirut and Dubai.
A 4,000 years old city and a 20 years old one, each has its advantages. Beirut has a weather, has culture, initiative, 10 Million people spread all over the world as well . Lebanon geographic position is an advantage but it is also huge a huge disadvantage, being the weak link in the heart of one of the oldest conflicts still prevailing. Dubai has political stability, which of course, allowed its leaders to have time to plan and create a vision. Of course it is easier to establish a company and make business from Dubai, of course its last economic boom created jobs and opened doors, but as you have all seen, how many dollars stayed in Dubai when the crisis started? everybody pulled out. i.e Dubai was an opportunity for many, but only a punctual opportunity. While Lebanon has resisted so many tougher hurricanes. Speculation v/s investment, there is a big difference and it tells a lot. It depends from what you want, the kind of life you want and of course, it depends on the opportunities you get. i am sure that esam would have never thought twice to live in Lebanon should Lebanon be able to offer him the same job than the one he has abroad.

[TranceFusion]

Amen to Issam!