Remember Dubai ?

This is from an e-mail friend in Dubai who is originally from Scotland. He talks about the current economic climate there.

Bob



Hi Bob

What the heck happened???


Simple - Greed Corruption and incompetence by a few that comprise the ruling elite of bankers politicians and CEO's

Suggest you watch "Zeitgeist"

http://www.zeitgeistmovie.com/

Dubai is also broke and an estimated 2,000 expatriates are leaving daily - many leaving behind houses, apartments and cars that are now unsellable even at 25% price of September 2008.

Officially over 3,000 abandoned cars have been collected by police but figure is probably several times that ,as many cars are sitting around in various parking lots. Over 2,000 (2/3) of the official figure were classified "Luxury" BMW's, Porches Etc. Sales of new vehicles have dropped to near zero while prices of 2nd hand have dropped +50% if a buyer can be found.

A 1 year old BMW is now cheaper than a new mini KIA. Personally however wold have KIA (as I do) due to far lower running and maintenance costs. + after 3 years it has been incredibly reliable with only problem a broken ashtray probably due to overuse. I regret I am a heavy nicotine addict.

Dubai became the largest construction site on the planet with 20% of its tower cranes - Now a forest of "Dead and Dying Tower Cranes" and abandoned tower blocks.

Having exhausted its oil (Production is now below 10% of that in 1991) Dubai became a "Cinderella State"

A magic wand turned a square yard of dry salty desert sand into several thousand dollars worth of real estate. Midnight came in October 08.

Over 3,000 real estate companies in this former village were in existence in October 08, a few with up to 1,000 commission paid agents .. All drove around in fancy cars and had phenomenal life styles based on cheap and easy loans in turn based on their commissions on ever increasing property prices and rents that rose over 10 fold since 2001.

What an insane party they had.

Over 400 tourist hotels under construction but traffic was such that it would take hours to get to them or anywhere else. Tourist and business arrivals have dropped +70% and I can now live in a hotel cheaper than renting a studio.

An insane law here to encourage national to buy property was that they did not have to pay back loans unless property was rented out. Result it costs them nothing to sit on empty properties while demanding extreme rents. Result is high rents and as of Nov 08 +40% mortgages in default. Where I am living now is a Cluster of 300 apartment blocks apparently all sold yet occupancy is 10% at most and some nice looking cars are gathering dust in the car parks.

Since returning from holiday in August time to drive around Dubai has about halved.

Dubai property prices rose 43% in first half of last year, Rents even more so.

Why should a studio apartment here have been valued higher than my 5 bedroom house in Scotland which overlooks fields and a golf course.

Greed Corruption and Incompetence of a few has been a worldwide plague.

Regards

Alan