Dubai Property Market & Economy In Free Fall!

Dubai Property Market & Economy In Free Fall!

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Newspapers have reported that more than 3,000 cars belonging to debt-ridden expats have been abandoned in Dubai’s international airport car park. These scared, unemployed expats have taken off due to fears of ending up in a Dubai prison for their inability to pay their outstanding bills.

Notes of apology taped to car windscreens and maxed out credit cards on the car seats are all too rife at the moment. This is indeed a stark contrast to the Dubai we heard and talked so much about in the last couple of years – the land of opportunities were money was flowing freely and jobs were available 24/7.

It seems THAT Dubai is no longer a reality today with overseas buyers leaving the Emirate in droves and job cuts ruining investor’ lives.

However, even if those stories are embellished, fact is that trouble is brewing and has been in Dubai for some time now. This is clear when you hear stories such as that of Sofia, a 34-year-old Frenchwoman who moved to Dubai a year ago. She got a good paying advertising job, bought a house with a mortgage of US$300,000 and a 15-year mortgage and now she lost her job and fears the worst.

With over 90 percent of foreign workers employed in Dubai many now fear that they will be next to be sent packing. The problem for them is colossal, because once they lose their jobs they also lose their working visa and must leave the country within one month (not a lot of time to sell your property and pay back your mortgage).

Suspended Construction Work

Several projects have had to be cancelled and suspended due to developers’ lack of finance. And while the government is unwilling to clear the air about exactly how bad  the economy is in Dubai, rumours are rife and flowing.

To make matters worse, a reported new draft media law would prohibit anybody from damaging the reputation of Dubai with fines of up to about $272,000. Some report this is already having a chilling effect on reporting about the crisis.

Last month, local Dubai newspapers claimed that the Emirate was cancelling approximately 1,500 work visas daily, while citing unnamed government officials. Humaid bin Dimas, a spokesman for Dubai’s Labour Ministry, told the News York Times that he would neither confirm or deny it.

With the global economy in tatters, many believe the worst and are worried about the future.

Real estate prices have dropped by 30 percent or more over the past two or three months in some parts of the city.

Some analysts also speculate that the current crisis will affect the UAE’s seven other Emirates, where Dubai has long played the rebellious younger brother to oil-rich and more conservative Abu Dhabi.

Previously seen as a refuge by expats, Dubai is no longer seen as the shiny real estate knight. Some nasty rumors spread quickly: the New York Times recently reported that the Palm Jumeirah, an artificial island that is one of this city’s trademark developments, is said to be sinking, and when you turn the faucets in the hotels built atop it, only cockroaches come out.

Is it all true?

You tell us. If you live in Dubai, work in Dubai or have previously lived there, let us know what is really going on from your perspective.

Photo credits: Saharsh via Flickr