The ongoing financial crisis has hit Dubai hard and the rather silly approach being taken by the authorities is to pump out press release after press release claiming that there is not a problem. We have gone through phases with these press releases. First – there was no problem and Dubai was immune to the downturn. Then, Dubai was affected, but only slightly, next up – OK, Dubai has a problem, but we are now at bottom.
Or 9% !!!!!!!!!!!!!! or 30%!!!!!!!!!!
More bad news from Dubai. According the the Financial Times, Property prices in Dubai only jumped 7 percent in one quarter as “demand revived” and “lending conditions eased.” Quite who is expected to believe this sort of nonsense is beyond me.
With the end of Cityscape Dubai, Nakheel is planning on another 500 job losses according to “The Independent,” newspaper.
Nakheel, the state-owned Dubai property group that was responsible for the iconic Palm Jumeirah artificial island, is set to make as many as 500 redundancies now that the Emirate’s “Cityscape Dubai 2009″ show is over. Announcements are expected in the next few days, a consequence of fallout from the global financial crisis. Dubai property values have fallen 50 per cent in a year. The company said last night: “Nakheel continues to evaluate its projects and commitments against market conditions and opportunities. In doing so, the company also evaluates its cost base and efficiencies.” Ratings agency Standard & Poor’s said Dubai needs to raise another $10bn (£6.3bn) for its economic support fund, to prop up government-related companies. The independent.
I am slowly coming to the conclusion that the governments and news media think all potential readers are morons. According to this ridiculous press release disguised as journalism, Emirates Business says:
More on Dubai Property Prices Rise Thirty Percent!!!!!!!!!!!!!
This year’s CityScape in Dubai is forcing the industry to face a few harsh realities. Duding the run up to the exhibition, all the major Dubai property developers pulled out, including Nakheel, Emaar and Limitless, although Emaar and Nakheel were touted as “Foundation Sponsors,” and the 2009 exhibitor list on CityScape’s website is still empty. The amount of exhibitors is well down and the usual, “XXX Billion Dirham development!” announcements have been somewhat lacking. I don’t think anyone could have swallowed that this year.
Far be it for me to suggest that the amount of lawsuits being leveled at the major property developers in Dubai is the reason for this, but Nakheel, Emaar and Limitless have all pulled out of this years Cityscape Dubai.
Property investors are continuing to take a bath in Dubai as rents fell once again in August. According to a survey by the Khajeel Times and property management firm Asteco. Some of the more upmarket developments are beginning to stabilize, but with the outflux of ex-pats during the summer, falling property prices and a serious over-supply in most markets, rental prices continued their decline, and in many instances, renters are simply choosing to walk away from a new lease. The requirements in Dubai are a little different in that Islamic law does not allow for credit and renters are often required to pay a full years rent in the form of 4 post-dated cheques. This is an excerpt from the report.
If you were starting to doubt the veracity of the press releases being issued by Dubai, the latest news should settle the matter once and for all. Back in March this year, the major developers in Dubai started canceling projects and refusing to repay deposits. Nakheel, which canceled the Trump Tower in Dubai offered – nay insisted – that investors accept a unit in other developments. This has been argued about since that time, but they are holding out against the suggestion that a unit in a different development is not the same thing – financially or otherwise. Apparently any protests have fallen on deaf ears, and Nakheel have been issuing credit notes on other canceled projects, rather than refund any money.
Dubai Properties, Sama Dubai and Tatweer have merged in an attempt to lessen the impact of the financial crisis. Dubai holding now consists of just 4 divisions instead of the previous 7 – investments, hospitality, property and business parks. there is also talk of merging Emaar properties into this new vehicle.
Worldwide economic downturn brings with it the expectation of mergers and acquisitions, unpredictable pricing in the realms of the sales and rent markets and cautious lending, in a bid to reach a (supposedly) smooth road to market and economic recovery.
