Amazing how similar these things are no matter where I look - Dubai, Miami, Ireland, Phoenix, ...
same stock-art photography (I swear every 21 year old kid must be a millionaire - and like wine)
Dubai.. heard it gets to 130F in the summer. Nice place for a $1 Million 1000 sq. foot condo...
Here's a good article - and good warning:
On Sunday, I took a tour of the Blue Mountains here in Australia. (The kids loved part of this trip… where they got to feed and play with kangaroos freely walking around, and pet koalas, etc.)
My wife and I struck up a conversation with a couple sitting next to us on the bus…
“Where are you from?” we asked.
“The kids are in California, but we’ve now moved to Dubai,” they answered.
“How’d you end up in Dubai?” I asked. They lit up…
“He’s a pilot for Emirates airlines. We absolutely love it!”
“Isn’t there a real estate bubble underway there?”
“Oh, well, we’re hoping for another double…”
No joke… that’s what they said. And then the husband said the secret phrase… “you know, the National Bird of Dubai is the construction crane.”
“Say no more,” I said.
February 26, 2006
I'm seeing a lot of ads for pre-construction condos in Dubai... you know what that means!
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5 comments:
Unless you've been there Dubai is like no other place on Earth. It has all the money of Saudi, but few of the restrictions. Rich people from all over the Middle East come to UAE to spend, and live their lives free of religious police.
I have no doubt that after oil runs dry Dubai is screwed but I don't know when that will happen. The entire place was built up by foreign labor...it's like Epcot.
All Real estate bubbles have a (almost) plausible explanation. But anything that can't go on forever won't. Bubbles can run up and collapse several times before "The end", but every story has an absolute ending:
East Texas (1980s)
Story:Oil and the super collider. Ending: 1990s Oil bust.
Ireland (1995-200?) Story:Immigration, avoiding evil landlords e.g. "The field"/"Angela's Ashes.."
Ending:2009 when other E.U. contries are required to take immigrants from new eastern european members. Or when, on a slight economic decline, xenophibic Irish change the laws to force immigrants (i.e. tenants) to leave, reversing this immigration trend.
NYC
Story:It's New York City
Ending:When baby boomers retire.
South Florida
Story:It's God's waiting room (where baby boomer's retire)
Ending:When baby boomers buy that condo (farm?) in the sky.
California(1990s, 2000s)
Story:Hey, this is CALIFORNIA!
Ending:When industry and jobs are priced out.
Arizona, Oregon, Nevada
Story:It's still cheaper than California.
End point:When California bubble pops.
Dubai
Story:Oil money + freedom
Ending:When the oil runs out or when another middle eastern nation offers economic and religious freedom.
Actually, Dubai has very little oil.
The Emir of Dubai(Maktoum ) is a very smart man. He architected the whole thing 25 years ago to plan for "non oil" based industry. Dubai has the 2nd largest port in the world after Singapore. Their economy is main based on trade and commission. They have also started last year a financial hub and plan to become the wall street of the middle east. They also have a huge duty free system. It is not all oil. Mohammed Maktoum is the brains behind all this. He is following Lee's philosophy (Founder of Singapore).
wwIII = dubai is screwed
Dubai is not screwed. Dubai's fundamentals are solid and promising.
Let me add that there are different fundamentals driving the property market in Dubai. There is no widely developed mortgage industry, so 90% of the buyers pay cash. Yes, cash. This may seem alien to the US crowd, but people here have very little dept if at all. These are real cash transactions and most of the buyers are foreigners. The bubble exists because the Emir extended the ownership of property to foreigners for the 1st time in 2003. Before then, Foreigners could not now property in Dubai. Other Emirates in the UAE are following suit by entending ownership to non nationals. Also, 75% of Dubai's population are foreigners.
Now you see the bubble has completely different fundamentals than the US.
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