Who do you blame for the Dubai property downturn?

[Nicholas Wallwork]

As the Dubai property market continues to slide it would appear that many different parties are potentially to blame, but "Who do you blame for the Dubai property downturn?"

Have your say on the thread and in the above poll.

 

[samsaf]

As the Dubai property market continues to slide it would appear that many different parties are potentially to blame, but "Who do you blame for the Dubai property downturn?"

Have your say on the thread and in the above poll.

Should you add "The Global Economical Crisis"?

 

[Wannaberich]

Should you add "The Global Economical Crisis"?

Of course because this is where the blame lies.

 

[Nicholas Wallwork]

Initially the Dubai property market seemed to be seen as something of a "safe haven" after the credit crunch and recession started to bite in other parts of the world. Was this an oversignt by the authorities? Were property sales agents guilty of pushing the market as a "safe haven"?

Or did the recession just take a little longer to hit Duabi?

 

[PropGuy]

make it multiple selection, that would poll better than "mix of above"

 

[Wannaberich]

Initially the Dubai property market seemed to be seen as something of a "safe haven" after the credit crunch and recession started to bite in other parts of the world. Was this an oversignt by the authorities? Were property sales agents guilty of pushing the market as a "safe haven"?

Or did the recession just take a little longer to hit Duabi?

Like u say,I think the authorities did not really appreciate how much it would impact.
Arrogantly they almost thought they could by-pass it.
Now when most other goverments are taking action,injecting cash into the banks,lowering interest rates,the Dubai goverment sits and does nothing.
Fantastic.

 

[sasherwani2]

Many reasons but all reasons directly or indirectly linked to poor rules and regulations resulted by greed.

The Authorities!

 

[PropGuy]

You can add economic cycle too.

 

[Wannaberich]

Can we add something I call the' Sasherwani Syndrome'. ?
Its when the doom and gloom spread by certain people panics investors into panic selling at low prices therefore driving prices down.

 

[georgihh]

Can we add something I call the' Sasherwani Syndrome'. ?
Its when the doom and gloom spread by certain people panics investors into panic selling at low prices therefore driving prices down.

Unfortunately we keep on losing and we don’t know for how long.
Remember Malaysia if not go make some pictures.
What goes up comes down

 

[financier888]

Globald

The Global Economic crisis - namely US investment bankers and the lack of regulation. Very, very few were able to make this call and the global aftermath. No one expected it would hit their area this bad - including the President and PM of Iceland!!? With businesses world over crashing and rising unemployment, Dubai has especailly been hard hit because of the large amount of expats that made this market. With businesses way down and many people either losing their jobs or are about to - of course, there are very few buyers. Even had Dubai had more stringent regulations in effect, that could not make-up for no buyers and the liquidity crunch. Unbridled greed , minimal oversight and lack of political will in the USA brought this about and there are no qiuck fixes... We simply have to carry-on and learn from this experience.

 

[samsaf]

The Global Economic crisis - namely US investment bankers and the lack of regulation. Very, very few were able to make this call and the global aftermath. No one expected it would hit their area this bad - including the President and PM of Iceland!!? With businesses world over crashing and rising unemployment, Dubai has especailly been hard hit because of the large amount of expats that made this market. With businesses way down and many people either losing their jobs or are about to - of course, there are very few buyers. Even had Dubai had more stringent regulations in effect, that could not make-up for no buyers and the liquidity crunch. Unbridled greed , minimal oversight and lack of political will in the USA brought this about and there are no qiuck fixes... We simply have to carry-on and learn from this experience.

Well said..

 

[DelboyG]

The Global Economic crisis - namely US investment bankers and the lack of regulation. Very, very few were able to make this call and the global aftermath. No one expected it would hit their area this bad - including the President and PM of Iceland!!? With businesses world over crashing and rising unemployment, Dubai has especially been hard hit because of the large amount of expats that made this market. With businesses way down and many people either losing their jobs or are about to - of course, there are very few buyers. Even had Dubai had more stringent regulations in effect, that could not make-up for no buyers and the liquidity crunch. Unbridled greed , minimal oversight and lack of political will in the USA brought this about and there are no quick fixes...

Sorry to say guys, but take the above, remove 'USA' and insert 'Dubai' and you get the same story!

[/QUOTE] Unbridled greed , minimal oversight and lack of political will in "Dubai" brought this about and there are no quick fixes... [/QUOTE]

USA has 'Toxic debt' bought on by mortgages handed out to people who could not afford them...

Dubai has 'Toxic debt' bought on by property purchased by people who could not afford them...

Get my drift, not much difference really is there?, only in the % number of defaulters, USA will be much less. Ohh that and the fact that the US government will bail out their citizens, maybe the UAE government will bail out their citizens too.

I'd like to get your view on percentage numbers of defaulter before this is over?

 

[sasherwani2]

In the US, the Government isnt a developer. There is no conflict of interest there.

 

[financier888]

Sorry to say guys, but take the above, remove 'USA' and insert 'Dubai' and you get the same story!

Unbridled greed , minimal oversight and lack of political will in "Dubai" brought this about and there are no quick fixes... [/QUOTE]

USA has 'Toxic debt' bought on by mortgages handed out to people who could not afford them...

Dubai has 'Toxic debt' bought on by property purchased by people who could not afford them...

Get my drift, not much difference really is there?, only in the % number of defaulters, USA will be much less. Ohh that and the fact that the US government will bail out their citizens, maybe the UAE government will bail out their citizens too.

I'd like to get your view on percentage numbers of defaulter before this is over?[/QUOTE]


You make a good point. However, the collapse of the Dubai real estate market would not trigger a global recession or depression as the case may appear. It was the large amount of the USA toxic debt that was then bundled into various investment instraments (derivatives etc..) and then flogged off to many institutiional investors that have crippled the world. The $80 billion debt load of Dubai is a drop in the bucket compared the trillions the US has to plow in and they are 'hoping' this will work... But, you are right. Too little , too late as the case seems. - Within the coming months we'll get a cleared picture of the number of developer defaults..

 

[markgoodwin]

Simply put, lack of financial liquidity and severe economic downturn are to blame. Like many markets we have seen, although maybe not as acute as Dubai, a bubble developed.

Growth of this magnitude is unsustainable.

What I would say is the current conditions probably had warning signs a long time ago, however they were probably shielded from the masses until it was too late!

 

[financier888]

Simply put, lack of financial liquidity and severe economic downturn are to blame. Like many markets we have seen, although maybe not as acute as Dubai, a bubble developed.

Growth of this magnitude is unsustainable.

What I would say is the current conditions probably had warning signs a long time ago, however they were probably shielded from the masses until it was too late!

You got that right - the large investment banks weren't about to come clean and see their share prices plummet and effect their bonuses... First they had to bail out AIG - then Lehmans went south, Meryl Lynch started to tank and their stock crashed- seemingly overnight trillions started to be wiped out. gone.. The signs were there in early summer but without proper oversight and regulations - the true picture did not emerge - till after the 'horse left the barn' as they started to close the door - as the expression goes. We still don't have all the facts...more to come.

 

[financier888]

Sorry to say guys, but take the above, remove 'USA' and insert 'Dubai' and you get the same story!

Unbridled greed , minimal oversight and lack of political will in "Dubai" brought this about and there are no quick fixes... [/QUOTE]

USA has 'Toxic debt' bought on by mortgages handed out to people who could not afford them...

Dubai has 'Toxic debt' bought on by property purchased by people who could not afford them...

Get my drift, not much difference really is there?, only in the % number of defaulters, USA will be much less. Ohh that and the fact that the US government will bail out their citizens, maybe the UAE government will bail out their citizens too.

I'd like to get your view on percentage numbers of defaulter before this is over?[/QUOTE]


% of defualters? very good question. Usually you'd get this information from banks - who handle the mortgages in those markets where the majority of buyers get mortgages... Even if the banks released that info here - it may not accurately represent the rate of defaults of buyers that purchased off-plan and I doubt any developers want to disclose that. There are also no Brokerage or Developers Associations that would collect and collate this data.

With rising unemployment here - hitting the higher wage earners that can afford mortgages - making finance available will have little effect or positive impact. No matter how easily available the funding is or how cheap - if you think you may be losing your job - you're not going to run out and get a mortgage. Especially if you lose your visa when you lose your job! The other factor ( as you know) is the state of foreign economies where most of the buyers originate... The drop in sterling is huritng the UK investors - who are also facing unemployment issues - declines in business in India, falling currency values in Pakistan, The Russians are staying home etc... it goes on and on...ugh... On a more encouraging note - I expect to see the infusion of a new demographics of buyers coming into this market. (later in the year) This would be the natural progression is such a thing exists!!

 

[markgoodwin]

Bail Out

The UAE may bail out their own citizen defaults, but they will put expats behind bars. What a mess!

Who saw the article recently about the number of high end cars being left by ex-pats at the airport with the keys left in the ignition, because they had to bail out of Dubai or face jail for loan defaults?

The whole world partied for 10 years with cheap, frivolous credit. The hangover is here and its a lot worse than many expected!

 

[markgoodwin]

Goldrush Mentality

Unfortunatley, bubbles in markets and greed are far from a new phenomenon.

Look at the internet in the nineties or even tulip bulbs hundreds of years ago. When a hugh bull run starts, people take leave of their senses!