Country Guides Country Guide: Dubai

Date Published:

18/11/2009

The wheels have well and truly fallen off the Dubai property juggernaut in the last 12 months. So should you buy or avoid?

By Gordon Miller

Where once in the last decade almost a quarter of the world’s cranes swung into action to build the tallest buildings and create hundreds of miles of man-made islands with luxury homes on them, now they largely lie dormant. Consequently, property prices in Dubai are said to have fallen by more than 40 per cent since September 2008. According to an estimate from Morgan Stanley, a financial services firm, projects worth £165 billion have been delayed or cancelled across the United Arab Emirates (UAE) in the last year.

Dubai is one of the seven emirates and until recently its most expansionist. Led by royal decree, His Highness Sheikh Mohammed bin Rashid Al Maktoum has instigated the plans to create a leading centre of business and commerce and a growing tourist hotspot.

Already, Dubai Waterfront has added 500 miles of coastline to the Emirate and a new city centre. Tourist attractions such as the vast three billion square feet Dubailand, which includes Dubai Sports City and 'The Restless Planet’ - a dinosaur theme park, the Islamic Culture and Science World, the Mall of Arabia, which is set to become one of the largest shopping centres in the world, and the Tiger Woods Dubai, is taking shape.

The investment prospects for what was once one of the world’s easiest markets in which to make money – as prices soared monthly, many investors bought off-plan and would ‘flip’ or sell on the property for a quick profit without ever having to pay the full value – look poor at best. Reports of foreign investors being unable to get back their full deposit on stalled projects abound.

Some would say it was always likely to end this way in Dubai as an oversupply of property was simply unsustainable in the long run. Sceptics of the Dubai dream cry hubris was to blame; their schadenfreude is almost tangible.