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Steve Chiotakis: Ah, the good old days in Dubai. Sky high hotels — price and height. An indoor ski resort. And there was so much real estate demand there, developers built man-made islands off shore to accommodate. Not anymore. Stephen Beard reports.
Stephen Beard: Nobody in Dubai brags about their property anymore. Even the local advertising industry has fallen silent on the subject, much to the relief of Alex McNabb, a Brit who’s lived in Dubai for 20 years:
Alex McNabb: We’re no longer assailed by this mind-numbing shriek of “iconic, dream, live lifestyle, fantasy” advertising. It’s all gone away, and that’s been wonderful.
Not if you’ve bought into the Dubai Property Dream.
Ahmed Sadozai, a wealthy young businessman from Pakistan, arrived here last summer. He snapped up eight apartments and two villas. His portfolio doesn’t look too hot today.
Ahmed Sadozai: I have lost about 2.8 million so far in market value.
That’s about $800,000 U.S. dollars
Beard: That’s a great deal of money. Are you ruined?
Sadozai: Yes, at the moment I do consider myself to be ruined. That’s why I’m going back to Pakistan in a week.
Average prices have dropped a quarter in the last three months. Some analysts forecast much steeper falls ahead.
Chris Davidson is author of “Dubai: The Vulnerability of Success.” He says that in diversifying away from oil and gas, Dubai became fatally dependent on luxury tourism and foreign property investors:
Chris Davidson: The credit has dried up, so the boom has come to a shuddering halt. The tourists are not coming anymore. People are trying to sell their houses if they’ve already bought into this Dubai dream of foreign property ownership. So we have the resulting spiral downwards.
But Dubai enthusiasts say it’ll bounce back. And even Ahmed Sadozai — nursing his huge paper losses — has not been completely turned off the place:
Beard: No bitter feelings at all then, Ahmed?
Sadozai: Of course not. I mean, I can blame everyone if I want, but I mean at the end of the day, it’s my own fault. I mean, I should have realized the risks involved in this thing.
And he says Dubai will pick up in a couple of years, and then he’ll be back to try his luck again.
In Dubai, this is Stephen Beard for Marketplace.
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