Dubai property bubble bursting

"Welcome to Dubai Aromatic City: enjoy an exclusive lifestyle by the azure-brown waters of the Arabian Gulf, or take a dip in your villa's private cess-pool as you watch the rich rivers of effluent run down to the sea,"

Dubai is in the shit in more ways than one. Raw sewage flowing onto tourist beaches is foul enough, but fouler still would be a property sector meltdown:

Then, over the summer, Morgan Stanley issued a note which said that Dubai property prices would fall by 10% by 2010. Quite simply, there may not be enough demand for the wave of new property coming onto the market. To a society used to easy returns, this was a shock.

It's not actually a shock to anyone who bothered to do a few sums on a pocket calculator, as Matein Khalid did back in 2005. He predicted a glut by 2008, which a later report by EFG Hermes also indicated.

Moody's is also bearish: it believes that Dubai may have to borrow from Abu Dhabi or the federal UAE government (which is basically the same entity). The cost of insuring Dubai Holding's bonds have quadrupled since May.

Even Gulf News reports gloomy tidings from Colliers International and from Citi:

"In our view, there is legitimate concern the Dubai market is enduring a liquidity squeeze, witnessing macro-economic and credit deterioration in most of the countries from where its expat buyers hail, maturing from a regulatory perspective and seeing the beginnings of a shakeout of small developers," said an analyst in yesterday's Citi Research real estate report.

No wonder that 75% of Arabian Business readers wouldn't touch Gulf real estate with someone else's bargepole.


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Sharjah purity test

In the 1980s there was a popular UK sitcom called The Two of US starring Nicholas Lyndhurst and Janet Dibley as a couple who lived together. The comedy would be somewhat incomprehensible by today's more enlightened mores, but the entire source of the humour derived from the fact that the couple was "living in sin".

There's one place that The Two of Us would still create shock and awe: modern-day Sharjah. Along with supposedly gentle comedies such as Man About The House, How I Met Your Mother, Two Guys, a Girl and a Pizza Place and even Frasier. Because police from the stone-age emirate are busy raiding "mixed-sex" housing. Note that this does not specifically mean couples, but any house-sharing arrangement with mixed gender flatmates and so on:

"The majority of shared apartments were in Al Majaz, Al Nahda, Abu Shagara and Al Mamzar.

"Shared villas were found to be dominant in low-cost Arab homes in Maysaloon, Al Nabba'a and Um Khanoor, which were mostly inhabited by Asians and Africans."

Those that can't resist the idea of having "Abu Shagara" as their address should first take the Sharjah Purity Test. Here's the female version:

SHARJAH PURITY TEST

1. Have you ever shared a car with: a male schoolfriend (-1) a male cousin (-1) your sister's husband (-1) your father's male cousin (-1) a male work colleage (-1) a male friend (-10) a male boyfriend (-100)

2. Have you ever gone to the mall wearing: knee-length shorts (-1) three-quarter length sleeves (-1) a t-shirt (-2) a tank top (-10) hotpants (-10) a crop top (-20) a bikini (-50) a thong bikini (-100)

3. Have you ever: drunk alcohol (-1); drunk alcohol without a licence (-5); bought alcohol from duty free (-5); bought alcohol from the Hole-in-the-Wall (-20)

4. Have you ever been in a private place, such as an office or hotel room, with: your male boss (-1); your male doctor (-1); your male cousin (-1); a male work client (-1); a male colleague (-1); a male schoolfriend (-1); your aunt's husband (-1); your fiancee (-50); your boyfriend (-100)

SCORING: 0 to -10: $3,000 fine; -11 to -50: six months in Al Slammer; -100+ stoning/beheading/deportation

The rich man in his castle

Why is the Red Crescent having to help out Emiratis rather than the multi-trillion dollar rich-as-Croesus UAE government whose sheikhs and their multitude of wives and children must be bathing in liquid gold with oil prices currently close to $100 a barrel?

Dr Salah M. Al Ta'ei, Acting Secretary General said the nine branches in the country will identify the Emirati beneficiaries for the house renovation project.

"We concentrate in renovation or maintenance as the federal and local governments have been successfully providing new houses to the needy under various schemes."

Maybe rather than fitting out your next palaces with solid diamond windows and platinum taps, Sheikh Mohammed and Sheikh Khalifa, you'll instead consider putting a few fils the way of your needy population to buy blankets and curtains.

The Red Crescent can concentrate all its money on the needy in desperately poor, war-torn countries such as Palestine and Sudan.

It's a fucking disgrace that a charity is having to help out the Emirati population, rather than their own government.

Happy to be a bachelor boy

When I was widowed my landlord said
"Sir I have something to say"
He told me to get out and never return
Until my dying day
He said "Sir, you are a bachelor boy
"And that's the way you'll stay
"Sir, we don't like bachelors here, so please go far away"

Picture the scenario: a married western oil executive - six figure salary/luxury apartment/prestige car - is suddenly, tragically widowed. His company and friends rally round, fix the funeral, arrange for him to have some time off. After the memorial service held at Jebel Ali Religion City, the executive returns to his flat to spend some quiet time grieving.

No sooner has he poured himself a drink and settled down to read various condolence letters than he hears a huge bang. The door is kicked open and the Emirates Elite Eviction Squad storms in.

"This is a family building! Evacuate the premises immediately!"

Shocked, the oil executive starts to protest but it is no use. He is now a bachelor. By definition he is a troublemaker and a pervert, a disruption to the sacred tranquility of neighbouring families. He has no right to live among these normal, decent people. He must relocate at once to bachelor accommodation.

That night, as waits to use the grimy bathroom shared with forty other bachelors in his new shanty villa, he worries that his new bedspacemate will be a snorer. There is no air conditioning so he is also anxious about the onset of summer and arriving at the office each day in a sweat-stained, dusty suit.

There were no parking spaces available near his shanty villa, so he has to cross Sheikh Zayed Road on foot each day to reach the bus stop on the other side. The executive is not quite sure how he will cross the barrier, perhaps his bedspacemate can loan him some wireclippers or a small rope ladder? But several planned pedestrian crossings, that should be ready in a year or so, are at least something too look forward to.

The concrete curtain

A few years ago an associate was commissioned to copywrite a brochure for a new real estate development. All the material was sent through, which details such as location, type of building, market segment, main features and so forth. The associate quickly spotted what seemed to be a mistake, and called the agency. "It says forty towers in the information. Did you mean four?"

"No, it's forty towers."

"On that one strip of land? Will they fit?"

"They'll have to fit."

Roll forward to 2007, and the huge lumbering concrete monstrosity that is Jumeirah Beach Residence has indeed been crammed into the strip of land between Dubai Marina and Jebel Ali power station. So little thought was given to proper planning that no room was left to put in adequate roads, let alone parking:

[Head of Roads Planning Section Hashim Mohammed] Al Hashmi revealed that a high quality public transport bus service would be introduced for the residents of Dubai Marina and Jumeirah Beach Residence. "The corridor in this area is too narrow and since the buildings have come up little can be done about it."

Drive around Jumeirah Beach Residence at any time of the day and it is shocking how dark and shadowy the narrow roads are, in a city usually so brilliantly sunlit as Dubai. The towers cut off the sea, the sky and the sunset like a huge concrete curtain. As National Geographic put it:

"Some critics are questioning the speed of change and a lack of planning: The towering apartment complexes stand like a wall, cutting off the rest of Dubai from its coast."

So who's going to live there? There may be millions more workers pouring into the UAE, but how many of them - even white collars - can afford to rent at JBR, let alone buy? Two years ago, analyst Matein Khalid gave these predictions:

"But in 2007-2008, a phenomenal 200,000 new units will hit the market. This means that we need about 800,000 new expats who are not labourers, housemaids, tailors, minimum wage bachelors or the Sharjah/Ajman commuters to fill this unit. In essence, a doubling of the professional high income salaried population of Dubai in the next two years. Realistic? Not at all."

And now a report from investment bank EFG Hermes is in the spotlight, with analysts noting "overbuilding on a heroic scale":

"The report suggested Dubai has a demand for 40,000 to 50,000 residential units per annum. But it failed to make the point observers have added since that only 30 per cent of this demand is in the luxury sector which comprises the majority of construction projects.

"This could leave the real level of annual demand for new high-end properties in Dubai at 15,000 units per annum, which was also suggested by figures forecast in a recent report on the population growth outlook until 2010 from the Dubai Chamber of Commerce and Industry."

Jumeirah Beach Residence: on course to be the world's darkest, emptiest, luxury skyscrapers.

Thou shalt reside in my smelly hovel

Some sense in the courts for an Al Ain wife who didn't like living in the "stinking accommodation" her husband provided her:

"The woman had filed the lawsuit in Al Ain Shariah Court of First Instance against her husband seeking a ‘proper accommodation’, claiming the one provided by her husband was not fit to live in — being quite old and in dilapidated condition with horrible smells.

"In return, defendant husband filed a counter lawsuit in the very court demanding his wife to obey him, and take his permission before going outdoors."

Chances of this couple reaching their golden wedding anniversary: snowflake/hell.

Grim news in the gulag

One of the few things that Dubai ever got right, property-wise, was the lovely leafy gulag surrounding Cell Block G. "Guantanamo", "Karama-by-the-Sea", it has been known by many different names and universally loved. At least since they built Ibn Spud mall, and the Great Rent Apocalpyse erupted throughout the rest of the sandlands.

On first being confined to Cell Block G, back in March 2003, the wardens were struggling to attract inmates. One associate got a free month's rent for taking a ground floor cell, because there was such low demand.

Six months later there was a waiting list of 300 people.

One year later there was a waiting list of 3,000 people and it cost Dh9,000 just to get your name on.

A year after that, the waiting list was closed, and it was down to luck or wasta.

And now they plan to tear half of it down. No one knows why. The saddest thing is that Cell Block G and its surroundings are a model housing project that Dubai could and should have shown off to the world. Beautiful landscaping with - in the main part - sustainable, hot-climate vegetation. A clever road system that kept much of the development pedestrianised. Spacious, affordable accommodation built to a decent standard at a relatively low cost. Nearby amenities and community leisure facilities.

But Dubai has never thought to flaunt The Gardens. Instead, it touts its hideous, overpriced poorly built, appallingly planned tower blocks because they make more cash per square inch of concrete. The Gardens is unique to Dubai and it is worth preserving, promoting and emulating. It is arguably the Bastakia of the new millennium.

"Happy New Year, Sir!"

"Now kindly pack your bags and fk off!"

Here's what was written:

DUBAI — The Dubai Municipality is scheduled to begin the eviction drive against bachelors staying in residential areas this February. Though the deadline for its completion is February next year, officials say it can take a couple of years.

Engineer Walid Abdul Karim of the Building Inspection Department of the Dubai Municipality told Khaleej Times, "According to the initial plan, the eviction drive will be starting from February and will be completed by February next year. But it can take almost two years."

Here's what in a humane, progressive, moral society, should have been written:

DUBAI — The Dubai Municipality is scheduled to begin the relocation of single workers to dedicated accomodation this February. The purpose-built housing was designed to be affordable and comfortable for expatriates working in construction and related industries.

Engineer Jamal Abu Dishdash of the Housing Department of the Dubai Municipality told Khaleej Times, "Now that the first stage of the special accommodation for single expat workers is complete, we will begin to help these people relocate. The new accommodation has been built to a high standard with full amenities and transport links to work and leisure locations. Every assistance will be given to help people settle in to their new homes."

But no. Dubai doesn't give a shit about these bachelors, it just wants them gone. Many of them will end up sleeping on rooftops and in parks and on the street, but no one cares. God forbid they consider finding them alternative accommodation before chucking them out.

Manic Sunday

Five o'clock already
And the mosques are all beginning to wail
I was kissing Valentino
And they caught me and they threw me in jail

But I can't be late
Because I gotta drive Al Shittihad Road
These are the days
When you wish it all would go and explode

It's just another manic Sunday
Wish it were Friday
'Cause that's my dead day
My don't-get-out-of-bed day
It's just another manic Sunday

Have to cross the bridge again
Gotta be at work by eight
And if I had a sheikhmobile
I'd still be three hours late

'Cause the Sunny in front
Can't go faster than two miles an hour
And the roads are all blocked
Where they're building yet another bloody tower

It's just another manic Sunday
Wish it were Friday
'Cause that's my brunch day
My all-I-do-is-lunch day
It's just another manic Sunday

All of the time
Why do they seem to want to drive us out
Of this town?
Nobody cares
That the rents are up
And the pay is down

They tell us when we start to moan:
"If you don't like it, you can go home"
Time it goes so slow
When you're stuck in traffic...

It's just another manic Sunday

Your body for a bedspace

But look at my hopes
Look at my dreams
The currency we've spent
I love you
You pay my rent

It's about time Dubaians stopped whingeing about soaring rents and overpriced accommodation. The reality is that there are plenty of cheap flats available, with free "nice friendship" thrown in to boot:

One advert, on a well-known Dubai website, says: "If you are looking to have a room at an affordable budget then I have an offer for you: Male expat, 36 years old, nice looking with good manners, is willing to rent a room against casual acquaintance and intimacy. We shall discuss further details if you agree on the main idea."

Sadly most offers are currently only open to young, single, "broad-minded" Western women. But it's a start. As this exciting new market matures, it will surely expand to other demographics. Married, narrow-minded African men, or elderly, fun-loving Mongolian ladies will also be in huge demand in return for a bedspace.

Eventually, a unified common currency of "intimacy dollars" will be formed, to define exactly how much friendship should be paid per month for a studio flat in Satwa, or a five-bedroom palace villa in Jumeirah. Estate agents will be paid their commission in this new currency, and DEWA will enable online payment of the 5% municipality tax in intimacy dollars (via webcam, perhaps?)

Getting shirty

It's those damn bachelors again! Not content with offending "families" by their single status, they're now putting on a strip show:

Families living close to their building complained to Gulf News that the bachelors have made it impossible for them to sit on their balconies. They also maintain that some bachelors make lewd comments at women who are standing on nearby balconies.

"They stand on their balcony semi-clad and ogle at women," said a resident who did not want to be named.

Back in the dusty depths of Bur Dubai, long before confinement in Cell Block G, a community of bachelors lived opposite in a kind of shanty building down a narrow lane. There were masses of them living in this shack-like structure, with its corrugated iron roof and general jumbled appearance. Often they wore lunghis or loin cloths with a shirt. Their air conditioning would have been limited and primitive, if they even had it at all.

They never ever stared at or harassed anyone. If spoken to, they were polite and respectful. They lived crammed into their tiny, grim building while brand new concrete "family" blocks sprung up all around. They were far nicer than the "families" that would often glare in a hostile manner. The bachelors were there first. They will not be there last. But where they will go is anyone's guess.

Dubai, The City That Doesn't Care

This Ramadan a new promotion is taking place: "Dubai, The City That Doesn't Care."

The original City That Cares charity campaign, which raised money for children in Afghanistan and Palestine, was cancelled because it got in the way of non-altruistic, purely mercenary festivals:

"[A DCCI official] said the decision followed a study that showed the market would not respond to another commercial campaign sandwiched between the landmark Dubai Summer Surprises (DSS), and the Dubai Shopping Festival (DSF) in December.

"We are trying to focus more on the commercial sides in future," the official said.

And what a super way to kick of "Dubai, The City That Doesn't Care" - by cutting off the water and electricity of thousands of "bachelors" in time for the holy month!

"We were told to go and search for rooms in Al Rashidiya and other areas but in vain. We don't know where are we going to live," he said.

"Most of us did not go to work because we don't have water even for drinking and toilet use. We are desperately searching for accommodation but without success. Flats are very expensive and beyond our price range," said Jamil Mohammad, who has been living in Abu Hail for the last 20-years.

Toil two decades of your life in the sandlands, and this is the reward you get.

Racy lady

"So who exactly are all the people that are going to come and live in these places?"

Margery unwittingly asks the billion dollar question as we drive past yet another mega-luxury-property development. Every time the spinster schoolmarm visits Dubai for her annual oil sheikh hunt, the emirate is barely recognisable. But this year the billboards, construction, new towers, hotels and housing projects are overwhelming.

And we can't answer her, because no one really knows. Though who can forget Matein Khalid's worrying calculation?

One project Margery gets to see for the first time is Dubai Autodrome, where - wearily predictably - she is instantly surrounded by a vast convoy of racing drivers keen to demonstrate their fuel injection and expert handling.

As she fends them off onto the more seemly subject of Dubai's development, one of them makes a sad prediction:

"The way they are putting up hotels everywhere, this racetrack could well become just another themepark. And it will kill real motor sport in the emirate."

Crowded house

The family of 54 living in a one-bedroom villa in Al Ain is sad but not suprising. Rents are now so high in the UAE, with no parallel rises in salaries, that poorer locals and expats alike are living in third world conditions:

One bedroom, a small hall, a tiny bathroom and corridor converted into a kitchen, serve as the house for a family of 54 members.

Saad Gubaish Al Yehyaey said: "we are a very big family and live in this small and old house which itself needs to be demolished and rebuilt."

A media associate recently viewed a villa at the Meadows, to find it was currently being inhabited by five Indian families including numerous children:

"It was a three bedroom villa. They had a family in each bedroom, plus one in the study, and one in the maid's room. They even had a sofabed set up on the landing."

Eye on Dubai

Dubai is making more headlines than Paris Hilton these days. And unsurprisingly, there's as much dirty linen as glittering party frocks hanging on the line.

The Sunday Times exposes the victims of the "Light House Affair", a multimillion dollar property fiasco. Due to be finished last month, the planned Marina tower is a few abandoned foundations in the sand:
“We could lose our money, our flat, our future — everything,” says Roger Blakeley, 46, from Lancashire, who has put down £90,000. “We chose Dubai because Sheikh Mohammed (the emirate’s ruler) assured western investors their money would be safe. It’s time for Dubai to show that foreign buyers have rights and are protected when things go wrong.”

The admittedly partisan and patchily written DAFKA comes up with the bizarre theory that falconry is funding Al Qaeda. According to former UAE falconer "Alan Parrot":
“The Sheiks fly into hunting camps in Pakistan and Afghanistan on C-130 military cargo planes filled with SUV’s, supplies and even steamer trunks full of cash. They meet with al Qaeda leaders or bin Laden himself while in these camps and discuss their Muslim obligations and unity. When they leave, they leave all the vehicles, supplies and any other useful equipment behind as donations to al Qaeda for its efforts at jihad."

The Sun reveals the details of Naomi Campbell's million-quid birthday bash at the Burj:
"The party, starting on Sunday, is being hosted by Naomi’s boyfriend — multi-millionaire Dubai playboy Badr Jafar. Each of the three days will be themed, with Sunday dubbed “All White”."

And the Pittsburgh Tribune-Review wades through the gleaming hotels, booming business and mega projects to reach the stunning conclusion:
"So beneath the glitz and gleaming skyline Dubai is a theocratic Islamic state that no American would want to be a citizen of for more than an hour."

Well, as they keep kindly pointing out to us, none of us non-dishdash will ever be citizens here or have any political rights. We're just "guests", temporary people, visitors, here to make a few, increasingly worthless oily dollars, so move along, move along.

Timeshare Dubai-style

Welcome to the concept of a bedspace. A bedspace is a timeshare in a bed. It is used by people in Dubai - generally Asian migrant workers - who are so poor that they cannot even afford to rent part of a room.

Instead they team up with someone working an opposite shift - perhaps a night watchman - and share the bed at different times. Quite what happens on the weekend is anyone's guess, but it's doubtless even less comfortable.

Interestingly, the bedspace has a long and glorious history in Dubai. Back in the early days of the oil boom, when there were few hotels and thousands of foreign businesspeople arriving by the day, the Intercontinental on the Creek used to double-book beds. It was quite normal, if disconcerting, for a German businessman to arrive back at his room to find a sleeping Syrian businessman occupying half of it. Or for a British oil executive to wake up in the morning to the sound of a Dutch counterpart arriving with his suitcases.

How times haven't really changed at all.

Green obscene

Behind the trees and flowerbeds of the deceptively tranquil Green Community housing development (million dirham concrete blocks in the middle of the desert) lies a seething underworld of infidelity and depravity.

One separated wife and her new partner have even taken to lurking behind palm trees with a long range lens, trying to get a snap of her husband and his mistress, who live a few doors away. This after the spiteful hubby informed on his ex-wife and her lover to police.

"It's so far from anywhere there: you don't want to go anywhere because of the traffic, so there's little else to get up to," one Green Georgina explains sadly. "But I don't know what happened to just playing Scrabble or Monopoly of an evening."

Or Twister?

"Ah, well that's where it all starts," she confides.

Hooker, line and sinker

What a fascinating list of excuses this allegedly robbed former Yugoslav soldier comes up with as to why he was in a hooker's flat in the first place.

His lawyer claims he's still "suffering mentally" from the war in Kosovo.

He claims he was "simply looking for furnished accommodation".

And according to 7Days, he just wanted forty winks:

"They went to her apartment for a rest, where he said he was shocked when she took off her clothes and asked for sex. He told the court he refused and left the apartment, but realised he had lost 4,000 euros."

That works out at 100 euros per wink. Or should the spelling of that last word be slightly different...?

UAE landlords reply to 7Days

Dear 7Days,

Re: your open letter "Explain Yourselves"

"An open letter from 7DAYS to UAE landlords: tell us why rents are sky high"

1. Because we're greedy.
2. Because we can.
3. Because we couldn't care less about driving you out of your homes.

We hope that this sufficiently answers your query.

Yours sincerely,

UAE landlords

PS If you try with any of the rent tribunal crap - we'll announce a "refurbishment". You'll be out on your expat ears and we'll have new tenants moved in at treble the rent within a week.

High rise, high risk

UAE stock markets are spiralling southwards this week, partly due to property giant Emaar's disappointing performance.

The property market itself has been softening, at least according to analyst Matein Khalid:

"As plunging premiums in and the post summer Ice Age in secondary sales on Dubai residential towers suggest, there are elements of an old fashioned glut in the apartment market and buyer disillusionment on delivered properties, even in bellwether projects. This is not an opinion but a simple fact of life, a reality passionately denied by real estate brokers."

Last year Khalid offered this interesting calculation on a likely apartment glut:

"But in 2007-2008, a phenomenal 200,000 new units will hit the market. This means that we need about 800,000 new expats who are not labourers, housemaids, tailors, minimum wage bachelors or the Sharjah/Ajman commuters to fill this unit. In essence, a doubling of the professional high income salaried population of Dubai in the next two years. Realistic? Not at all."