It is now 2+ years Lehman Brothers collapsed taking the world financial system with them. The aftermath of 15/9/2008 collapse of LH left the world banking majors looking for government support to cover up their bottom lines and bonuses. The easy money flow stopped and leveraging tumbled to acceptable limits (if any were left anymore).
Dubai which was thriving on real estate boom for buyers from Asian Subcontinent and UK particularly saw the funds disappear suddenly. This caused best of projects to come to grinding halt, tower cranes disappeared as if they were non-existent otherwise too. Dubai has resilience and measures to complete projects almost at last levels did start moving after few first quarters of desperate thinking. Rentals which were being raised in mad race by landlords came to another shock and reversal in two years has cost them to be back to 2006 levels in general.
Real estate developments are either not happening or moving at snails pace. The reasons are primarily – non availability of buyers and much hyped and inflated rates. Today the rates are at 40% of peak rates of 2008 and still expected to smoother. Where does it stop now? Localities which were handed over do have their own issues of occupancy.
Probably some more time and things would come to level which are sustainable here. Dubai has to invest where it can help society develop, economy can grow organically years on. … . it has to be investment in industrial sectors. Dubai can live a story of all time favorite manufacturer and supplier of goods to MENA region. Dubai needs to leverage on its logistics infrastructure more than only re-exporting goods. Dubai needs to build sustainable model for businesses to keep going at reasonable costs. Dubai needs to free itself of economy which has no sound base as of now, trading and tourism won’t take it far…but health, manufacturing and education services sector can!