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Dubai Debt Crisis – All is not well as yet
By: William King |
| word count: 401 comments(0) views: 93 |
| This article talks about Dubai debt crisis and focuses on how it’s holding back Dubai real estate sector growth. |
Trouble never comes alone, especially in Dubai’s case, where troubles are arriving in groups and refusing to leave anytime soon. Every good piece of news is overshadowed by a couple of bad ones coming out of Dubai property market. Just when investors were rejoicing over the Abu Dhabi bailout, reports have emerged that the total Dubai’s debt has reached a staggering $170 billion, which is more than double of what was previously believed ($80 dollars). Not to mention the reports regarding Abu Dhabi’s bailout, which clarifies that Dubai will actually receive just $5 billion instead of $10 billion. (Chances are that they’ll be thinking of renaming “Burj Khalifa” back to “Burj Dubai” now).
Generally, it’s not easy to get out of debt once you’re in, both at individual and at national level. Going by the appearances, it will take quite some time for Dubai to come out of their huge debt, no matter how swift the recovery is. It banks mainly on its real estate sector as the Oil and Gas reserves in Dubai are not sufficient enough. However, looking at the situation of global financial markets and the overall conditions it’s not likely that Dubai can regain investor’s trust anytime soon. Dubai’s last hope, its oil rich neighbor Abu Dhabi does not seem too keen to extend helping hand. As a result, investors are getting flustered, trying their best to fish out their money and leave.
There’s nothing stopping the price decline either, some experts had claimed price recovery in 2009. By the looks of it, we’ll not be witnessing any, even in 2010. Looking at the lingering speed of construction, it is undecided as to how long will it take before these huge projects are completed. Those who had invested in these off plan properties will not be too happy about these long delays, in fact a big number of these investors are already asking regulatory authorities and Dubai property court to help them in getting their money back from developers.
Future of tourism industry doesn’t look as bleak though, in fact Dubai cruise industry has seen some healthy growth in the recent past. The opening of the new terminal in Port Rashid and Royal Carribbean’s cruise ship, called Brilliance of the Seas, will definitely provide the much needed boost to Dubai tourism sector. The cruise ship alone will attract more than 30,000 passengers to the region in the coming days. |
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