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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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 Posted: Tue Feb 10, 2009 7:25 am Post subject: |
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| pluto wrote: |
| ... the Fed, and other central banks, may have an inverse and adverse effect on real estate, indeed, perhaps, the whole FIRE economy. |
Understatement at its best. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Thu Feb 12, 2009 1:04 pm Post subject: |
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http://www.nytimes.com/2009/02/12/world/middleeast/12dubai.html
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Laid-Off Foreigners Flee as Dubai Spirals Down
By ROBERT F. WORTH
DUBAI, United Arab Emirates � Sofia, a 34-year-old Frenchwoman, moved here a year ago to take a job in advertising, so confident about Dubai�s fast-growing economy that she bought an apartment for almost $300,000 with a 15-year mortgage.
Now, like many of the foreign workers who make up 90 percent of the population here, she has been laid off and faces the prospect of being forced to leave this Persian Gulf city � or worse.
�I�m really scared of what could happen, because I bought property here,� said Sofia, who asked that her last name be withheld because she is still hunting for a new job. �If I can�t pay it off, I was told I could end up in debtors� prison.�
With Dubai�s economy in free fall, newspapers have reported that more than 3,000 cars sit abandoned in the parking lot at the Dubai Airport, left by fleeing, debt-ridden foreigners (who could in fact be imprisoned if they failed to pay their bills). Some are said to have maxed-out credit cards inside and notes of apology taped to the windshield.
The government says the real number is much lower. But the stories contain at least a grain of truth: jobless people here lose their work visas and then must leave the country within a month. That in turn reduces spending, creates housing vacancies and lowers real estate prices, in a downward spiral that has left parts of Dubai � once hailed as the economic superpower of the Middle East � looking like a ghost town.
No one knows how bad things have become, though it is clear that tens of thousands have left, real estate prices have crashed and scores of Dubai�s major construction projects have been suspended or canceled. But with the government unwilling to provide data, rumors are bound to flourish, damaging confidence and further undermining the economy.
Instead of moving toward greater transparency, the emirates seem to be moving in the other direction. A new draft media law would make it a crime to damage the country�s reputation or economy, punishable by fines of up to 1 million dirhams (about $272,000). Some say it is already having a chilling effect on reporting about the crisis.
Last month, local newspapers reported that Dubai was canceling 1,500 work visas every day, citing unnamed government officials. Asked about the number, Humaid bin Dimas, a spokesman for Dubai�s Labor Ministry, said he would not confirm or deny it and refused to comment further. Some say the true figure is much higher.
�At the moment there is a readiness to believe the worst,� said Simon Williams, HSBC bank�s chief economist in Dubai. �And the limits on data make it difficult to counter the rumors.�
Some things are clear: real estate prices, which rose dramatically during Dubai�s six-year boom, have dropped 30 percent or more over the past two or three months in some parts of the city. Last week, Moody�s Investor�s Service announced that it might downgrade its ratings on six of Dubai�s most prominent state-owned companies, citing a deterioration in the economic outlook. So many used luxury cars are for sale , they are sometimes sold for 40 percent less than the asking price two months ago, car dealers say. Dubai�s roads, usually thick with traffic at this time of year, are now mostly clear.
Some analysts say the crisis is likely to have long-lasting effects on the seven-member emirates federation, where Dubai has long played rebellious younger brother to oil-rich and more conservative Abu Dhabi. Dubai officials, swallowing their pride, have made clear that they would be open to a bailout, but so far Abu Dhabi has offered assistance only to its own banks.
�Why is Abu Dhabi allowing its neighbor to have its international reputation trashed, when it could bail out Dubai�s banks and restore confidence?� said Christopher M. Davidson, who predicted the current crisis in �Dubai: The Vulnerability of Success,� a book published last year. �Perhaps the plan is to centralize the U.A.E.� under Abu Dhabi�s control, he mused, in a move that would sharply curtail Dubai�s independence and perhaps change its signature freewheeling style.
For many foreigners, Dubai had seemed at first to be a refuge, relatively insulated from the panic that began hitting the rest of the world last autumn. The Persian Gulf is cushioned by vast oil and gas wealth, and some who lost jobs in New York and London began applying here.
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Stick a fork in the Dubai story. Real estate and tourism do not equal a "diversified economy". |
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mises
Joined: 05 Nov 2007
Location: retired
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mises
Joined: 05 Nov 2007
Location: retired
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Sun Nov 29, 2009 8:42 am Post subject: |
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The gigantic "integrated resorts" in Singapore are nearing completion. The official story is that these will form a new backbone of the Singaporean economy, which has been all property bubble + finance for a while now. A couple gigantic hotels and casinos is all a city-state needs. The PAP must be a tad worried given the disaster in Dubai.
Some pics of the IR, which I'm sure will be a complete disaster:
http://www.singaporedice.com/forum/showthread.php?p=10017&posted=1#post10017 |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Thu Dec 03, 2009 11:07 am Post subject: |
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http://www.businessinsider.com/insider-traders-got-ahead-of-the-dubai-debacle-2009-12
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The evidence of foul play ahead of Dubai's debt announcement last week appears overwhelming.
A whopping 75% of debt owners might have sold ahead of time.
Which means that whoever was left holding Nakheel bonds was truly out of the loop.
WSJ: According to Data Explorers, a company that tracks how much of a company's stock or bonds are out on loan, about 75% of institutions holding the sukuk sold their position between the end of August and the end of November.
"It's an extraordinary sell-off in a bond so close to maturity, when there was no indication of a problem refinancing. The data suggests they had some information that it was a good time to sell," said Data Explorers managing director Julian Pittam. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Fri Oct 15, 2010 10:28 am Post subject: |
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Who wants to live a mile above ground?
http://blog.foreignpolicy.com/posts/2010/10/14/worlds_tallest_building_still_90_percent_unoccupied
http://www.bloomberg.com/news/2010-10-14/dubai-s-burj-khalifa-tower-has-apartment-rents-slashed-to-attract-tenants.html
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Rents for luxury apartments in Dubai�s Burj Khalifa, the world�s tallest tower, have been slashed by as much as 40 percent after the owners failed to find tenants, according to a broker that�s marketing the homes.
The cost of renting a studio with floor-to-ceiling windows, marble and wooden floors has dropped to 6,666 dirhams ($1,815) a month, while a one-bedroom apartment is available for 10,000 dirhams, Better Homes said. Two-bedroom homes are going for 15,833 dirhams.
Nine months after Burj Khalifa was inaugurated with a water-and-firework display, about 825 of the tower�s 900 apartments remain unoccupied, said Laura Adams, a residential sales and leasing adviser at Dubai-based Better Homes. The building is within walking distance of The Address, which offers serviced apartments at similar rates. |
Any takers? 2k/month for a studio.. You gotta live in Dubai but that's a small detail. |
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caniff
Joined: 03 Feb 2004
Location: All over the map
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| Posted: Fri Oct 15, 2010 10:37 am Post subject: |
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Does the Burj fit the description of a "white elephant"? I dunno, but looks like alot of investors will be losing their shirts on that one.
Time to drive to the airport before you get thrown in debtor's prison! |
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young_clinton
Joined: 09 Sep 2009
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| Posted: Sun Oct 17, 2010 1:16 am Post subject: |
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| VanIslander wrote: |
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| Even in mega-sprawl Phoenix, cranes are in high demand commanding rents of $25,000 to $65,000 per day... |
That's chickenfeed. Here in Korea on Geoje Island, the world's biggest shipbuilding municipality thanks to two of the top-20 shipyards, Daewoo Shipbuilding in Okpo on Geoje borrowed a large crane from Samsung Shipbuilding across the island in Gohyeon for a sum in excess of a million dollars a day u.s.!!! and they borrowed it for two months.  Billions of dollars every year in shipbuilding on Geoje, that's why a megasized bridge from Busan is being built right now that'll take 45 minutes to drive!
And, oh, in terms of seeing cranes used in building construction, I've counted over a hundred in just one vista while on the bus entering Seoul from the south. I've never seen so many cranes. Entire apartment suburb cities are being built. It looks very futuristic/grandieur in its scale.
This country's economy is in trouble if it relies on domestic apartment and highway construction as well as a (now thriving but threatened by emerging cheaper Chinese) shipbuilding industry not on solid foundation. The economy's flagship car and electronics makers (along with exported engineering services) are about the only firm foundation around. |
I wish I would have had the money to buy a crane before the boom |
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