Oh, happy days are here again in Dubai-land.
DubaiGlobal — it got renamed “global” after Dubai’s market went comatose following the economic crisis in 2008 — was held here last week. It’s sort of like speed-dating for the real estate set. Developers set up booths, many with huge and incredibly detailed models of future developments, and investors stroll around, stopping at projects that catch their fancy. In the boom years here, as many as 40,000 people a day in the first two days would apparently visit the show and many, many of them bought properties while there.
This year, it seems the glory of those days has returned. Organizers have said that attendance was up by 25 percent this year compared to 2011 and the media fanfare trumpeted this year’s over-the-top projects, the sorts of developments that made Dubai famous in the first place.
Namely, the Taj Mahal Arabia: Just like Agra … but six times bigger! Plus shops and a hotel, (of course!)
“The Taj is made as a monument of love and we hope to promote this in Dubai as a major wedding destination,” said developer Arun Mehra in an article in the U.K.’s Daily Mail newspaper.
The development is expected to cost $1 billion and is part of a “Wonders of the World” series in Dubailand, a theme-park extravaganza that supposedly will be the size of Disney World and Disney Land combined. Other “Wonders” include replicas of the Great Pyramid in Giza, the Hanging Gardens of Babylon, the Coliseum and the Great Wall of China.
Check out the developer’s promotional video:
Now let me just point out that precious little of any of that video is built right now. There are still major developments left unfinished from the boom years, including this one, their investors out of money and with nothing to show for their investment. Nakheel, the developer of the Palm Jumeirah, is changing contracts ad hoc and charging residents there new fees presumably because it needs the money. But nevermind to all that! What Dubai needs is its own version of Venice and its canals, and a development the size of the English city of Birmingham that includes London Bridge, Big Ben, St Paul’s Cathedral and the Houses of Parliament.
Dubailand is currently one big sandpit, the investor protections oft-discussed since the bust have yet to be proven in courts of law here, and one could debate whether the emirate needs more hotels and high-end luxury villas. Not that buyers care, it seems. Nevermind the disgruntlement on the Palm. For Nakheel’s latest development, unveiled just before Cityscape, word is that buyers gobbled up AED800 million ($271.8 million) worth of luxury apartments. Tales are already being shared of people selling their places in line to buy at new developments for AED80,000 ($21,780.) No doubt the flipping is happening fast and furious.
It seems the place has collective amnesia. Wasn’t this how Dubai got in trouble in the first place?
Look, I know that the Arab Spring has boosted Dubai’s fortunes; it continues to be a safe haven for both people and capital when turmoil strikes the region. The emirate’s economy overall is healing. But what about development that is not targeted to the speculator but instead to the end-user, the sort of investor that will stick around through the economic cycles and not disappear at the first whiff of a crash?
But my friend, V.P., thinks I’m being an idealist. “I think by now it’s no secret what Dubai is all about,” he says. “And this is Asia. The Asian mindset is different. It’s only money that counts. And it’s going to be like this for the next 30 or 40 years.
You can either be an idealist and try and fight it or you can enjoy the ride. No one’s going to listen to you when there is SO MUCH MONEY at stake.
I’m sure speculation and a gold-rush mentality have played a role in the development of most major cities. But is there any place where this philosophy represented the sum-total of development?
Ali Rashid Lootah, the chairman of Nakheel, the developer of the Palm mentioned above, doesn’t believe Dubai’s speculative real estate market was ever a problem. “It was a global crisis,” he said in an interview with the BBC. “It was not Dubai.”