Monday, February 23, 2009

Dubai Collapse….

www.treehugger.com

The property bubble in Dubai, the business hub of the United Arab Emirates, is bursting as investors start to dump assets, a report says.
The current financial crisis which has resulted in scarce credit and slumping oil prices has forced international financiers to dump assets in Dubai city, Bloomberg reported.
"Dubai is more precarious than it has ever been,” said Christopher Davidson, a professor of Middle Eastern affairs at Durham University.
"If the property industry collapses in Dubai, it will be finished. Dubai's relative autonomy will come to an abrupt end," added Davidson, the author of "Dubai: The Vulnerability of Success.
He added that Dubai's push into luxury property developments was a mere diversification on "paper sand".
Dubai is home to the world's tallest building -- the under-construction Burj Dubai --, most expensive hotel suite, and largest manmade islands.
Analysts at EFG-Hermes Holding SAE believe real-estate prices may drop 20 percent or more in the desert emirate. The sheikhdom may then have to depend on oil-rich neighbor Abu Dhabi for servicing its debt.
According to Moody's Investors Service, Dubai has borrowed $80 billion to fund its goal of becoming the UAE's business hub.

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