Global Politics

Financial crisis finally hits Dubai

Like hundreds of thousands of Europeans, Persians and Americans, this 29 year old Frenchman came to Dubai a few years ago to make money in the UAE's red hot real estate market. he says it used to be easy to sell properties to people. Now he says sales are down 40% and the global financial crisis has put a scare into banks. With no credit, no one is buying. The largest developer in the Middle East was active here but has recently declared it lost 60% of its value on the stock market in the UAE. This analyst says the market has been hit hard. He just conducted a survey of Dubai real estate agents and found that half haven't sold a property in the past month. This Lithuanian real estate agent is a prime example of such an agent. Economists have long said Dubai's property market was overheated and was bound to slow down, but not this dramatically. There's some demand still for housing and rents haven't gone down. Some think this will just make speculators leave, and some expect a relatively quick turnaround. Some economists fear a cycle where the property market remains frozen which would lead to layoffs in construction and then a market with no housing. Although the UAE's oil reserves mean the country will survive, dropping oil prices haven't helped either.

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