No more idleness in the desert
This might end up being a long post and I won't be editing it so excuse me if I ramble.
In the last two years, we have seen costs literally shoot through the roof. In 2005 we saw our rent soar, but we hoped this would be an isolated incident. In our minds we thought surely no landlord would hike the rent again on the back of a 35% rise? How f***king wrong we were!
My opinion is that things are not adding up at all, and something has GOT to give. According to an article that came out recently, Dubai ranks amongst the top 25 most expensive cities in the world to live in. Interesting that only last year it was placed at 75th. The fact that it climbed 50 places in a year is just staggering.
A few months ago, Gulf News published an article proudly proclaiming the economy grew by 25% over the previous year. What they didn't tell you was that if you subtracted inflation from this figure, the growth was only around 8%. So yep, inflation was in the double digits. To put this in perspective, most developed countries don't want inflation to be anymore than around 3% a year.
In the first half of the year, the stock market in Dubai lost $76billion dollars. Billion. http://www.menafn.com/qn_news_story_s.asp?StoryId=1093118672. That's 35% of its value. But people are still smiling, as if its perfectly normal. In any normal country, a loss of 10% is considered a pretty bad crash, but don't you dare use the c-word here. No no, it's just a 'correction' according to the powers that be. Are we really living in a bubble so big we can't see the obvious?
Last October, a friend of mine tried to get me to invest in the stockmarket. Thank God I didn't. I did a bit of research, asked why people invested in stock X instead of stock Y, etc. Soon I realised 90% of the people I knew had no bloody clue what they were doing in the stockmarket! For them it was just a game of putting the money (or for some, their lifesavings) into it and watching the numbers rise. Stockbrokers were the worst. When shares in (insert name) company fell, their standard response was 'not to worry, it will go up again after New Years'. Why New Years, I'd ask. They'd just shrug, 'oh it just does'. They had no bloody clue either.
And now the property market. I really think it's bordering on being ridiculous now. I can't see how the value of a villa can rise by Dhs100,000 in just two months. To me, that really isn't sustainable. Don't get me started on rents either. I know people who were considering moving to Dubai but the number one thing that puts them off are the rents. What is worse is you have no clue what the rent will be like next year, so its impossible to know what your housing allowance/budget should be. And I think asking for Dhs200,000/year for a villa is insane. Even Sharjah is getting expensive, rent-wise and families there are moving further afield to Al Ain. A lot of people I know are fed up and are leaving, to me it seems more people are leaving this summer than before.
A year or two ago I would have laughed if someone said there was a bubble. Well, not laughed but I would have been a bit sceptical. But this time I am wondering. When you look around you, you realise all of this really isn't sustainable at all. Something has GOT to give, and when it does, I think it's going to be very nasty.
We'll be leaving Dubai very shortly, like many others we know. It's been fun in many ways, but I don't think I could put up with it for any longer.