Wednesday, June 25, 2008

"If you build it, they will come"... but don't let them in!

The real estate battleship in Dubai apparently has three visionary captains: Real Estate companies, Landlords and investors who seem to have a separate magical vision about Dubai's future, and Woody Woodpecker (a.k.a. Real Estate Regulatory Authority). The third party just decided to smack the first party's deal to give the second party visas.

Apparently Woody is laughing his head off as he pecks his holes in the growing Dubai real estate tree, as he cannot see the basic logic that if you invest in a country based on advertised promises of residence, attracted by invitation of "trust", and then pull that rug from underneath them, causing the trust to disappear AND the physical reduction of tenants and residents in Dubai, it will have a negative effect on both real estate markets and economy, let alone border on outright fraud as most people had it in their contracts and the companies had written government confirmations. So he decided to punch a hole in it the only way he can, making a declaration without authority. Strange, considering that for the most part, a residence visa would be the call of the immigration department, something that RERA has no business with.

But then again, that never stops Woody from sticking his nose in things, does it?

Hahaha HAAA ha, hahahahahahahahahaha........

Wednesday, June 18, 2008

Give us a break

Another uneducated guesswork government ruling by UAE authorities leaving no time at all for us to breathe since the last few (one week from gardeners ban, two weeks from obscure Visa rules, and three weeks from company with multiple licenses requiring multiple offices ruling at Dept of Economical Development)

Not that banning 20 year old cars is a huge problem for anyone, but what on earth is banning transfer and sale of vehicles that are older than 10 supposed to be about? Would I be from January then either stuck with my 1999 Discovery or off with it to the junk yard?

That's going to be some new business for car-dealers: "I'll give you 5000 dirhams for your model 2000 Mercedes SL500 because whomever buys it is stuck with it." Reminds me of my 6th grade English Lit story "The Bottle Imp" where everyone is trying to unload the damned thing before their time comes so as not burn in hell.

Have this been done before? I searched around and found no such rule anywhere in the World.

Would UAE authorities at least consider letting us residents get our heads around what's going on here before giving us new rules to mesmerize about?

A break is what we need!

Rental Analysis

Sorry everyone for not writing in awhile. I realize this is a new blog and a lot more posts are needed to gain your attention and respect before it becomes acceptable for me to succumb to long sabbaticals and disappearance acts. The reason though it took a while was that I really wanted to focus on and publish a small research that I've been working on.

You see, I am in financial markets and investment. That means money, numbers, and economics. So I wanted to do a little digging that involves my better honed, albeit geeky, skills to see exactly how far the financial figures are cooked here in the UAE, and how bad things have become recently (11.1% inflation my @$$!!)

Anyway, below is a tabulated chart of my findings (I could not, for the life of me, manage to get a proper table in here, so I resorted to the old "print screen" and save as a GIF file trick):

- The salary data are median salaries collected indirectly through several agencies, and represent a sample of at least 10 people out of each country for each job listed (So at least 30 people of each country were tabulated).

- The rents data were collected directly from various sources, mostly classified listings and real estate agencies. This one is what took most of the time. Data were also collected for Singapore, Zurich, Sydney and Chicago, but were not included as it was not complete (Mostly salary figures were hard to collate and match).

click on the figure for a clearer read

So what are some of the conclusion of this small research:

1- That despite having the lowest income across the board, Dubai has the highest minimum rent out of all those major cities of the World, especially in studios. What this means is that even though all major cities have quite expensive penthouses and Villas, they all present OPTIONS of lower rent for those without great means to live in those cities, supplying their economy with a vibrant middle class, which strengthens the consumption spectrum and creates a solid small and medium enterprise base. It means that even in the most expensive city in the World like Tokyo, you DO have the option of landing a $500 a month studio. A 10% lower limit of $950 per month did not exist in ANY city checked, this is the HIGHEST in the World, a serious issue that has to be handled if Dubai expects to grow its community and economy and attract more businesses to fill those rising office and residential towers.

2- Dubai was the only city out of all checked (with the exception of Jeddah and other Saudi cities though still not even close to being as widespread as in here), that had the abominable quarterly to annual rent payment system. Right now more than 60% of offered properties demand single payment for the whole year. In addition to being the only city that now bans sharing and regulates carpooling with heavy fines, this must be one of the biggest cash-flow challenges facing individuals here and a needless hurdle to prosperity.

This is actually where the numbers cannot match: The best (legal) option a person can find for accommodation is around $4000 (1000 for security deposit and 3000 for three months on a cheap $12,000 a year studio), yet the average monthly income for an average 5 year experienced office manager or accountant is $2,500 (MANY take less, some a LOT less). This way, it will take two months for a new recruit to pay the rent while eating one meal a day and sleeping on the cold hard floor as they can't afford buying or even renting furniture at this point, and the third month will have to be all saved to pay the next quarter's cheque of $3000!!

How exactly is it that the dishdashas-that-be (that term is on loan from Secret Dubai, due credit) expect this economy or society to function, when university educated experienced professionals cannot huddle in a room on their own accord? Where are the billion dollar businesses going to hire its workforce from, and who are the hoards of small - increasingly useless "last-season-me-too" - shops in the hundred malls going to cater to? Sharjah is not an option thanks to the still high rents there and increased requirement of a well-maintained car, a healthy Salik account, and three boxes a day of high blood pressure and nervous trauma medicine to survive the daily commute. Sharing is not allowed anymore so that's out. A fat nest-egg to be used while setting up is kind of contradictory to the whole concept that most of them come here to CREATE a nest-egg.

Only way is banks.... hmmmm, interesting.... but errrrr..... hmmmm.... funny how that worked out........ You think?

Monday, June 9, 2008

Fine and finer

I know it didn't happen exactly in Dubai, but still UAE:

The National, June 8, 2008: "An Egyptian house wife was fined in a fujairah court Dhs. 4000 yesterday, for beating her two filipina maids so bad they escaped from her home and were treated in the hospital for bruises, wounds and BROKEN BONES"

Let's see: 10,000 dirhams fine if a gardner washes a client's car in an Emaar development, 5000 dirhams fine if you give a lift to a colleague and the RTA agent thinks you might charge for the ride, or 4000 dirhams to beat the living daylights out of two helpless women till you break their bones.

Hmmmmm....... choices, choices...

Got it! I'll take the 4000 dirhams option: By beating the living daylights out of the RTA agent and the Emaar security agent who are watching for carpoolers and gardners, and then off to Fujeirah!!!

Sunday, June 8, 2008

Dubai, the Rise and...

30 years ago I landed in this place and I literally grew with it. Everyone who spent as much time here as I have would tell you that Dubai was growing a bit better off in certain areas and getting slightly worse off in others year by year.

Nothing strikes as more astounding though as the change of the last 4 years. With the hyper buildings, rapid change of leadership and policies, Dubai marched on with areas a lot better off and in some people's opinions got a lot worse off in others.

The last 6 months cannot be called anything but "confusion".

Rules and regulations in this unregulated supposedly free haven sprang weekly if not daily, all disconnected and unorganized that chaos was certainly the name of the game. Standards of living took a nose-dive in restaurants, government service agencies, banks, hotels, taxis, the works. Everything was worse delivered and much more expensive, and crowded. Very few could focus on the better off now, as most are shell shocked by the sheer velocity of changes, most of which are widely perceived as negative. The dubai lifestyle for one thing was beaten to a pulp. Crowd rules are in play.

Those of you who lived here a mere 10 years ago will actually have so much to talk about regarding "the good old days". My favourite was cruising down the beach road and wondering why would they charge 5000 dirhams a year for a beach club membership when the best beaches are all over and free? When a dubai police car stopped you, you were either messing about and possibly drunk, or they just wanted to chat about your car's performance figures and maybe give you a couple of tips about a good garage.

Remember when the watchman, otherwise called "Natoor", was actually a residential building's version of an office lad? Guard the place, wash the car, clean up the whole building daily, mind the swimming pool and gym facilities, and maybe pick up some light shopping from the grocery next door that has a tab open with your name and apartment number, one that you'ld settle without hassle nor delay at the beginning of each month.

Such things always made it possible to have plenty of time for the beach (as long as we were away from the 5 months of hell). Sometimes it would be a month and the beach gear wouldn't even leave the car for a cleanup. You never fought for a place, as a matter of fact you sought company, and in Dubai company was good, sharing drinks, barbe, and stories.

Most of all, everybody was working around 5 comfortable days a week, and were making good money.

So what exactly got into the dishdasha's thick heads in power, that things needed to change?!