Wednesday, June 18, 2008
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).
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?