Wednesday, July 30, 2008

Call for Care

Honestly, every country and city around the World has a dark side. Every place has a sad story, and every story has an ending. This is not about criticising or trying to find a solution for another one of the plethora of problems rising in our community in Dubai. This indeed can happen anywhere, but since it happened here then it's our concern. This is about a man, a man whose picture struck me as that of my father, a retired Austrian man who gave this city and country so much over more than 40 years, and with a small twist of fate and a not-so-rare financial difficulty faced an 18 month stint in jail and is now in endless limbo.

This is an age of reflection and pride not stress and humiliation. Can you help spread the word? Can you help directly to pay his debt? I don't know how but my guess would be to contact 7 days. The amount is silly compared to the millions dumped on real estate ornaments and special license plate and mobile phone numbers, and there's hardly a better deed than settling a person's incarcerating debt. If the man is given a dirham for every thousand people who marveled at those Dubai icons, he would be flying home a millionaire by now.

Please read the story if you haven't, and think of something to help with.

Dubai Warrior

Saturday, July 12, 2008

Three things that cost 50 dirhams, when it shouldn't!

When I saw them I was simply speechless, and I decided to create the three-most-inflated products today. These three things cost around 50 dirhams, a seemingly worthless bill these days, but still they shouldn't. They didn't just a short while ago, and they still don't outside of Dubai. Presenting in reverse order:

3- Glycerin soap: A herbal glycerin soap bar was a basic home item for decades everywhere around the World. Village women could make a ton from some rendered fat and a decent garden pick. Costs about a couple of dirhams for unscented basic ones on the market streets of just about anywhere, but can go into MAYBE 5 or 6 dirhams for a decent herbal one in a nice market. Why would this Jordanian soap bar salesperson standing beside his stall in a mall, selling the exact same 5 dirham bar that we were picking from grocery shops for the occasional dry-skin-moisturizing moods of a sister, in a smaller size and a badly made wool purse (supposedly organic natural feeling inducing), for the clean-cut asking price of a flat 50 dirham bill? US$15 for a bar of soap, with ingredients list as flat, known and commonly devoid of any special herbs (Two basic olive and palm oils, with glycerin and basil, that's it!) things are getting a bit silly.

2- Miso soup in Festival City: Please don't comment by saying there is a 100,000 dirham dessert dish in a Malaysian business hotel, or a US$1000 burger in a New York hot spot. Those are signature dishes by world-reknowned artists making a gimmicky dish using jewellery and gold. The Miso soup in question is a basic item made of soy and a dash of spring onions and... well water. It costs an embarrassingly low 2.50 dirhams in any outlet in Asia, equivelent of 7 dirhams in Singapore higher end deli (with a wierd pudding that i didn't like), 6 dirhams in a New York Sushi bar, and around 10 dirhams in a hardened high-rent high-scale Tokyo restaurant. I need to add that it's considered a value added item in most places anyway, like french fries at Burger King. It was a separate item however on a normally inflated menu of a food court outlet here, weighing in at 35 dirhams for an eight ounce (single cup, half-pint or around 235ml) bowl. 5 quids for soybean and water is a bit rich, don't you think?

1- The winner of the list is..... Wait for it....... apricots at Carrefour!: Apricots are a basic nutritious fruit that many people like fresh and many like dried. Egyptians in specific have a taste to drinking a Ramadan mocktail of apricot concentrate with almonds in it. Even though apricots are seasonal and are hard to find outside of its limited summer release, it usually sells for the equivalent of 3 to 5 dirhams per kilo anywhere. A fair price for a regionally produced fruit, right? Carrefour however is proudly selling it at a 5 star hotel cake price of 52 dirhams per happy kilo. In case you're thinking that Salmon fillet and tiger shrimps are as much, you're close, those are around 59 per kilo, up or down slightly depending on the outlet.

There you go, ladies and gentlemen. I remember the days when my son would enjoy 50 dirhams throughout the whole fortnight as allowance and it would more than suffice. This is 10% of a labourer's monthly salary here, do they expect that those guys will continue working at a salary that they can't use to walk into a common cheap hypermarket like carrefour and buy 10 kgs of fruit for the whole month?

Friday, July 11, 2008

Back from the Orient

After a brief recent visit to Singapore, I realized that it's what Dubai should have been, especially considering how much Dubai copied from there. You can understand certain shortcomings, especially that innovators are always ahead of imitators. But the one thing that still does not add up about Dubai, is real estate.

There you had Asia's international hub of business, finance, and trade, wrapped up in a city-state governed by fully enforced republican law, enjoying excellent transportation facilities and civil infrastructure, great tropical weather, and a municipal management unmatched all over the continent. Literally billions of Asians are competing to get a spot or an office in this limited island, and yet they have a healthy real estate market where 60% of the units costs LESS than Dubai's cheapest offerings. The other 40% that cost more (granted some are significantly more) than Dubai's more expensive units, had a lot more to offer for that kind of money that it actually still made sense.

Yes I found many real estate units there that surpassed 4000 dirhams per square foot, but the quality on offer was superb, the facilities included were comprehensive and more than luxurious, and the location slash exclusivity were supreme. Exclusivity there meant a street corner of the top commercial and shopping district, in short, only ONE BUILDING would have that advantage, and therefore would advertise that it's exclusive in that way or location. Dubai's every other tower claims exclusivity, which is an oxymoron now honestly - 100 towers in the middle of nowhere looking at each other's swimming pools and all are branded as exclusive thanks to having central air conditioning or a silly voice activated lift.

Condos there were found thriving being offered for S$700 per sq ft, that is close to 1800 dirhams, and that is with full facilities of parking and entertainment, access to mass transit stations and convenience stores, security and all the usual bells and whistles, but more importantly were ALREADY BUILT!

Still, people here are either still oblivious to the market woos and claiming huge growth and "investment opportunities" still existing, or are now turning sour and unhappy and starting to find places to lay blame like those shopkeepers on the JBR strip Apparently they don't seem to understand or comprehend as to why is it that JBR is a ghost town or why is it that people wouldn't be walking in an OUTDOOR shopping street in JULY, or why wouldn't there be high traffic in a compound they DON'T LIVE AT.

Unless the Dubai developers and current "investors" come to grips with reality, and realize that 3 bedroom apartment rents of over a quarter of a million dirhams per year and prices above 3500 dirhams per square foot that they are dreaming of are probably not going to materialize, JBR will continue to be a ghost town and this market will face a long period of silence, followed by panic sales forced by bank payment pressures and a complete bubble burst.

Kuala Lumpur was even a bigger reality attenuator for me, as beautiful condos were being offered at as little as 250 dirhams per sq ft, and that is including swimming pool, security, car parking and a good view!

With those countries offering foreign owned business licenses and residence visas under even a better system than the dodgy 51% sponsorship system found in the GCC, the whole Dubai offering now makes no sense at all, and this is extremely dangerous for the economy and the total population with both its expat and local sides. Dubai used to be like this great well made Mercedes being offered as a limo at a great price, but over time it started rusting and getting old and all they did was add chrome to it, and in the end began charging enormous money for the ride, claiming that it's a classic. People now are saying "It's not, it's just an old beat up badly maintained and badly renovated taxi", but they're the only people who can't see it yet.

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!!!