James Rossiter, Property Correspondent
We've made some changes
to The Sunday Times
Last Friday the 155th floor was completed on Burj Dubai. By yesterday the 156th floor was finished on a building that, at 585.7m (1,922ft) and still growing, is already the world’s tallest tower block.
By the time that Emaar, the largest property company in Dubai, completes the Burj (the Tower), it will rise to 164 floors, to be capped by a spire that will add a few more precious metres. The developers are said to be able to add on more floors if they wish at a later date to ensure that the Burj can see off any competition that might threaten its status as the world’s tallest building.
Such figures set pulses racing in Dubai, a city that resembles a cross between Vancouver and Manhattan, with a smack of the garish self-confidence that hitherto only Las Vegas could muster. Local master planners privately refer to developers’ love of skyscrapers as “architorture”.
It is not only the property developers who are in thrall to what locals regard as an obsession with everything ending in “est”: biggest, tallest, best. The emirate’s rapidly growing population – 30,000 people arrive each month – has bought into a vision of world domination handed down from Sheikh Mohammed bin Rashid al-Maktoum to the people he governs as absolute ruler.
People in Dubai who can spare a few thousand dirhams are playing the property game. If they are not working directly in real estate – and that includes a considerable proportion of the population – most are in property investment speculation, buying half a dozen flats at a time off-plan and holding them until completion or “flipping” them – selling the rights to the homes for a profit within a year.
Prices of Dubai apartments have soared 125 per cent over the past year around the Burj, catalysed by new laws that came into force only at the start of this year allowing, for the first time, foreign ownership of residential property. House-price inflation in other parts of the city has risen by between 20 per cent and 100 per cent over the past year, mirroring similar rates of annual inflation every year since the turn of the millennium.
Dozens of high-rise luxury apartment blocks litter Dubai, all about 97 per cent let. Scores of similar projects are under way, dominated by the big players, such as Emaar, the largest quoted developer, Nakheel and Dubai Properties, which are controlled by the State, and Damac Holding, one of the emirate’s largest privately run residential property developers and owned by Hussain Sajwani. Damac has 79 housing blocks under development and the company will have handed more than 10 per cent of its presold properties by the end of the year.
By the time that Damac lays the first brick on a tower block, it will have presold about 80 per cent of the units with cash in the bank – buyers pay by instalment – covering about 40 per cent of the built value of the entire site. That means that Damac has broken even on its tower blocks before it has started construction.
“In just under five years we have moved 11,000 units to 116 nationalities,” Peter Riddich, the chief executive of Damac, said. British citizens account for about 30 per cent of Damac’s buyers, followed by nearly as many Iranian purchasers, with the balance dominated by a mix from India, Pakistan, other Gulf states, Russia and other republics of the former Soviet Union.
Sheikh Mohammed, the ruler of Dubai and Vice-President and Prime Minister of the United Arab Emirates, has a vision to transform Dubai into a huge financial trading centre. The idea is to attract massive amounts of foreign workers and capital to an emirate that did not have the natural resources of Abu Dhabi, its larger, oil-rich neighbour. One of the key methods of his strategy has been to turn Dubai from a sleepy town into a huge building zone, which is starting to rival Abu Dhabi, the capital of the UAE, in population.
Blair Hagkull, managing director of Jones Lang LaSalle, the property agency, who is based in Dubai said: “We are halfway through a 30-year cycle and, at the end of it, Dubai will be where other cities took 100 years.”
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"Best run Indian city in the world" as it's been called.
I think it's about time the UAE pay their Indian and other Asian expat workers a living wage in the Emirates. These workers have families too, and they ought to be able to unionize. Human rights abuses are more prevalent than most people realize.
Ghandi, Madras,
Jealousy, jealousy, jealousy.
Its fine, isn't it, when the tallest buildings in the world are in YOUR country, when the 'one-upmanship' and real estate 'flipping' garners millions of dollars for the rich people in YOUR country, and YOUR country has all the money in the world to do whatever they please.
But now, you've spent ONE TRILLION dollars on an illegal war -and YOUR nation can't afford to play anymore!
It will be another TRILLION dollars before you can extract yourselves from Iraq. Your country is spending 12 BILLION dollars a month to suppress the poor Iraqi people who DID NOT HAVE ANYTHING TO DO with 9/11.
When you've spent your 2nd TRILLION, your nation will be bankrupt.
Poetic justice, I'd say.
Oh, and jmiller,denver,colorado - check out Masdar City, United Arab Emirates, the Greenest City on the planet - a worthy initiative recommended by every environmental group in the world, including The Sierra Club, Greenpeace, et al.
Jealousy, thy name is U.S.A.!
John Shannon, White Rock, BC Canada
In your report on Dubai you refer to "Architorture" and that "high rise luxury apartments litter Dubai." Litter is also known as trash.
You are imposing your architectural values on your readers. Every nation has its sovereign right to its own architecture. You should not use your media to denigrate another nations choice of architecture. Perhaps your nations architecture may not meet foreign approval ?
Architecture bashing should not be part of a news report.
H, Toronto, Canada
Negative comments..I have never come across a more selfish forum than this even from people do not know anything or anywhere other than their backyards.
To VINCE fOSTER, your comments truly donot deserve a reply because u have not passed your grade school from all indications. The 'Mohammedan' culture that u like to refer to 'Islamic culture happened to have invented Algebra and many other scientific achievements that you know nothing about, and which forms the backbone of modern science..I think you should ask some saner people.
Surprised One, Lagos, Nigeria
Its easy to build, awash with petro dollars, land has been given away for free to quasi government entities. Its easy to make profits when you charge London prices and you have labourers toiling in servitude for less than US$ 500 a month. Its a flippers paradise. No social justice, no democracy and surrounded by geo risk the next 20 years....its takes a brave, greedy capitalist in Dubai.
Terry jones , Dubai, UAE
I think you will find that a significant percentage of that 30% from the UK investors would be primarily wealthy (upper/) middle class British Asians who have known for years that this market was much better value and return for money than investing in the UK. Dubai is perfectly located for trade between Europe and South Asia. However, it is still not going to be as impressive as any future port-city developments that are built between India and China. As that is where the real money and volumes will lie.
Kamal Sandhar, London, UK
What will happen to Dubai property prices when the Iran war begins?
Kara Swart, London, UK
Dubai's expansion is impressive but there are a few factors which give concern.
The market cost is supported by the recent huge increase in rents 100%++ - it is the only way the costs to purchase can be supported on paper, even then its weak.
Inadequate infrastructureThey are running finished developments from generators because they have insufficient power to supply them. Water is desalinated and again demand seems to be outstripping ability to supply. Projects are commonly 1+ years late.
They are concentrating on the high end of the market leaving the middle and lower class struggling to cover the rent.
People buying off plan without a mortgage in place assuming they can flip it at a profit however developers are now building who cannot offer mortgages..
The advantages are being watered down; quality of life is reduced by huge traffic problems and relentless construction.
Labour laws are draconian - 6 month ban for changing jobs with a mortgage to pay?!
Ginge, Stockport, UK
Like most boom / bust cycles, the completion of this tower will closely coincide with the end of this global property boom, as did the Empire State Building in the 1930's and other boom times (1880's/1980's) where the biggest and the best were proposed/built at the peak. History has a knack or repeating itself in different guises.
geoff, Melbourne, Australia
The new building in Dubai comes not from an already crowded urban infrastructure as in Chicago or New York but from the hubris and really childish game of one-upmanship presently conducted by that nation's male leadership.
It's just funny, ok? How these wealthy jokers in the Persian Gulf feel the need to go higher than anywhere else in the world is simply funny and sad. If they were smart as opposed to stupid, they'd build 21st Century cities with state of the art energy conservation and long term planning in mind. Then, they would really be heralded by the rest of the world; instead, Dubai is just seen as Las Vegas in the Persian Gulf. Not exactly something to which to aspire.
jmiller, Denver, Colorado
Once again, the defective Mohammaden "culture" relies almost 100% on the inventiveness, ambition, talent and resources of the West to accomplish something.
I give it 10 years, max.
Vince Foster, Washington, DC
The tower has a beautiful strong vertical architectural statement that is very reminisent of the murdered World Trade Center towers.
The new skyscraper should be a highly visible inspiration across the Arabian gulf to the peace-loving Iranians.
Joe Dozer, Bakersfield, CA, USA
Money generated from sale of oil which used to pump up stock market in western countries is now invested in the rigion specially in Dubai.The property market is not based so much on credit and is much less exposed to credit problems in USA etc. affecting housing market.
Amir,UK
Amir, London, UK
30,000 men, very few women. They should paint it pink and add that bit of colour it lacks, amongst other things!
PR, UK,
You fail to mention that property development has focussed at the higher end of the market and that profiteering landlords (and lack of lower-end property provision) will soon price-out the many, many people required to service this city. Coupled with an already creaking infrastructure I fear that Dubai will be unable to sustain its undoubted success to date.
You might also want to check the colour of the money being invested!
I predict that in a short space of time we will see the folly of attempting to delivery an undoubtedly grand and ambituous vision in the absence of coherent planning and control.
Transient worker, Dubai,
with the incumbent blast of the real estate bubble, all around the world, i am thinking that even in dubai there will be an escalation of bankruptcies due to the collapse of both financial and property market....Will Burj Tower be the symbol of the new 1929?!?
Claudio, Milano, Italy
30,000 people arrive each month. How many leave each month? How many are transient workers?
The infrastructure is appalling something that Abu Dhabi is addressing before development in its relentless growth.
Im also curious. Where is the enterprise in Dubai? Almost everything is imported and I cant see any wealth creation? Its all money from oil which it seems will be around for a while yet.
N Panasar, Birmimgham,
It will all end up in tears, they will be doing tv programmes in a couple of years time with people crying that they never told me it could fall in value.
Yacht Captain, Portsmouth. GB,