Where Have All the People Gone?

Dubai feels like a ghost town these days. It's like it's summer holidays all the time.

I first started noticing right after Christmas as I was making the school run to drop off Lyra. The traffic queues used to back up right to the entrance into Mirdif. But in the past week, I've been able to run Lyra all the way to school with barely a traffic slow down. I'm not traffic expert, but certainly it seems as if there are about 30% less cars on the road. Feels like even less, but I know that even a 10% reduction results in lots less congestion. The odd thing is that the school isn't really reporting a huge reduction in the number of students. And certainly the playground seems as busy as always.

Since people are here on work visas - if they get laid off, then they have to leave. The news has been reporting the shut down or slow down of projects and many companies have been announcing lay offs. So, unless these folks have new prospects, then most of them have had to leave the UAE (no work, no visa). Since nothing is ever made official here, the rumor mill has been running rife. Some have said that over 250 cars a week are abandoned at the Dubai Airport. Others have reported 45,000 work visa cancellations last month.

But on the other hand, a villa went up for rent around the corner from us and within a couple days, the "To Let" signs were down. I can only imagine the place was rented. And the new villas across the street all seem to be filling up.

Down in the Marina area, where over 100 high rise towers are all being constructed at one time, there seem to be a lot of empty buildings. I've heard it's a combination of no water service or electricity service (someone forgot to plan some essential items). Or also just that there is an oversupply in the market. Last summer, I heard a report that over 140,000 new dwellings (houses, townhouses, or apartments) were going to be completed in this year. Even with a booming economy, one wonders how 140,000 new homes are going to be filled. And now, the population is shrinking.

Certainly, the big worry here is the real estate market. Some areas have seen 40% drops in values (mostly apartments in the high rise areas). But even in the upper end of the market there are 10-20% drops. And suddenly so many people are willing to negotiate their price - whereas before they were asking for premium. This market was full of speculators. People who expected to buy a property before it was built - own it for about 6 months or until it's close to being lived in - and then sell it on for massive profits. This is what was feeding the huge boom in prices here. Now, they're sitting on properties they never meant to own, can't sell them on, and are unable to make the payments to the bank. Hmmmm- sound familiar.

What will be interesting is to see how much the population drops. Lots of folks are predicting a huge drop when schools are finished. They're saying that people will go home for the summer and not come back. Perhaps they're right. I wonder if the schools will then stop jacking up their fees so much.

In the meantime, I'm enjoying the relative free flow of traffic (and now I've jinxed myself for the drive home.)