Living Through Dubai’s Downturn

By Sadie Bass

May 18, 2009 9:58am

ABC’s Lara Setrakian Reports: Five weeks ago lightning struck the Burj Dubai, the world’s tallest building and Dubai’s crowning achievement. Some saw it bringing luck — rain, rare as it is in the desert, is a good omen in Bedouin culture. Good enough to reverse Dubai’s fortunes? There are signs of life moving on despite the downturn.  The city’s population is down, but cafés and restaurants are full — though it’s now easier to get a table and take less time to get home (traffic, like apartment rental prices, has seemingly halved).  Markets have shifted to favor the buyer and service has improved dramatically, as business owners stop taking customers for granted.  Dubai just unveiled its latest achievement, the world’s biggest dancing fountain.  During the downturn, Dubai has been a much more pleasant place to live. To wit, the downturn had been steep.  Within a year real estate prices dropped up to 50 percent. The DFM (Dubai’s local stock market) dropped 75 percent, More than half of new real estate projects were cancelled or put on hold.  Beyond numbers, the once unflappable faith in Dubai’s rising fortunes has been shredded. Dubai was once a refuge from the global economic meltdown.  No more.  Thousands of expats have been laid off, many of them graced with just 30 days to find a new job before they have to leave the country.  For some it cuts short their Arabian adventure.  For others it cuts off their livelihood — whole communities of migrant workers no longer making money to send home to their families in Mumbai or Manila.  We met one American, Ana O’Reilly, who was laid off in November from her high-end real estate firm.  She’s now struggling to keep her new, less lucrative job while getting back on her feet. "It’s very stressful, it’s an uncertainty," she told us.  "You don’t want to go home with your tail between your legs." Dubai reshaped the Middle East.  Now it’s being reshaped by the global crisis — a reality check on its bubble of ambitions.  The lumps and bumps on the way down have exposed Dubai for what it is: a city like any other.

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