The Nexus between the Job Market and Dubai's Real Estate
The current atmosphere in Dubai can best be described as uncertain. The real estate sector, once fueling the demand for people has been in the doldrums for the past several months, and some firms have hardly made any sales in the last quarter of 2009.
If one looks at the economy of the UAE at large, one can see that it is by and large driven by four sectors- oil, real estate, trading and banking. Hardly any manufacturing or producing activity takes place in the Emirates. With dwindling to non-existent supplies of oil, the bubble having burst on real estate, and the banking sector having tightened its grip on lending activity, there is only one direction in which the Dubai economy is headed and that is down. The present credit crunch has created a lack of demand from regular individuals as well as firms and commercial entities- even property developers. It is leading to a self perpetuating crisis that will worsen if no attempts are made to correct it. Some customers are unable to secure a loan to buy property, as local lenders have slashed home financing from 90 percent to as little as 50 percent in recent months. Agents worry that the tightening lending conditions have caused a real downslide in the real estate market.
The real estate sector also feels that lack of proper and sufficient regulation by Dubai's Real Estate Regulatory Agency and unclear information regarding new laws and procedures from Dubai's Land Department will confuse any would-be buyers and sellers and make it generally more difficult to move business efforts. For instance, when people asked about the enforcement of the current ruling against sharing of villas, nobody came up with answers as to by which law this is prohibited.
Much to their dismay, buyers of Dubai property have learned that there are two factors to owning a property in Dubai that do not apply anywhere else in the world. One is the exorbitant purchase price and the other is the rapid escalation in maintenance fees. Clearly there needs to be more transparency and logic behind the rapid 80 to 100 percent escalation in maintenance fees for some projects. Nobody is going to stand for this for long and there is a strong rumor that the fees are going to strengthen other fledgling companies within the development group, which is really unacceptable.
In the light of all these factors, it is clear that the economy and the job scenario in Dubai are not going to recover very soon. In a recession like atmosphere, no sector of the economy is safe because the overall sentiments are down and the future outlook is negative. Ultimately user spending on everything but necessities declines, resulting in job cuts in some industries.
In the current scenario, one way out is that if the leaders of the economy revisit their plans and adapt their vision to the current happenings. The best plan would be one that is directed towards keeping the majority of the people happy, because it is their sentiments and their purchasing power that counts and would make the difference in reviving the economy. Notwithstanding the best high end international brands available in the malls, the majority of the people of Dubai (by this I mean migrant workers) earn between AED 5000 to AED 15000 at present and not AED 20,000 and above. With this majority spending again, volume of business will go up and so will profit margins. But when their sentiments are down because of job insecurity, high rents, irritability due to road conditions, and staying away from their loved ones as they can't sustain families here – they would spend less.
The leaders of Dubai's economy will have to focus on this income group and go beyond just talk if Dubai is truly to be revived again. There is more activity being noticed at job sites Abu Dhabi than job sites Dubai in terms of UAE job openings. Workers are now looking for job stability rather than size of earnings, even if they have to give up the relatively easier atmosphere of Dubai to work in more stringent conditions elsewhere in the UAE.
Questions and Answers
If you are planning to look for a job in Abu Dhabi or have already found one, it would be very useful to find more about the city and the kind of lifestyle that it offers. The accommodation, getting around the city, education for children, lifestyle etc are the aspects that one needs to know a little about before landing in the city.
There are exciting job opportunities in the city for the deserving. With a population of over 1.6 million residents, Abu Dhabi is undoubtedly UAE’s largest emirate.
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Like a jewel in the crown of the UAE, the city of Dubai is not only one of the fastest growing but is also famous as an epicenter for employment and new job opportunities. Being truly cosmopolitan, Dubai welcomes every one with open arms and is therefore regarded as the city of dreams for many desirous of getting here to earn and live.
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