26 November 2009
Dubai property developer, Nakheel, has made a request to suspend its debt on the Palm Jumeirah property scheme and other neighbouring developments in the emirate, in a further sign that there may be worst to come for the Dubai property market which has crashed spectacularly in the past year.
The news shook credit markets around the globe and casts fresh doubt whether Dubai will be able to meet its obligations, leaving many projects uncompleted.
Construction work has already ceased on around 400 Dubai property projects around the emirate collectively worth around £200bn.
Dubai property values across the emirate have plunged over the past year, with prices falling by up to 60% year-on-year.
Carl Mortishead, a commentator at The Times newspaper, said: “Dubai, the flighty sibling emirate of the more sober and richer Abu Dhabi, is dragging the financial reputation of the entire Gulf region through the gutter.
“Dubai was sold to the world as a place where West and East could do business by day and play by night. For Saudis and Iranians, it was an Aladdin’s cave of sensuous delights. For Western bankers, it was a tax-free oasis where alcohol and money flowed. Contrary to popular belief, Dubai was never cheap. Everything is imported, including the construction workforce which last year begun to protest against appalling conditions.”
See Also: Dubai (49), Marc Da-Silva (269), Palm Jumeirah (1)
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