The Billions, The Millions… and now the Zeros ..

The Billions, The Millions… and now the Zeros ..

Ali saw it coming months before he died. I wish more of us had sense as well. We are (were) spending billions on real estate projects, hardly learning from our earlier mistakes that an undiversified economy would suffer badly in the event of a world recession. First it was oil now real estate. Having too much of one thing is too risky and it doesn’t need a scientist to figure this out. Its just basic economics.

We were spending billions building these projects, boosting the economy with employment at all levels , but everyone was ignoring the talk about that mythical bubble that would burst the property industry. Luckily world economics has pushed the UAE into a perfect place to sit back and reflect on where it is heading. We are not in recession and insha3llah we wont ever reach that place... but we are not sitting nice either. At this point, the banks for sure will now have to stop lending to everyone for everything, coz as a people, both expats and locals…we suck at economics (I guess like the rest of the world)

Right now I would classify the UAE population into four group:

1) The Super Poor: Zero – 2k per month.
2) The Poor: 2k – 5k per month.
3) Middle Class but really still you are Poor: 5k – 20k per month.
4) The just about making ends meet comfortably: 20k to 30k per month.
5) Rich (You can actually afford that Maserati you drive around Jumeriah in ) 40k+


Poor people (Category 1 and 2) will of course suffer the most coz they cant afford anything now. But restricting loans to these folks stopping them from buying everything from laptops and cars to apartments and even freaking villas, will sure help the economy.

Middle Class people (category 3) Will have to think twice before buying things beyond their budget, so this means they will have to stop pretending to be in category 4 and 5. That means no more loans for villas or even Dubai apartments for them.

Category 4 people (like me), even though we can and should still be able to buy and take loans for assistance with the essentials, we should also learn and see how the world is going deeper into recession and how many people around us in the UAE are beginning to feel the bite. Even those earning in this bracket were facing problems before the crisis began. How many of us earning 25k + still has no money at the end of the month? By no money I mean like under 1000 dirhams in the account.

Too many. We spend on the essentials like, food, rent or mortgage, cars, fuel and education for our kids etc etc which really adds up to a lot… but then we also take out loans to spend more on extra cars, luxury goods, holidays etc… and even that extra villa, just to fake that we are in category 5. The Rich. Seriously. Where's the sense.

This is a good time to reflect. A warning ya3ny, that we need to take account of what we are spending on. While we do this forced self correction, the markets will correct themselves.

BTW…There is an extra category, Category 6…which is exclusively for people who work in the real estate business (that used to include me and includes ,any from category 1 to 5 ). I have nothing to say but ya'll suckers. Don’t cry coz you cant take out loans. If I had my way you'd all be severely castrated just for your stupidity and greed. The bubbles shrinking a lot…and who knows how small it'll go before the night is through. You fueled this mess we are in.

Here's a joke.

Q: What’s the difference between Dubai Real Estate brokers and Pigeons?
A: Pigeons are still capable of making deposits on new BMW’s.