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It’s all our fault

It’s all our fault

Who would you blame for the property crash? The hordes of greedy, over-ambitious property developers, or Kipp? If you said Kipp, it’s the right answer (apparently).

October 11, 2010 4:02 by

It seems everyone’s favourite scapegoat has yet another cross to bear. A recent statement from a RERA official has blamed irresponsible reporting by the media for the “damage” suffered by Dubai’s real estate industry.

Speaking at a conference, RERA (Real Estate Regulatory Agency) official Marwan bin Ghalita said, “The real estate sector in Dubai has been hurt by the journalists and media publishing incorrect data on the market. The media is blamed for rising real estate prices… as correct data has never been published… They did not check the accuracy… did not get the correct information which is one of the prime foundations for making any decision. Journalists did not approach official sources to get the right picture.”

Ironically, Ghalita’s comments come amidst reports of four companies suing Nakheel subsidiary The World on account of a breach of contract. Construction of The World, one of Nakheel’s most expensive and ambitious projects that consists of reclaimed islands built to resemble a map of the world, has stalled since the financial crisis. The claims filed against The World by three Sharjah based companies (Global Realty Partners, Gulf Developers and Frontline Developers) amount to a total of $15.3 million (Dh56.19m).

I find it interesting that, in light of court cases like this, some still see fit to blame the media for the mess that is the Dubai property sector. Perhaps the unrealistically ambitious and greedy property developers could take a smidgen of the blame as well?

I remember the days when huge construction projects were being announced on a monthly basis. In fact at the peak of the real estate boom, Emirates 24/7reports Dubai had over 850 registered developers; a figure that has slipped down to a more sober 500 over the past couple of (humbling) years. In addition to the overabundance of developers, we clearly had too many projects. Emirates 24-7 observes that the Government of Dubai’s bond prospectus, filed at the London Stock Exchange, suggests that a total of 495 registered property projects have now either been cancelled, are in the process of being cancelled, or have work which has been otherwise stopped.

Don’t get me wrong, I don’t think the media can claim to be completely innocent (we were too eager to believe in the Dubai dream, and too timid to question the crazy growth), so we aren’t that surprised with RERA’s convictions. But after the judicial, legislative and executive branches, the media has been accused of being the fourth branch of the government (thanks to its softly-softly approach to the Dubai economy and government). If anyone believed that, the ease with which we now shoulder the blame should make them re-think.

The media constantly comes under fire for pretty much everything: the Iraq War, the onset of teenage depression, the status of woman’s body image, to name just a few. The slow speed at which paint dries is probably our fault somewhere along the line as well. Often these accusations are welcome, as they are maliciously motivated and imply we are (to some degree) fulfilling our role of watchdog. But for RERA, there are surely more productive ways it can invest its time.

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  1. Ben on October 11, 2010 5:18 pm

    Yes media can be blamed for printing a lot of PR for greedy developers and not printing enough articles about issues faced by investors. Media in Dubai is to shy to finger point at real issues as they don’t want to upset errant developers source of income and part of Dubai Inc. RERA should however rethink their own position and responsibility in the mess. Just to name a few: They delayed Strata Law for 3 years on request by the greedy and incompetent developers. They did nothing to clean the market by looking at serious projects and dodgy ones. They did nothing to make sure investors moneys went into escrow accounts and were available for them when projects stopped or were scrapped. are not helping investors who are complaining to them since 2008 and finally did not communicate any relevant information to media despite being on daily basis speaking about small things to the press. Maybe the next one RERA is going to blame is the investors who believed in Dubai?

  2. Phil Anthropist on October 16, 2010 7:06 am

    There are few who do not share in the blame for the real estate mess in Dubai. Developers for sure – greedy and over-ambitious. The Government – yes for not having sufficient regulatory control over the process. Banks and financial institutions – certainly, for lending in circumstances where no lending should hve gotten approval. Investors / speculators – yes, for fuelling a real estate bubble in the pursuit of a quick buck (or a quick million).
    At the end of the day, there had to be a correction in the real estate market, even though the level was seriously underestimated, and in general the fingers which got burned were probably deserving of their fate.

  3. Miss Anne Thropic on October 16, 2010 8:52 am

    “The real estate sector in Dubai has been hurt by the journalists and media publishing incorrect data on the market. The media is blamed for rising real estate prices… as correct data has never been published…” says Marwan bin Ghalita.

    So back in the day when things were apparently booming, all those ridiculous rents and inflated property prices as published in newspapers and online, as either articles or in advertisements, were all inaccurate?


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