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Boom’s over!?!

Boom’s over!?!

Calm down. Apparently The National can’t tell a minus from a plus sign.

October 7, 2008 5:48 by

Scott MacMillan

The Abu Dhabi daily The National landed on readers’ doorsteps yesterday morning with this headline dominating the front page of the business section: “Dubai house prices ‘fall by 16%.’”

Most readers seemed to take it in stride and went about their day despite the fact that a drop in Dubai house prices is known to be the eighth sign of the apocalypse.

In a market accustomed to jaw-dropping growth in real estate prices, a quarterly fall of 16 percent would be no small news. Although the article noted the supposed dip may be attributed to seasonal factors, it also said the data suggests Dubai’s six-year boom “may finally have ended.”

Eh – one itsy-bitsy problem. Prices didn’t actually fall by 16 percent, as a corrected online version of the article shows. Prices slowed to a growth rate of 16 percent. Big difference, people.

The original article can still be read online here.

This was no typo, but rather an apparent misreading – and a gross one, at that – of both the Colliers International report on which the article was based and a follow-up interview with Ian Albert, a regional director of Colliers.

The National originally quoted Albert saying, “In the first quarter, the average price went up by 43 percent while in the second quarter they came down by 16 percent.” In the corrected version, he ends the sentence with “in the second quarter they (slowed to) 16 per cent.”


Colliers released the report on the eve of Cityscape, the massive real estate expo which is under way in Dubai. Nakheel stole the show with plans to build another world’s-tallest tower here, bucking fears of a downturn.

Colliers says prices went up 43 percent in the first quarter and 78 percent year-on-year in June. It’s difficult to assess the suggestion that the slowdown to 16 percent might be seasonal. It would have helped, for instance, to have been shown similar first-to-second quarter fluctuations, if any, in previous years.

The National’s misreport could hardly have come at a worse time for property owners or anybody else with a vested interest in higher prices, and the paper likely caught some flack for it (and if not, we hereby give it flack).

Fears of a Dubai slowdown are catching the attention of the international press. The International Herald Tribune reported on Sunday that “cracks are appearing in the oil-fueled boom that has made Dubai … a global byword for unfettered growth.”

The article went on to mention Dubai’s recent corporate scandals, the central bank’s recent liquidity injection to help banks keep up with runaway borrowing, and efforts to clamp down on rampant speculation – familiar terrain to those following the market here.

The IHT found the following supporting anecdotal evidence: A Lebanese real estate broker who now “stalks the lobbies of hotels, trying to find clients,” and tells the paper: “The market is sleeping.”

Here’s the funny thing. A US homeowner would trade in his swimming pool to see a quarterly price rises of 16 percent, provided the bank hadn’t seized the house already.

Yet in Dubai, 16 percent is considering “sleeping”? Granted, this was back in the second quarter – a lifetime ago in financial terms.

Colliers now says it expects the market to remain flat from now until 2010, according to The National (both versions).

Flat means not rising. Flat means sleeping. Flat means the boom is over.

Next up: Hot properties in Armageddon.

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