Dubai’s property bubble without answers

When property prices rise sharply in a short period of time they call it a bubble. And bubbles eventually burst.

So few could be surprised when the speculation-driven bubble that consumed Dubai’s property industry spectacularly popped in late 2008.

The global financial crisis had forced nervous banks quickly to shut off the free-flowing tap of easy credit that had played such a key role in the bubble’s creation.

Many investors had been hooked via the internet with slick online videos – this one was called The Amazing Dubai and was made by a US-based property company flogging real estate.

If it looks too good to be true that’s because it is. At least half the projects shown on there don’t exist and quite a few won’t ever.

Stuff of fantasy

Bizarrely, the Hydropolis Underwater Resort is ranked 212 on Trip Advisor’s hotel list even though it remains the stuff of fantasy.

Dubai Sports City is also shown on that “amazing” online video but is very much still “under construction”.

It has one stadium so far and lots of empty building sites – nothing like the promotional pictures shown to eager investors.

I met some investors who tied up around $170,000 each in a Sports City development called Oasis Tower 2 that so far resembles a very large (albeit expensive) hole. You can watch their story here:

But what concerns them most – and should concern Dubai’s rulers if they are serious about accountability – is the lack of help provided by the Real Estate Regulatory Agency (RERA).

RERA was set up in 2007 as a real-estate watchdog and should help people wanting to know where their money has gone.

But these investors say RERA now ignores them. I tried for two frustrating weeks to get a response from RERA to these allegations but never received a single reply.

Dubai’s bubble attracted buyers from all over the world – Britain to Russia, Iran to India, even the US and Australia.

Internet forums

Getting answers in some far-off place when things don’t go to plan can be extremely difficult and there’s a feeling that many developers take advantage of this.

The Oasis Tower investors resorted to the internet to try and speak with one voice, finding each other on property forums and realising they are not alone.

Others have gone a step further.

This site tells the story of more than 300 people who claim to have lost nearly $30million in property projects in Ajman, the smallest of the UAE’s seven emirates.

While the Bear Stearns’ and Bernie Madoff’s of the world grab all the headlines, these small-time investors are left to search for answers online – hoping the same medium that lured them to their dream will save it from ending as a nightmare.

Al Jazeera is not responsible for the content of external websites.