{"id":60000,"date":"2009-12-02T14:38:00","date_gmt":"2009-12-02T19:38:00","guid":{"rendered":"http:\/\/www.businessinsider.com\/chart-of-the-day-dubais-average-property-prices-2009-12"},"modified":"2009-12-02T14:38:00","modified_gmt":"2009-12-02T19:38:00","slug":"chart-of-the-day-dubai-shows-what-a-property-plunge-really-looks-like","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/60000","title":{"rendered":"CHART OF THE DAY: Dubai Shows What A Property Plunge Really Looks Like"},"content":{"rendered":"
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Here’s essentially what caused Dubai’s debt extravaganza to finally come to an end.<\/p>\n

Far too much easy money flowed into Dubai during previous years, fueling a massive construction boom financed with debt. For awhile this debt looked sustainable to those involved because it was ostensibly backed by valuable property.<\/p>\n

Yet when the global financial crisis hit, property prices fell in many parts of the world. Dubai property prices were hit especially hard.<\/p>\n

As shown below by the skiing Emirati, Dubai property rates per square foot fell 45% from Q3 2008 to Q3 2009 according to Colliers International.<\/p>\n

Thus just as many American’s went underwater on their mortgages due to the American property crisis, owing more to the bank than their house was worth, the same thing basically<\/em> happened to the Nakheel property business of the Dubai state-owned conglomerate Dubai World.<\/p>\n

Combined with near-term cash flow constraints, this finally forced Dubai World to admit to its creditors that it would not be able to meet all of its debt obligations.<\/p>\n

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