A few months ago, I spent a few days in Dubai on business. I was impressed by the energy and modernity of the city. I actually liked the faux Moroccan style of the hotel I stayed in and the artificial nature of the constructions somehow felt aesthetically pleasing. I was shocked by the number of constructions. I counted over 70 40+ story buildings in construction and was told that there were around 200 40+ story buildings being built simultaneously. Imagine building New York from scratch in 3 years!

Despite the recent boom, anecdotal evidence seemed to point to a bubbly environment – I was told (but did not confirm) that inflation was around 18% while interest rates on mortgages were around 10%. With negative real rates no wonder people are borrowing to buy… That said even if the real estate market does crash the infrastructure that has been built will last for decades and set the basis for future growth in Dubai.

All in all, I was impressed by the progressive nature of the country and its people and will definitely be back to kite surf and race dune buggies in the desert!

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  • Dubai is impressive indeed, with its clear announced ambition to become the 21st century world showroom of the largest private wealths on earth. But when I think about Dubai and see pictures of all those crazy projects, I can’t help to not forget those other rare images of the inhuman conditions under which the dozens of thousands men who build these buildings work. Slavery was not worst. At least it gave humanists a precise ideal to fight for. Versailles was never build this way. Thus Dubai also ask us the philosophical questions of humanity goals. And for sure Dubai is not mine.

  • I wonder if you can create fully hedged position by depositing money in the bank at >inflation long-term interest rates and borrow against that deposit to buy real estate. do you know equity requirements in mortgages?

  • Great to see you made it out to Dubai– My grandparents and uncle live there (I’m sure you saw many indian-folk.) I’ve seen it go from a cozy desert town to bustling metropolis… and I snowboarded in a mall!