Booms and busts
Dubai's stock market crashes
Shares in Dubai's stock exchange fell 6.7 percent today, down to 4,009.01, on news that Arabtec, the United Arab Emirates' largest building firm, was laying off workers. Arabtec is known for its wildly ambitious construction projects, including the world's tallest building, the Burj Khalifa, and more recently a plan announced in 2012 to build a complex that includes the world's largest mall and 100 hotels.
Dubai has been in something of a boom in the last couple of years. Since June 2012, shares in Dubai climbed 250 percent and real estate prices have shot up a world-leading 27.7 percent in the last year. Dubai's government tried to cool the boom by restricting mortgages to 60 percent of a property's price, but rather than steadying growth this appears to have backfired. Dubai's markets have now been falling for the last couple of months, leaving them down 25 percent from their May peak.
But the slump may not last. The United Arab Emirates is one of the safest and most stable places in the Arab world, and with the region erupting into turmoil, Dubai may be seen as something of a safe haven. As Drake Bennett at Businessweek argues: "There aren't many stable places for Arab investors to put their money. Compared with civil war and marauding jihadis, a potentially overheated property market seems pretty unthreatening."