Let the buyer beware…

A few years ago Dubai was ranked top by expats and was considered to be the most lively and up-and-coming city. In a survey out last month, though, the Emirate ranked a lowly 73 out of 100.

A few years ago Dubai was ranked top by expats and was considered to be the most lively and up-and-coming city. In a survey out last month, though, the Emirate ranked a lowly 73 out of 100.

Of course, it is unlikely that all of the respondents have even been to the UAE, but even so it raises some interesting questions for the machine industry. The main point to be raised is; What is Dubai actually for?

Most resident aliens one meets, seem to be in some way connected with the construction industry, which begs the question, how many will stay when the jobs are complete? Are people really going to be attracted to the Emirate by the tax advantages, particularly in light of the soaring inflation? Will Dubai become the banking and hospitality hub to sustain the tens of thousands of luxury hotel rooms?

There is every chance it will, but there is more than an element of risk associated with investing in some projects. The soaring price of steel, not to mention the scarcity and expense threaten to leave a few developments bankrupt, or at least on hiatus.

For the meantime at least, there is no need to worry. It seems that there is no end to the amount of machines coming to the region. Dealers are selling all they can get, while manufacturers are selling all they can make. Resultantly, the secondhand market is very strong, meaning prices at auction stay high. Meanwhile mobile maintenance firms keep their diaries full from all the machines in the area that need servicing.

Just ten years ago, the skyline of the Emirate looked utterly different to what it does now. Who knows what another decade will bring? There is no real precedent for the scale of construction in Dubai, nor are there any guarantees in the stability of machinery depreciation or construction investments. It may well stabilize, but those who want to put cash into the region are well advised to remember the old saying; Caveat Emptor...

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