The UK hasn’t built a new runway for over half a century; in this time, Dubai has built an entire city. It now has a problem the UK can only dream of: an oversupply of housing.
I returned from a decade-long-stint in Dubai at the beginning of this year; a hybrid of Cairo and Las Vegas, it’s a place that can simultaneously baffle, beguile and bewilder. And yet, as the UK enters into messy divorce proceedings with Europe, I find myself craving the security of a benign dictatorship.
In 1894 Dubai’s ruling Sheikh stood on the fringes of a sleepy pearling village and shrugged off taxes, declaring that the world would come to this tiny speck of a port to do business. Today Dubai hosts more visitors than New York. In the intervening decades, Dubai may have had more makeovers than Madonna, but construction has been its constant.
Not even the recession could silence Dubai’s construction sites. Some of Dubai’s most ambitious projects, including Dubai Mall, an airport terminal exclusively for its national carrier and the Middle East’s first metro, were built during the dark days of 2009. I remember walking through giant, empty shells of malls and metro stations, believing they would lie dormant until the desert reclaimed them. It wasn’t the last time I was wrong about Dubai.
‘Build them and they will come’ Sheikh Mohammed said, albeit in a much less poetic way, when he lavished an $8 billion support package on Dubai’s biggest property developer in 2010. Dubai was still reeling from its property crash, which had demolished prices by as much as 60 per cent. Everyone, myself included, thought it was madness to fuel an oversupply by building more properties when thousands lay vacant.
By 2013, property prices were surging by as much as 60 per cent as Dubai’s economy grew at its fastest rate for six years. Dubai Airport is now the busiest in the world, soaring over Heathrow, and its metro is a posterchild for modern infrastructure. Dubai currently has an oversupply of some 40,000 residential units, which are expected to be filled as the nation prepares to host the World Expo in 2020. Dubai knew it couldn’t wait for its population to swell, or for property prices to rise, before it started building again.
Dubai builds properties in the blink of an eye. One day I would drive past an empty scrub of desert, the next day a new block of flats would have erupted from it. Dubai is a city on steroids. New buildings shoot up as quickly as Sheikh Mohammed snaps his fingers. This is an obvious advantage of a benign dictatorship, but also of an emirate that is prepared to rewrite the rules.
After the property crash of 2009, Dubai tore up its regulations and started again. It doubled land transaction fees, capped mortgages and kicked out speculative buyers. Regulations are there to control growth, but when they stifle growth, Dubai treats them like a tumour and cuts them out before you can say red tape.
Dubai’s eclectic buildings, ranging from the tallest in the world to secret chambers under the sea, are treated as a badge of honour. Dubai’s construction sector advertises how well the economy is doing. Construction builds the economy, not the other way around. When construction halts, so does economic growth.
Every £1 invested in construction generates £2.84 in wider economic benefits, according to the UK’s National Federation of Builders. At a time of great uncertainty, Britain has the chance to show how construction can rebuild confidence, if it is prepared to stop dithering and invest in it.
IMAGE CREDIT: Nepenthes
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