The real estate industry in the United States has slowly but surely recovered since the financial meltdown a few years back, that is not to say things are just as they were before. A lot of people lost their investments and life savings with the most hard hit areas being in the west around the states California, Arizona and Nevada. Despite this, the financial meltdown wasn’t solely an American crisis, it was indeed a global crises and countries around the world reacted in many different ways to combat this situation.
One of the better examples we have he the United Arab Emirates which is a country with real estate as one of it’s biggest exports (alongside tourism and oil). United Arab Emirates was hit just as bad as the United States when it comes to real estate during that time and saw an immediate halt in most of its ongoing construction and real estate projects. However unlike the United States, they seemed to come out of the crises in a more graceful and civilised manner. Why is that and what can the United States learn from countries like the United Arab Emirates. Click here for more information on real estate dubai.
The Credit Crunch
The biggest thing to take from the whole situation was obviously credit control. Where a country like the United Arab Emirates focuses on true currency value and tangible returns, the United States focused on an intangible growth in the form of loans and mortgages. What that resulted in was a large number of population buying assets using money they didn’t have and realistically had no real chance of returning it. Not only were people in debt for hundreds of thousands of dollars, they were stacking large interest on top of it which meant the problems were only getting worse for them. Ultimately somebody had to foot that bill and it would have to be the government. This couldn’t have come at a worse time for the United States as the real estate wasn’t the only industry that America needed to save, other industries were hit just as bad, namely the automotive industry where the United States holds a large stake in. dubai international real estate on the other hand was better off.
Diversifying Eggs and Baskets
The United Arab Emirates on the other hand focused on industries that didn’t need much saving, and by that we’re really talking about the tourism and entertainment industries. Don’t get us wrong, the United States has a big tourism industry as well but it’s stagnant whilst the industry in the United Arab Emirates constantly keeps growing with new destinations and attractions opening up left-right and center. So to ultimately make sure the United States hedges their risk in the future, we think it’s imperative that the government looks to reduce intangible leading and encouraging growth in lower-risk industries.
To learn more about the credit crunch, click here