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Dubai Property Slump Triggers Kabul Boom
April 14, 2009Article by Ray Withers
Once the only boom in Kabul was the sound of mortars and rockets – but now there’s another less sinister property price boom. A four-bedroom house in Kabul, the capital of war torn Afghanistan costs as much as £350,000 despite the terrorism, crime and corruption. Last year, the same house would have cost a fraction of the price, but the domino theory of property investment has seen values rise by about 75% in Kabul in the past year.
The Kabul price boom is a result of the Dubai property market collapse.
Property in Dubai is aimed at the elite who can afford a millionaire lifestyle, like sports people, actors, musicians and business people. Unfortunately, the market was built on sand because those with the most also lose the most in a recession. The property market in Dubai has nosedived by an estimated 25% and development is almost at a standstill.
The shakeout has shown that many of the rich investors were Afghan warlords and drug dealers who were laundering the dirty gains through property and now they want out. The cash is flowing out of Dubai, causing an even bigger slump in the market and flowing back to Kabul, where even modest property commands a premium. In the strange world of property, someone’s misfortune is another’s gain – and the Dubai property price fall is making some attractive investments bubble to the surface.
Like The Cube that is intended to be one of the most upmarket hotel destinations in Dubai’s new sport city – five square kilometres of sporting playground with a Formula One circuit to modern stadia for athletics, cricket and football. Sports city is already the venue for the 2014 Asia games and is among the bidders for the 2020 Olympics, and The Cube is at the heart of all the fun. The Cube is a unique and innovative landmark tower at the very centre of Dubai Sports City. This condo residence will be managed and operate as a five-star hotel, complete with state-of-the-art fittings and furnishings in apartments, and with ultra modern facilities and amenities.
Costs range from £307,317 for studio apartments to £478,804 for two bed apartments, from consultants Property Frontiers, of Oxford. Apartments will be rented back to the management company for resort use. Owners will receive 50% of the net operating profit as income. Owners are also entitled to use their luxury apartments for 30 days per year.