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width="1" height="1" //divpThe fireworks have fizzled out, 4,000 lobster shells are being scraped
into the bins, and Lily Allen's probably reaching for the paracetamol – but,
she won't be the only person in Dubai with a hangover today. Yesterday saw the a
href="http://www.guardian.co.uk/world/2008/nov/21/atlantis-palm-dubai-kylie-lohan"opening of the
Atlantis Palm Jumeirah Beach/a, yet another flash new architectural marvel in Dubai, augmented by
yet another onslaught of superlatives, celebrities, and headlines across the world. /ppCome this
morning, it's not just the champagne that's gone flat. It has finally happened: the Dubai bubble
has burst. Architecture-spotters like myself have looked on in amazement, or rather incredulity, at
the way the tiny emirate has continued to unveil ever grander construction projects
– taller skyscrapers, huger hotels, vaster artificial islands
– in a
href="http://www.guardian.co.uk/artanddesign/2008/sep/25/architecture.middleeast"apparent defiance
of the global credit crunch/a./ppNow, that crunch has hit home. This week's a
href="http://www.architectsjournal.co.uk/news/dailynews/2008/11/staff_axed_as_credit_crisis_hits_dubai.html"
Architect's Journal reports/a that "architects and developers in Dubai are freezing recruitment and
making redundancies as the emirate's real-estate market begins to crumble." Large developers in
Dubai are laying off staff, including Emaar the company behind the a
href="http://www.burjdubai.com/" Burj Dubai/a, the world's tallest structure, the magazine reports.
Other headline-grabbing projects like the Palm Deira, the next artificial island planned off the
coast, are on hold indefinitely, and foreign architects and construction specialists out there,
such as RMJM and Ramboll Whitbyird, are making staff cuts or freezing recruitment as a result, says
the AJ. /ppAccording to one British architect I spoke to, who was in Dubai just 10 days ago, the
situation is even worse than that. "Projects are being pulled left right and centre," he said.
"Unless they've been funded by a sovereign wealth fund, they're being pulled. A lot of things have
to be redesigned more cheaply, to sell at lower prices. Where people have made first down payments
on projects, they're not making the second one. And a lot of what has been completed will be
standing empty."/ppNot that anyone in Dubai will officially admit any of the above. The general
climate is one of denial, say insiders. "Nobody wants to lose face, and everybody's trying to put a
gloss on bad news. No one's come out and cancelled anything, but a lot of things are 'on hold'
indefinitely." /ppDubai's "build it and they will come" philosophy has worked spectacularly so far.
It has successfully jostled itself on to the world stage, largely by pulling off previously
unthinkable architectural feats and boosting them to the skies with juicy publicity. Remember when
David Beckham was buying a house on the Palm? How many people have seen him there since? Still, the
publicity worked: properties on the Palm changed hands for huge sums before they were even built,
peaking at a preposterous £5m. Today those houses are apparently closer to £1.8m, down
from £2.7m just two months ago. /ppReality however, has finally come to town: the Dubai
Financial Market – the general stock index – has fallen
from a high of 6,315 earlier this year to just 2,012 yesterday. Emaar's share price has plummeted
79% in less than a year; according to some estimates, property prices have fallen by as much as 49%
in parts of the Dubai market. The overall figure is much lower, in the region of 4%, but this is a
place that's become accustomed to its figures only going in one direction and a lot of people are
being caught out by the turnaround./ppSo now, it's more a case of "don't build it, because nobody
can afford to come." The general destruction of wealth in the rest of the world will not help
Dubai's tourist industry either. Fewer people have the income to afford a Dubai-standard holiday,
and even those who do might be put off by the authorities' response to the a
href="http://www.guardian.co.uk/world/2008/oct/17/dubai" recent "sex on the beach" scandal/a, in
which two Britons were jailed for three months for their public canoodling. Needless to say, we can
expect discounts on rooms at the Atlantis Palm Jumeirah Beach pretty soon. /ppWe cannot simply
write off Dubai though. It's already too well established for that and it's still in a very strong
position to emerge as a dominant global financial centre, having taken less of a battering than,
say, London or New York in the past year. The Burj Dubai is likely to remain the tallest building
in the world for quite some time (surely nobody in the world has the appetite to challenge it?),
but for the time being, the a href="http://www.nakheel.com/en/corporate" elaborate man-made
coastline of the future/a that has become Dubai's abiding image is likely to remain just that
– an image./pdiv style="float: left; margin-right: 10px; margin-bottom:
10px;"ullia href="http://www.guardian.co.uk/artanddesign/architecture"Architecture/a/lilia
href="http://www.guardian.co.uk/world/dubai"Dubai/a/lilia
href="http://www.guardian.co.uk/business/creditcrunch"Credit crunch/a/lilia
href="http://www.guardian.co.uk/business/globaleconomy"Global economy/a/li/ul/divdiv
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