There was no excuse – this was nothing to do with complex derivative plays with alphabet soup style initials that not even the originating banks could understand. Instead anyone who even bothered to visit the place (or even think about it) could see it was built on shifting sands.
Developers played that old trick – telling property investors they would make a "guaranteed" 10, 12, 15 or even more per cent a year because prices could only go upwards.
Now, I might be simple, but if you could really make those returns, why bother selling the flats to anyone? And why does anyone believe the patter of the person doing the selling?
And to make matters worse, celebs were bought into the equation. Now David Beckham may be a great exponent of kicking a dead ball but do his talents extend to predicting long term property investment?
Last year it was reported that Beckham, who already owned a villa in the emirate with wife Victoria, had been approached by representatives of the Burj Dubai tower, a skyscraper set to be the tallest building in the world at about 820 metres and now well behind its schedule.
A source close to developer Nakheel Group told the Daily Star: "Beckham and the Burj Dubai would be the perfect fit...I believe he is being sounded out."
I don’t know what Beckham actually paid – after all the story appeared in The Daily Star. But I do know that several other celebrities were given property at zero or knockdown prices in return for their endorsement.
Now knockdown is what will probably happen. Many buildings will remain just drawings in an architect’s office – others will sink unfinished into the sand.
The attractions of Dubai are gold plated seven star hotels and bling lined shopping malls with the odd (and I mean strange) golf course plus the notorious ski slope with its real artificial snow. The most exciting thing is camel racing but that’s largely banned to Europeans due to the locals not wanting publicity for the cruelty involved to animals and jockeys.
I went there nearly five years ago to visit a friend who works there. Although it was great to see my friend and his wife, had I been there as a normal tourist, I would have been bored to death after two days at most. I have never been back although I passed through the airport around 18 months ago – it had doubled in size compared with 2005.
Property values are best when there is a limit on the land available – so Manhattan is super-pricey because it is very small while someone in the middle of Arizona costs virtually nothing as there is no lack of space.
Dubai has space in spades. And that’s even before they create new space on artificial islands where the flats reach the sky
It never added up. But people fell for it – such is the potent mix of celebrity and the promise of guaranteed returns
What do the guarantees add up to? Not even a row of beans. If a government backed organisation in Dubai can default on international bonds, then the chances of ordinary property investors winning are about in line with those of a snowball in Dubai’s 45 degree plus summer heat.