With scarce oil resources in the Gulf countries, the United Arab Emirates have transformed one of its cities into a glittering real estate business and tourism hub within few years but hardly few know that the magnificence was created with the borrowed money. In the meanwhile, Dubai real estate had become the top most desired sectors of the world, where everyone wanted to invest. Back in 2008, when the global economic crunch hit Dubai, the borrowers realized their cash flows have choked up and their access to new loans has got constrained.

For instance, Dubai World, a renowned holding company of the UAE whose investment span from ports to luxury real estate, is facing a debt crisis that lingers on till today. This company set off its debt crisis by announcing that it wanted to delay its repayments. Dubai is under a huge debt pile and experts do not hope that there are chances for betterment in the next few years in Dubai property sector. No doubt, Dubai has tried hard to shake-off the effects of debt crisis, which exceeds its 2010 gross domestic product of about $80 billion by a huge gap.

However, the efforts did not produce results and created a huge overhand due to unsold Dubai real estate and declining property prices. The International Monetary Fund expects economic growth to pick up to 2.8 percent this year and to 3.2 percent in 2012, but these rates seems so low in comparison to the 8 percent annual rate it scored up in the boom years.

Another example can be sited of Nakheel, a famous developer of Dubai was forced to remove around $21 billion from the value of its Dubai real estate assets, reported their first-half net profit in year 2011. According to their spokesperson, there is relatively a more stable real estate market in Dubai as compared to previous year. Remember, Nakheel has come out to the tune of $16 billion by Dubai, that is owned by the government now but still it owes around $4.8 billion. The outstanding debt is much more due to these and few other big borrowers of Dubai real estate market.