Hard lessons learnt in these trying times

Many of us are trying to find solutions to the downturn — locally, regionally and globally. As for the real estate industry, residential sale prices have dropped from their soaring peaks, transaction volumes have vastly reduced, financing is difficult to obtain, buyers are pessimistic and sellers are hurting with the slump in prices.

In addition, we are in the heart of the summer which means that many potential clients are out of town.

For centuries, financial downturns have shaken empires and altered history, and it's happening again now.

Like Warren Buffet once said: "What we learn from history is that people don't learn from history."

In this modern day example, investors were so excited about the potential. They lost sight of reality and hope triumphed over reason. Some purchased at the top of the market while others spent on luxury acquisitions, bought bigger houses, expensive cars, over-expanded their businesses and, unfortunately, failed to save for the eventual rainy day.

It's no secret this recession has, and will continue to, run deep into pockets, and perhaps one that will go down in history, having significantly changed the way we think about what we have and how we manage our lives. However, while recessions are unsettling they are also cleansing.

The pressure of a downturn forces us to rethink what it is we do and how we do it in order to ensure our survival. The result of this pressure is often productive innovation that is both necessary and healthy for organisations, individuals, and the economy as a whole. This sets the stage for the next phase of prosperity that inevitably follows a recession.

Psychological defence

Few careers have benefited from the recession, although the economic downturn has seen a boom in psychiatry and even stand-up comedy. Perhaps, when we're feeling completely powerless, making fun of the situation, and laughing at ourselves gives us a sense of power and helps us strengthen our psychological defence.

As the law of physics states, what goes up must come down making Dubai's current economy a constant reminder of this famous adage. History has proven that an economy will not keep expanding indefinitely — eventually it will contract and then recover. So, if every boom has a bust then, fortunately, every cloud has a silver lining.

Needless to say, the downturn has thrust thousands of residents into survival mode, and surviving is all about doing more with less. So, when employers are cutting salaries and people are losing their jobs the general atmosphere becomes less about lifestyle and more about life values.

We have to ask ourselves what we're willing to give up, and what is essential in our lives as consummate consumers. Do we need to cut down on eating out and perhaps learn to enjoy cooking at home, or to find joy in life's simpler and less expensive pursuits such as reading or enjoying the great outdoors? Whatever our choices, making prudent lifestyle adjustments will help all of us stay financially afloat.

The government is also watching its cash flow by reducing expenses, but without damaging the core of Dubai's commercial machine. It is a challenge to find the balance that will keep the deficit under control and at the same time keep the economy stimulated enough to maintain its population.

A brain drain is most definitely not what we need, but keeping qualified people here requires jobs. Businesses create jobs and none of these will grow unless it is appetising for people to stay and for those who have left, to return.

During this period, all of Dubai's services will be tested — if the UAE government charges at every turn to increase cash flows to maintain the services, it will prolong the drive for people to return and set up new business.

However, despite the gloomy climate, why do we still see people weathering the storm and sticking it out in the city? Because Dubai has an exceptional standard of living, safe environment, impressive infrastructure, world-class education and medical care, vibrant nightlife, countless leisure activities and clean beaches, all of which, comprehensively, surpass many places in the world. From the tax-free living to the variety of shopping experiences in countless high-end boutiques and gold and spice souqs, Dubai is — and hopefully will — always be a highly appealing place to live.

The writer is the CEO of Better Homes.