Glitzy property projects and financial crises tend to go hand-in-hand.

Glitzy property projects and financial crises tend to go hand-in-hand.

It’s probably not statistically valid, but certainly an interesting observation that unusual property projects presage a financial collapse. The two are not cause-and-effect, but there is some logic to it. Whenever property values are so elevated that traditional development projects become unprofitable, people have to find a better way to get a return on investment – like building enormous skyscrapers on a relatively small piece of land, or (in the specific case mentioned in this article) creating new inexpensive land in the form of artificial islands.

“The Skyscraper Index, developed by property analyst Andrew Lawrence in 1999, posits a link between record-breaking tall towers and economies that are about to crash. That pattern played out in Manhattan, where the Met Life Tower and Singer Building began construction on the eve of the Panic of 1907. Two decades later, the Chrysler Building and Empire State Building 1were both at different stages of construction in October 1929, the month of the Wall Street Crash.

Construction of the World Trade Center and Willis Tower similarly spanned the 1973 oil shock, while that of Kuala Lumpur’s Petronas Towers coincided with the 1998 Asian financial crisis. Dubai’s Burj Khalifa, New York’s One World Trade Center and 432 Park Avenue and London’s Shard were all in development when the 2008 global crisis hit. “