The 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 opening of the Atlantis Palm Jumeirah Beach, yet another flash new architectural marvel in Dubai, augmented by yet another onslaught of superlatives, celebrities, and headlines across the world.

Come 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 apparent defiance of the global credit crunch.

Now, that crunch has hit home. This week's Architect's Journal reports 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 Burj Dubai, 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.