Dubai property market prices to remain mostly flat in 2012, says CBRE

Green said he expects prices to remain relatively flat across the emirate, with price limited to a few areas. "You will only see growth in developments that are occupied and proven popular," he told AMEInfo.com "It is down to individual properties at this stage...there is no way we are going to see a blanket level of growth."

Developments where demand is strongest include Dubai Marina, Palm Jumeirah, Downtown Burj Khalifa, and Emirates Hills. "These developments are several years ahead of a lot of the upcoming freehold developments, and I think because of that they will maintain their popularity over the next couple of years until these new projects can get more established in the market," he said.

Dubai is likely to see about 18,000 new units enter the market in 2012, which would be lower than the average figure in recent years, he said. "For the first time Abu Dhabi will produce more supply than Dubai in 2012, so we can see where the shift is headed in the property cycle between the two cities," he noted.

Although the Dubai market has become more price sensitive overall, high-end villa properties on the Palm and Emirates Hills continue to be in strong demand. "That end of the market is maybe less flooded and less impacted by what is going in the rest of the world," he noted.

On the rental side, the influx of new supply is giving tenants far more options to choose from and more freedom to move, he noted. "Because there is so much more affordability in the market, occupiers can now choose more and more where they want to live, whereas before choice was based on price sensitivity," he noted.

Still, rental prices will vary widely depending on the quality of the development. "The better will continue to get better, so those areas that have everything in place will start to see some rental growth, while outlying areas will continue to suffer because there are so many other options in the market," he said.