Simon Townsend

'We are presently dealing with a lot of enquires from global financial institutions looking at setting up in Dubai,' he says. 'This is at the study stage now but you just have to look at the kind of tax-free pay packages those guys earn to realize that this could transform the Dubai real estate market.

'At the moment I am optimistic but cautious. There will probably be a problem with oversupply in mid-2004 and that could depress rentals. But right now there is not a large volume of property available in many locations and people often struggle to find what they really want.

'The real test for the market will be how it absorbs the supply of new residential property coming on stream from next April onwards. There are 1,000 plus apartments at The Greens and a large number of villas at The Springs, for example.

'Personally I think we will see a big move in Dubai towards better quality accommodation in these locations. If people see they can get more for the same rent that they are paying now in other areas, they will move. That will leave a shortage of tenants in some areas.'

Mr. Townsend's company has been active in the UAE for 27 years and is one of the UK's oldest chartered surveyors with more than 200 years in the business. Cluttons is a name that blue-chip global companies know, trust and consult for advice.

'I don't believe property prices will rise in Dubai, apart from exceptional locations like The Palm, mainly due to the sheer volume of product.

'The delays in land registration and finance, which are very much linked, are also holding back the development of the local real estate market. It is still mainly a market for cash buyers and the real test will be when more finance options become available. Then we will see how many more people will choose to buy rather than rent.'

Cluttons man on the spot has nothing but praise for Emaar Properties and its development of themed communities. He says this has created 'a full range of property options at every level' and developed the Dubai real estate market in an organized and planned manner.

'Emaar offers the full service from mortgages, maintenance and telcoms to providing community centres and facilities,' he says. 'The Dubai residential property market has a good structure to it, and you have to give Emaar credit for that'

But Mr. Townsend sees the Dubai real estate boom cooling off due to the rising cost of construction, particularly for key building materials such as concrete. This he says will impact on the profits of some developers, although the big ones like Emaar will have secured supplies.