Speculators under pressure, end-users profit

For one thing, selling prices have gone up to match the huge demand for property. For another, the developers have steadily made speculation less attractive by imposing high transfer fees and increasing deposits and accelerating payment schemes.

Thus on recent projects such as the Burj Dubai and the Golden Mile on The Palm, Jumeirah, speculators are having difficulty in getting any premium on their original investment.

This is going to lead to financial difficulties for the smaller players who may have overstretched themselves in taking stakes in a number of properties, never expecting to have to make the final payments.

However, this is also a bonus to would be end-users - i.e. those who intend to live in a house or apartment for many years probably on a mortgage - particularly those who missed out in the first rush to buy in Dubai.

Fortune favours the long-term investor in property - and not the short-term speculator. Only those speculators bright enough to quit while on top - and that will not be the majority - will still be in positive territory.

Meanwhile, end-users who buy property at the still very reasonable prices found in Dubai will find more property available than hitherto. Quite how long developers will continue to accommodate speculators who want a refund of their deposit is an interesting point, but for the time being this puts a floor on prices.

It is only to be expected that as more distressed speculators decide to cash-out that developers will take a harder line. But the developers themselves will not want to create a disorderly market in Dubai, and as the main developer in Dubai is the Government this is not a factor to be underestimated.

Sales by over-stretched speculators could also be a dampener on new projects, and this surely highlights where an element of the demand for Dubai property has been coming from. If this demand falters then the release of more projects will make little sense and the market will have to go in to a corrective phase while end-users and properties are matched.

Recent developments in the Dubai mortgage market - with more products available for a wider range of lenders - is also likely to encourage investment by end-users. So too would a new federal or local property law which many insiders say is not far away.

For the fact remains that paying rent in Dubai is an expensive and unavoidable part of living here. Saving that rent by investing it in a property is a very sensible thing to do.

Hence even if your home is worth half what you paid for it in 10 years' time, that would still be quite something, while renting a property in Dubai will only leave you with happy memories!