Even the most cursory glance at the property sections of a local newspaper reveals that both rents and house prices in Dubai have gone up again at the start of the autumn season. Completed property is at a premium with construction delays hampering the supply chain and new expatriate arrivals growing by the day.
Taking a reality check in the Dubai real estate sector means a review of the columns of local papers to discover how rentals and property prices have been moving.
The start of September adverts reveals a firming of both rentals and property prices for completed homes. Only in the off-plan market are a few 'distressed' sales in evidence, perhaps a harbinger of future 'distressed' sales of completed property in the future but no consolation to somebody looking to rent or buy today.
Let us review how some benchmark properties stand up. The standard one-bedroom apartment in The Greens was Dhs820,000 in early summer, now the price is up by Dhs100,000. Rent for the same property is up from Dhs85,000 to Dhs90,000 plus.
Villas are harder to judge because there are now so few on the market and they move very fast. But with a check book handy a five-bedroom Meadows villa that sold for Dhs3.5 million earlier this summer might command Dhs4.2 million, though the rental is unchanged at around Dhs220,000.
Thus the Dubai property market is still moving upwards, and inflating living costs and more than outpacing the fall of the US dollar to which the UAE dirham is pegged.
Those deciding whether to rent or buy are caught in the classic top-of-the-cycle trap. Do they rent and take the risk that prices go yet higher before an inevitable correction? Or do they buy now and take the risk that the all too evident massive supply under construction suddenly undermines the marketplace?
The obvious delays in delivering finished product should allay fears on the last score. One person's construction delay is another person's price increase. And in the short term the shortage of supply of completed property at a peak time of demand – with the influx of new post-summer expatriates – leaves predictions a no-brainer.
Is Dubai still cheap?
But how much higher could house prices go? Could that Greens one-bedroom flat become worth $700,000 as it would be in London SW1? Or will it stay closer to the $250,000 level?
It has to be said that with Dubai white-collar salaries now on the way up and tax-free take home pay not so far short of London that you have to wonder why property prices are so low by comparison.
On the other hand, London has just been officially named as the most expensive place in the world for residential property, a title that usually precedes a big fall in valuations. Could it be that London property on the way down will be overtaken by Dubai on the way up? Unlikely but who can say what the future holds?