This evidence is anecdotal but clear enough if you scrutinize the listings on property portals such as Albabworld
Take The Meadows villas in Emirates Hills, for example. Here the asking price for a five-bedroom villa was around Dhs4.8m in June while the price of the same accommodation is now on offer for Dhs5.3m; in addition the number of Meadows villas for sale on this portal is down from 20 to 12.
Or consider a one-bedroom flat at The Greens, a popular development opposite the Dubai Internet City. Units that were for sale around Dhs900,000 are now not priced at less than Dhs1.06m. Again the number of units available for sale in The Greens is down sharply.
Residents in Emirates Hills regularly have agents walking the streets and asking anybody they meet whether their home is for sale. Others appear to have access to Emaar's lists of owners and make regular phone calls in the hope of finding sellers.
And the shortage of completed property is evident across Dubai, even in districts where sales had slowed earlier in the year. For instance, the Arabian Ranches only has 38 villas available at the time of writing, while that figure was well over 100 this spring.
What this surely reflects is that the supply of property to the market in Dubai is not keeping up with burgeoning demand. And there is a very big difference between launching a real estate scheme and delivering completed property in Dubai.
Perhaps there is too much being done at one time and not enough being finished; or the initial estimates of units under development were greatly exaggerated. It matters not a great deal what the explanation is, the upward pressure on Dubai house prices is plain to any observer.
And to some extent this is just a process of catch-up as house prices in Dubai still lag behind comparable locations in other parts of the world. And the very attractive 7-10 per cent rental yield also attracts investors and is driving up prices.
Eventually Dubai prices should reach a level at which rental yields come into line with global norms. Or alternatively rental prices should fall to depress yields – but in the absence of any oversupply at present that looks most unlikely to happen.
The constant flow of newly arriving expatriates is probably the biggest pressure from the demand side of the equation. Airport arrivals in 2007 are expected to top 34 million, up by 18 per cent on the previous year.
These are, of course, not all new residents, far from it. But the increasing flow of bodies through the airport is surely an excellent indication of the level of growth going on in Dubai which is presently phenomenal.
Will this level of growth prove unsustainable? Well, Dubai's infrastructure is doing a remarkable job at absorbing new residents, and its traffic jams are being tackled successfully now. But clearly growth can slow from this level and the demand for housing will still be strong.
When will it end?
It would be a bold forecaster that suggested house prices and rents will fall in 2008. EFG Hermes has posited 2009 as the point when supply begins to outstrip demand, while MEED plumps for 2010.
So by the time house prices start to decline, even a cautious estimate – extrapolating 2007's upturn – would suggest that prices may be 25-30 per cent higher than they are today. Every property market has its own internal dynamics and Dubai seems locked into boom mode.
See also:Latest Cityscape newsMiddle East real estate: when will the boom end?Special Report: Buying Property in the UAE