'We have seen a big surge in interest since George Bush visited Dubai last month,' one agent told AME Info. 'His tour of Dubai seemed to remind people about what is going on here, so perhaps it was worth the inconvenience to residents!'
Underpinning this surge in investment confidence is a quantum shift in the economics favouring investment in Dubai real estate.
Rental yields of 7-10% are looking even more attractive now that the best UAE deposit accounts pay less than 3%. Meanwhile, the cost of borrowing is falling, and real interest rates have turned sharply negative.
Large corporates and even one local hedge fund are in a position to borrow cheaply to put money into the local realty market, and achieve a carry trade between low US interest rates and the high rental yield on Dubai property.
Local home lenders have been slow to cut mortgage rates. But the Commercial Bank of Dubai has broken ranks and is offering mortgages from a little over 5% to clients with the best lending risk profile.
'I think it will take around three months for prices in Dubai to fully reflect these changing circumstances,' said a local REIT manager, speaking off the record. 'We already find that completed property is in very short supply. You can still find a few villas and apartments but not completed towers or compounds.'
Supply delays continue to plague Dubai. Some argue that too much is being built at the same time, so that all the projects are falling back from scheduled completion dates.
With typical delays running from six months to well over a year, the supply of completed property cannot keep up with burgeoning demand from the constant stream of new residents, as many as 30,000 a month, though admittedly not all high income earners.
This is keeping an upward pressure on new rental prices, which are unaffected by the 5% rental cap, and this is driving the rental yield upwards which is presently at least keeping pace with capital value increases.
It looks like another red hot summer for Dubai real estate with the absence of attractive alternative investment options funnelling even more money into real estate. Global and local stock markets look unstable. Hedge funds had their worst January for eight years. Commodities could be about to top out.
But Dubai realty prices could fly a lot further. A new survey from Hamptons International showed prime residential property in Dubai cost an average of $16,500 per square metre compared to $83,750 in London, $43,500 in New York, $38,750 in Hong Kong and $28,250 in Miami. See also:Ras Al Khaimah targets property and tourism for economic growth