Meanwhile, the number of secondary market villas available for purchase at Emaar Properties' fully-completed Meadows planned community has dropped to zero on the property location website Albabworld.com
. It looks as though villas have become scarce while demand is soaring.
Even in the Arabian Ranches, never the most popular location, secondary property listings have fallen from around 80 a year ago to just 18. But even apartments in the best locations are hard to find.
Flats in the well located Greens apartments near to the Dubai Internet City used to be readily available 12 months ago, today only six units are listed on Albabworld.com.
Local consumer surveys consistently show that around 30 per cent of respondents are planning to buy property, a remarkably high proportion of the population considering that many residents in Dubai are transient workers and salaries beneath the executive level are generally too low to service a mortgage.
Very high local rents are probably the reason for this enthusiasm for buying property – which is now cheaper than renting. Plus local residents are keen to join in the capital appreciation bandwagon that they can see all around them.
It is also fair to say that Dubai is now attracting many more affluent white-collar workers to its financial and other service sector free zones, and that these individuals often have had a good experience of home ownership in their own countries. Buying in Dubai does not appear such a novel idea, as it sometimes still does to a dwindling band of long term expatriates.
The local peg to the US dollar also provides a further reason to invest at this time. And it still comes as a revelation to some foreign buyers to learn that UAE interest rates are effectively set by the US Federal Reserve.
Negative interest rates
Therefore, despite the booming UAE economy highly inflationary low interest rates are being inflicted on the economy. And everybody knows what low interest rates and high inflation mean for property prices: they go up thanks to negative real interest rates. The same thing is happening in Hong Kong right now.
On the supply side, people used to worry about their being a possible oversupply of real estate in Dubai. But from the experience of the last weekend we can again see that this simply is not true: there is not enough property to meet demand.
In 2007 on some local estimates around 25,000 units were added to the local property pool. Whatever the big plans and visions the reality on the ground is that not enough is being built. Perhaps too much is being attempted at once, thus nothing is being completed on time.
It matters not much in the short to medium term. The queues can only get longer, and the upward pressure on prices has never been stronger than this, not even in the early days.