Fara Wave

It is a truth universally acknowledged that people have to find a home. In the Middle East that home still appears to be Dubai, and the population of the city is bulging at the seams this autumn. Could it be that demographics will offset any weakening in consumer demand from the global financial crisis in Dubai?

As you battle with the check-out at Ikea, get turned away again from a popular restaurant or become grid locked in traffic, you are constantly reminded of the reality of life in a boom city. Try to rent an apartment and the rentals will make your eyes water.

But it is true that the crowds came to the Cityscape Dubai property show and left without putting deposits down on off-plan real estate this year. Partly that was because new rules prevented actual sales being completed at the show, but equally the global financial crisis has dented buyer confidence, and the local stock market has plunged. Perhaps most would-be off-plan buyers already have bought enough contracts in property futures.

Villa prices

However, look at the price of completed real estate and the confidence in this market is still very evident. The Meadows villa priced at $1.6 million six months ago is $2.1 million today. Villas might be commanding the biggest price increases, owing to a shortage of supply, but it is remarkable that property is selling at all in the present global financial climate.

Luxury apartments are probably more difficult to shift right now. But the problems in the off-plan, property futures market could come to the rescue of owners of real, real estate. If the off-plan schemes from Cityscape 2008 do not go ahead then that will keep property supply down and help prices later.

Evidence of an incredible local boom is everywhere. Try to park in the Dubai Media City during the day it is impossible. Fancy a look at the new Atlantis Hotel, forget it the place is full. What about going to the supermarket, well not in the evening. As for finding a hotel room: no chance with the Gitex IT show in town this week.

What correction?

Yet remarkably you will still meet many people who are convinced a real estate correction is imminent in Dubai. How can such a booming town have a real estate correction? There is enormous demand for what little property is available for rent, or affordable amongst the completed housing.

Actually one indicator that a property boom is not done is the existence of these skeptics. It is only when they fall silent that you should worry. Remember how all the pessimists had shut up about UK housing in summer of 2007: that was the time to be fearful. Dubai just does not seem to be there just yet.