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Residential prices in the UAE were more unpredictable than in previous quarters the report said.

“Our outlook remains tenuous, but the recent burst of activity raises exciting new questions about where these markets are headed,” said Jesse Downs, Director of Research & Advisory Services at Landmark Advisory.

In Dubai, villas accounted for 60% of third quarter 09 residential sales, with prices increasing 8%.

The report identifies that projected villa supply and current sales inventories are currently relatively stable leading Landmark Advisory to predict that villa prices are likely to remain stable in the short term; “if investor confidence and inventories are stabilizing, then we may have possibly reached a price floor for villas,” said Downs.

The latest report found that apartment prices fell only 3% in third quarter 09, in comparison to falling 17% during second quarter of 2009.

Leasing rates for villas in Dubai have increased 6%, in line with sales trends.

There are no property taxes in Dubai, so the costs of purchasing in Dubai are low in comparison with many other countries. You should, however, check the ongoing maintenance charges for the property; if it is on a luxury development with a range of top-quality facilities, you may be faced with a significant annual outlay.

You can borrow 60 times your monthly salary to fund the purchase of a property. It is advisable to have a mortgage agreed before viewing properties as sales tend to move rapidly and you may lose the chance to buy house Dubai of your choice if you need time to put finance in place after making your offer.

Dubai rentals are among the most expensive ones in today's times. They may give jitters to tenants, and a pleasant smile to property owners. Homes could be sold at a premium after a few years, since the real estate would continue to sore in Dubai in the years to follow. These aspects lead to many foreigners and expatriates buying freehold properties in Dubai as a way of making money. It's a win-win option for those who know how turbulent times they were living in in a highly globalized world.

It's far from clear, however, if Dubai will get many takers at prices that are competitive. Dubai's finances aren't transparent, and a giant real-estate supply overhang is still looming over the city-state's economic prospects.

A spokesman for Dubai's finance department was unavailable for comment. The documents have emerged amid speculation that the department is preparing to raise the second $10 billion of a $20 billion bond program launched in February. The first tranche was snapped up by the federal government, essentially a bailout aimed at supporting Dubai's struggling state-controlled companies at the height of the financial crisis.

Dubai's finance department is halfway through a round of global roadshows that began last week in Hong Kong to market its debt to investors. Officials met with investors in the Fairmont hotel in Dubai on Sunday. The next stops are London and Frankfurt. Dubai's finance department has said the road show isn't connected with any plans to launch the next tranche of its $10 billion bond program.

James Hunt
Master Key