With the development of a sophisticated mortgage market and the ratification of foreign ownership laws, 2006 has been a great year for Dubai property market and has resulted in Dubai’s property market maturing and developing further away from being an unstable emerging entity, as it was a number of years ago to being a strong investment opportunity today.

When property first became available for sale to foreign buyers many were sceptical about whether or not anyone would take up the tentative offer of homes for sale to overseas buyers in an emirate where there was little employment opportunity and even less lifestyle attraction. However, as is always the case in Dubai this stalemate situation did not last for very long!

It’s hard to say whether property investors spotted the opportunity first or international businesses realized the attraction of operating within Dubai’s tax free trade zones first - but one thing is for certain, Dubai experienced a frenzy of inward migration of professional (read ‘affluent’) foreign citizens and a surge in foreign direct investment and business commitment to Dubai.

This activity resulted in a hot property market opportunity and soon a construction and buying frenzy ensued. People were buying apartments and villas off plan, flipping them two months later before ground had even been broken on the overall project, these second buyers were then re-flipping them when the first phases of construction were over and third buyers were flipping them on completion and for a short, honeymoon period the whole world seemed to believe that Dubai had a unique property market where demand would always outstrip supply and where prices could rise unrestrained and unrestricted forever.

Of course, at some point the laws of economics actually have to kick in and it’s around about now that they are starting to affect the Dubai property market. Dubai real estate is no longer the ‘cheap’ commodity it was three or four years ago, demand for properties for sale has stabilised, constructors are no longer selling out of property stock before they break ground or even before an entire site is developed and as a result investors keen to tap off plan markets for short term capital appreciation are less likely to be buying property in Dubai.

This has had the effect of removing a layer of speculation from the market which has resulted in a more mature market developing where profits are returned from rental yields and longer term capital growth of completed real estate stock and such a stable market helps underpin the successful Dubai economy.

Those now concerned that some sort of bubble has burst and that Dubai property no longer represents any sort of decent investment opportunity need not worry, basically the reason why Dubai’s property market will continue to be a great place to invest for medium to long term growth and profitability is because demand will continue to exist in the emirate from professional expatriate workers and their families and their demand will result in more people seeking rental stock or taking out mortgages to buy property.