DUBAI // Property prices are heading back to the level seen at the peak of the property boom in the summer of 2008, according to estate agent Cluttons.
"Prices now are probably at early 2008 levels," said Mario Volpi, head of residential sales and leasing at the company's Dubai office.
"There's still a way to go because prices went up quite a bit in the late spring of 2008. In summer it quietened down as it normally does and then we had Ramadan, and then it all collapsed around October to November," said Mr Volpi. "If prices carry on rising the way they are, they will return to peak-2008 levels. We are not far away but there's still a little way to go."
Jones Lang Lasalle also said residential property prices in Dubai are at rates similar to those in early 2008.
Mr Volpi said that apartment prices across Dubai overall had risen by 5 per cent in the last quarter, while villa prices had gone up 20 per cent over the past year.
"I would say the market is very positive for sellers because we have now seen some good price rises in terms of established communities where they have infrastructure such as pools, gyms and facilities," he said. "These include Downtown, the Marina and Jumeirah Beach Residence. Jumeirah Lake Towers is coming up very well, as is Arabian Ranches and the Palm.
"But we've also seen price rises in areas that perhaps were less requested in the past, like International City and Discovery Gardens. Areas like that have also now ... turned the corner. At the lowest ebb I think if you had a decent credit card you could have put an International City studio on your card, that's how cheap they became. But now they've bounced back," said Mr Volpi.
"From an estate agent's point of view and from a seller's point of view, it's good because we still have a good level of buyers looking to invest. They've seen the market turn the corner and if anything some of them have potentially missed the boat, perhaps they should have bought six months ago."
However, although the market was looking buoyant, he said there was a negative side as some sellers were trying to force up prices.
"We don't want to see a return to the bubble, the boom and the bust and some sellers are being over-optimistic about the prices they can achieve. Whereas before, when offers came in they were relatively quick to accept them, now they're ... digging their heels in.
"Buyers have to be cautious about that, because if they don't pay the right sort of price someone else will come along and take it from under their nose. So the competitive spirit has come back in terms of sales, but sustained recovery is what we agents want."
Mr Volpi said that rents had risen by about 10 per cent year-on-year, but added: "You might have slightly less desirable areas that haven't come up that much and others that maybe have come up 15 or 20 per cent."
One possible cloud on the horizon for the Dubai property market appeared when the Abu Dhabi Executive Council announced that from next September Abu Dhabi Government employees would have to live within the emirate's borders.
At present many residents living in areas like Dubai Marina and Jumeirah Beach Residence commute daily to their government jobs in the capital. However, Mr Volpi said: "This is clearly going to have an effect, but what will soften the blow for a lot of these people is that their rents will come down. Abu Dhabi is 18 months to two years behind Dubai in terms of rent price increases, so that will be a good softener for them.
"If these people are forced to move they will be replaced by the new expats that are coming in, so I don't see Dubai suffering that much."
csimpson@thenational.ae