Dubai's housing market could be running ahead of reality as the number of deals fell by almost a quarter during the first three months of the year, the top property broker CBRE warned.
The consultancy's caution caps a month marked by the return of speculators to a housing market that is being fuelled by overseas cash buyers.
"There is a modicum of concern that the recent escalation of sales and leasing rates could actually be a little ahead of reality," the report said.
Despite rising prices across most of the market, CBRE notes that sales numbers actually fell quarter on quarter during the first three months of the year.
The number of transactions dropped 24 per cent, while their value fell 17 per cent. That appears to contrast sharply with data released from the Dubai Land Department over the weekend which reported a 63 per cent growth in the value of the transactions over a year.
However, the Land Department data did not reflect quarter on quarter changes.
The release cited Sultan bin Mejren, the director general of the Land Department predicting that "investors would be encouraged to increase their spending in Dubai".
The CBRE figures may give pause to investors hoping to surf a tide of incoming money into Dubai property that has been boosted by political instability and conflict in some other Middle East countries such as Egypt and Syria.
Dubai's property market has staged a dramatic comeback over the last year after prices fell by more than half in the wake of the 2008-2009 financial crisis.
But the return of queues outside developers' sales launches in recent months has triggered concerns that values have been rising too fast and drawn comparisons to 2008 when house prices recorded double digit gains from quarter to quarter.
Police were called to the sales office of Emaar Properties this month after the launch of its Mira townhouses development was mobbed by buyers, some of whom had queued for days.
Some of the units were being advertised for sale the following day on the dubizzle website with premiums of more than 30 per cent.
The developer reverted to an online system of registration for its next sales launch after an investor backlash.
CBRE said that established residential locations, such as Dubai Marina, Emirates Living, Palm Jumeirah and Downtown Dubai, dominated sales during the first three months of the year.
The highest number of transactions were registered in Dubai Marina, with sales comprising 25 per cent of the total share.
The city's established locations remain popular with expatriates, the report said.
Two-bedroom units in such locations command rents 27 per cent higher than a year earlier on average, with the biggest jump recorded in The Greens, where rents are 40 per cent higher than a year ago.