Dubai is predicted to be among the world's strongest performing property markets next year, according to new research.
Knight Frank, the international property broker, puts the emirate behind Moscow and Miami to claim third spot in the rankings of 14 cities worldwide.
That would be a remarkable reversal of fortunes for a market in which house prices lost more than half their value following the 2008 property collapse.
Knight Frank expects prices in the Dubai luxury villa market to rise by 5 to 10 per cent and said Emirates Hills and The Palm would be the markets to watch.
"The volume of inquiries from professionals relocating from the UK and Asia is rising, while the supply of high quality family homes is largely static," said Kate Everett-Allen, an international residential research coordinator at the broker. Overall prime residential prices across the cities are predicted to rise by 2.5 per cent on average.
Knight Frank expects prices to fall in just three of the 14 cities surveyed - Paris, Geneva and Shanghai.
While fears of a sharp contraction in the global economy are expected to dent some property markets it could strengthen others as investors seek out safe haven investments in bricks and mortar.
"Between 2006 and 2011 the number of centa-millionaires - those with disposable assets of more than US$100 million [Dh367.3m] - increased by 29 per cent globally," said Ms Everett-Allen. "Cross-border investment flows have risen significantly as high net worth individuals in emerging markets have looked beyond their national boundaries for double-digit annual returns. Dubai is the location of choice for an increasing number of Indian and Iranian investors."
This week CBRE published its report into the Dubai property market which found that average house prices in established locations rose by 13 per cent over the past 12 months while those in The Greens and Downtown Dubai rose by 20 per cent year on year. "We see no reason why house prices in these areas should not increase by a similar amount next year," said Matthew Green, the head of research and consultancy UAE for CBRE Middle East.
But other Dubai agents urged caution. "These figures are fine as far as they go," said Richard Paul, an associate director at Cluttons in Dubai. "In a comparison with the rest of the world, the Dubai property market will probably be in the top three. But that is mainly a reflection of how housing markets are performing all over the world."