A crowd of at least 120 people queued up outside Nakheel's Dubai sales office, some through the night, to get their hands on one of 360 new villas the developer is building.
Nakheel staff handed out bottles of water to the crowds of people standing in the heat, many of whom were paid a couple of hundred dirhams by investors to keep their places in the line.
Despite the heat and the long queue, the atmosphere was calm and orderly as potential buyers waited to try to purchase one of the Dh4 million and Dh5m four and five-bedroom villas set to be developed at Nakheel's 3.5 square kilometre Jumeirah Park scheme in Dubai over the next three years.
"Without doubt we are seeing a recovery across all Nakheel schemes," said Ali Rashid Lootah, the Nakheel chairman. "The market is strongly recovering. Prices are improving; volumes are improving but we haven't really quantified the figures. But I can tell you it's much better than previous years.We are launching new projects. We have no supply of properties. All the existing property in the pipeline is already pre-booked."
Local agents said by mid-afternoon all of the prime five-bedroom properties located close to the lake at Jumeirah Park had been sold for about Dh4.7m each and some were being marketed to new purchasers at a 25 per cent premium. However, they reported some villas in the scheme remained available and unsold at the end of the day.
"You have to bear in mind that sellers might well be asking for a 25 per cent premium but that doesn't mean buyers will pay that amount," said Mario Volpi, a sales and leasing manager at Cluttons, an estate agent. "At the end of the day it's like water. It will find its own price."
The scenes at the sales office came just as the property agent Jones Lang LaSalle published its market report for the three months to the end of last month, revealing prices for villas in Dubai rose so rapidly over the period they now cost 14 per cent more than they did in early 2008. It said villa prices in the city rose by 23 per cent over the past 12 months alone as demand began to return to the property sector.
Apartments in the city also rose in value over the year, according to the report, recording a 4 per cent increase in sales values. However, they still cost 18 per cent less than they did during the market peak four years ago.
The report found house prices in Dubai rose by an average of 14 per cent over the 12 months to August this year and rents increased by 7 per cent as the emirate's property market further recovered.
The number of homes in Dubai increased by about 2,000 in the third quarter of this year to reach a total of 349,000.
However, in Abu Dhabi it is a completely different picture.
Average asking prices for homes in the city's investment areas dropped by a further 3 per cent in the quarter, to Dh10,200 per square metre, representing a total fall of 53 per cent from the market peak of Dh21,500 sq metres at the end of 2008.
With up to 6,000 units scheduled for completion in the fourth quarter, the agent said the total stock could reach 208,000 units by the end of the year, although further delays were expected.
But Jones Lang LaSalle said the sales market in Abu Dhabi had shown signs of increased activity in the third quarter with interest primarily from Emirati purchasers.
"Market sentiment is definitely improving and both Dubai and Abu Dhabi remain major drivers in the regional real estate market. But we are continuing to move away from one holistic model," said Alan Robertson, the chief executive of Jones Lang LaSalle, Middle East & North Africa.
"As the market continues to mature we will see more divergence. Well managed, high-quality assets in prime locations will continue to perform while those in secondary locations will need to be ever more creative to attract and retain tenants who now have ever more choice and are moving with their feet to source and find the best deals available.
"In terms of market specifics, it's a very fragmented picture. Dubai is generally ahead of the curve as rents are finally starting to pick up while indicators suggest Abu Dhabi has yet to bottom out."
