Dubai's recovery in rents and prices raises the question of what developers have learnt from the collapse of 2008. Will they deliver what they promise this time?
As property booms, a bust is remembered
The rebounding Dubai property market made headlines around the world last week, helped by the triple whammy of rising prices, queuing investors and a Taj Mahal.
But who were the people in the queues? And why did that Taj Mahal project sound familiar? And how much exactly have property prices and rents risen?
After four years hype has returned to the property market as if 2008 was just a bump in the boom. Old projects were trotted out at the annual Cityscape exhibition and developers became brave enough to start bragging again. But analysts urge caution.
"They were queuing to get in, which was refreshing to see as long people don't get too carried away," says Nicholas Maclean, the regional managing director of CBRE and a veteran of the Dubai property market.
He points out that a recovery in prices and rents remains confined to specific parts of the market such as high-quality and well-located offices and villas.
The halls of Cityscape, replete with beautifully manicured models of projects of the future represent one perspective on the property market.
Another can be seen by driving down the nearby Al Khail Road on the city's periphery, where many of the half-built monuments of the last boom are located. From Sports City to Jumeirah Village Circle, skeletal concrete structures abound that were once intended to be luxury condominiums and five-star hotels.
Lacking landscaping, services or many of the amenities promised at their launch, they present a very different picture to the verdant images used to sell them.
The question now is not whether the boom times are back. What investors really want to know is whether developers have learnt from their mistakes.
Will they first deliver what they promised before promising to deliver more?
The biggest news story out of Dubai last week in terms of column inches was a plan to build a modern-day Taj Mahal at the Falcon City of Wonders project. It was covered by the BBC, CNN and newspapers worldwide.
But this was not strictly speaking a news story. This Taj Mahal plan is in fact more than six years old. This context did not figure in the extensive media coverage it received.
Ironically, the Falcon City Taj Mahal project received less media coverage the first time around.
But that was when it competed for attention with even bigger headline-grabbers such as Chess City (a plan to build 32 skyscrapers formed in the shape of chess pieces) or the US$245 million (Dh900m) Lemnos project (billed as a "high luxury world" dedicated to women).
Falcon City of Wonders is just one of many Dubailand projects launched in the first half of the last decade that have yet to be built.
A Dubailand statement from April 2005 said the first phase of the project would be ready by 2007. It has been a regular exhibitor at shows such as Cityscape over the past seven years and had been almost forgotten about until last week when it found itself an unexpected poster boy for Dubai's property rebound.
Projects such as Falcon City were conceived at a time when developers were not convinced that investors would want to buy property in the middle of the desert without some kind of dazzling attraction - such as a revolving ski slope, the world's largest Ferris wheel or any number of theme parks.
But what developers like Emaar have proved is that people prefer living in communities to theme parks.
It is not an accident that the most popular and best-performing villas in Dubai are located in such developments as Arabian Ranches and The Lakes.
It is because they have been landscaped and finished to a high specification relative to the rest of the market. These projects have cracked how to sell lifestyle and have largely delivered it without log flumes or big dippers.
What the last bubble taught us is that the launch of multibillion-dollar projects counts for nothing unless there is real money behind them. So the relaunch of old schemes is not evidence of a recovery - it is evidence instead of developers seeking to capitalise on improving sentiment.
That just leaves us to consider the data - and even that may not be exactly what it seems. A 14 per cent rise in the price of Dubai villas in the year to August cited by Jones Lang LaSalle last week undoubtedly points to a rebound.
But it should be noted that the index that produced this figure is based on a combination of asking and selling prices that can vary hugely in what is still an illiquid market.
Villa rent gains of 7 per cent mentioned in the same report and over the same period are based entirely on asking prices. Landlords will be encouraged to increase asking rents if they feel the market is rebounding. But we don't know definitively if they are achieving these rents.
"Landlords will chance their arms but there is still a hell of a lot of supply to get through," says Mr Maclean.
Prices are rising indisputably for well-located developments in Dubai. There is at least consensus here.
But with an additional 50,000 homes scheduled to be delivered in the emirate over the next two years alone, nobody needs to be queuing.