A $95bn (£61bn) "new city" is one of many developments selling in Dubai
By Christian Fraser
BBC News, Dubai
Far from the doom and gloom of international financial markets, investors and property developers in Dubai are still doing a brisk business.
On the trading floors of the world's financial markets, October has been a month to hide in the cupboard - credit has dried up, mortgages are hard to come by, and property markets in the West are stagnant.
Yet in the glittering downtown of Dubai, investors are optimistic - not as brave as they once were, but confident the emirate is still the place to shelter their money.
Twenty years ago Dubai was a sparsely populated desert coastline. Today, in the glitzy Emirates mall, retail space is selling at the equivalent of central London prices.
Marianna, a Russian expat who works as a sales rep for one of Dubai's myriad property companies, says prices are holding up. She shows me the investment plan for one of the latest sky-rise blocks in Sports City.
"This is the average price: $800,000 (£518,000). Down payment 15%, and then 10% every three months. Completion 2010. Returns on your investment - around 30% in the first three years."
I don't know if we would be so keen to jump into the market today
Nicky British expat
If it looks too good to be true, then it usually is - so goes the first rule of investment. But in Dubai, those who ignored that rule are now sitting pretty.
In some developments, prices have jumped 80% in less than a year. Most flats have been sold on two or three times before foundations have even been laid.
British expats Neal and Nicky bought a one-bedroom "premium" apartment, off plan, on the Palm - the man-made island on the Jumeirah coastline where some England footballers were given villas.
They are still waiting to move in but what Neal and Nicky have found, the hard way, is that Dubai's property market is not for the faint-hearted.
They were burnt when the seller of the property they were buying pulled out just days before completion. By the time they got back in, prices had rocketed.
"We've had to reduce from a two-bedroom apartment with maids' quarters, to a one-bedroom apartment that is much smaller," said Nicky. "Prices have gone up so fast."
"I don't know if we would be so keen to jump into the market today. I think we would wait to see if the prices come down. Getting a mortgage is much more difficult now, and if we hadn't bought at that moment we did, we wouldn't be buying."
That nervousness is reflected by the markets, with Morgan Stanley predicting property prices will fall by 10%.
In the past month, millions of dollars have been wiped off the value of the stock exchange, though it did recover this week with news of enormous profits from Emaar, one of the high value property developers.
Dubai doesn't have the oil wealth of neighbouring Abu Dhabi. It has had to rely on credit to expand, so much so that government-controlled companies now owe more than $47bn (£29bn).
Burj Dubai, the world's tallest man-made structure, is still growing
Anil Bhoyrul, editorial director at ITP magazines says the freeze on the world credit markets could leave some developments high and dry.
"Four, five years ago when this started, every developer around the world piled in," he said. "But now some of them have disappeared. There are certainly a percentage of these buildings that have just stopped and they are not going to go any higher."
But unbridled confidence seems to remain here, reflected in the glass panels of the Burj Dubai, the world's tallest tower, now the centrepiece of the city's most prestigious urban development.
And the reason they are so confident is that local rulers with their enormous wealth can determine where this market goes and how fast.
"The number of international companies coming to set up here will undoubtedly fall over the next six months," said Nick McLean, property consultant with CB Richard Ellis.
"But the economy here is incredibly well-managed and if it's noticeable that the demand for accommodation is about to decline, then I suspect the delivery of property will decline to match it."
Secret of success
One of the other reasons why property companies have seen such returns, and have built at such a rate, can be found on the outskirts of the city.
Asian manual labourers live in deplorable conditions
In camps on the edge of the desert live the Bangladeshis, the Pakistanis, the Indians and Sri Lankans who build Dubai.
"We share eight people to a room," said Muhammad from Bangalore. "Our basic salary is 400 dirhams ($110, £70) a month. Everyone here is paid low, low salaries.
"I don't like it very much, but what can I do. I paid an agent almost a year's salary to come here. And I have to support my family back at home."
Built by cheap Asian labour, marketed by Europeans and bankrolled by Gulf oil money, that's part of the winning formula of Dubai's property market.
The mood is one of caution. There will be a correction in the market but it's likely to be a much softer landing for Dubai than the one expected in the West.
It still exudes an unwavering confidence and stands by the slogan that has served it well until now: "Build it and they will come!"
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