Now is an opportune time to look back at the market of last year and analyse the key stats, trends and changes that drove the behaviour of buyers and sellers. And the economic factors and attitudes of owners/landlords that could influence the market this year.

In 2013, we saw prices and rents rises reminiscent of pre-2008, and this trend of increasing demands continued during the first half of 2014. However, with rising fears of an imminent bubble, a marked slowing down occurred around the middle of the year, followed by a summer that saw transaction numbers virtually grind to a halt.

This trend continued into the autumn with only a partial recovery towards the end of the year.

Nevertheless, Dubai still enjoyed property price and rental value increases of 15- 20 per cent over the 12-month period, figures unmatched by virtually any other global property and the envy of most countries across Europe. It is a mark of the attitude of many property owners, prospective buyers and industry commentators that many in the region felt that these figures were even seen as disappointing and led to forecasts of an imminent bubble ahead.

In actual fact, this inevitable decline and cooling down in property value growth coupled with a stalling of increasing rental prices, was simply a function of a number of factors:

• A major shift in sentiment from bullish, speculative frenzy to a more considered and cautious view.

• A justified and welcome adjustment following the unsustainable price rises of 2013 and in particular the premature and nonsensical hype surrounding Expo 2020.

• Buyers and tenants simply refusing or unable to justify paying the prices being asked and then renting in more affordable areas.

• The correct — and welcome — introduction of governmental and financial institutional regulations to protect consumers and curb unscrupulous developers and landlords. This discouraged the damaging ‘flipping mentality’ that had prevailed over the past 18 months, and led to falsely inflated prices as well as people getting into debt and potential negative equity.

In short, these have led to what is now a much more viable to consider investing in, a landscape that represents a far more stable property scenario.

However, caution should be exercised, as some of the welcome trends seen over the latter part of 2014 are threatened by a number of fundamental macro and micro economic factors. On the macro side the threat of continuing falls in oil prices should not be ignored in a region that geographically and historically is greatly influenced by this dynamic.

Also as a region that has seen significant investment and wealth coming from Russian nationals over recent years, the effect of events of the past six months cannot be underestimated. Developments in Russia have led to a 50 per cent reduction in monies being spent and invested in Dubai over the past six months.

If this trend continues, this can only have a negative effect on Dubai property market.

On the micro side, it is estimated that there will be a 3 per cent per annum increase in new property projects over this year and the next two. This will not be matched by increases in the population at the mid- to high-end salary bracket, which is likely to lead to a supply/demand imbalance and likely to adversely upset the market.

These factors need to be recognised and acted on accordingly. A sensible attitude needs to be exercised by sellers, developers and landlords alike in order to ensure vibrant market activity and realistic prices that result in value for money for both potential buyers and renters. Many property and rental prices are still up at 2014 first-quarter levels, which are too high and will simply quell enthusiasm for transactions.

Unless these attitudes are adopted, Dubai will continue to be perceived as an immature and emerging market that has not learnt from its lessons and does not comply with the typical economic fundamentals seen in established markets.

These markets include the UK, US and Australia and some parts of Europe, where cities such as London, Manchester, Melbourne, Brisbane, Chicago and Miami have all seen steady growth and rental increases that is forecast to continue over the coming two to three years and possibly beyond.

These cities are, in the main, bastions for steady, sustainable and predictable growth where common market dynamics prevail. Dubai needs to observe the behaviour and response to basic economic fundamentals and look to adopt those if it wishes to attain a position as a safe secure and sustainable property market to invest in.

— The writer is the regional head at IP Global, a specialist real estate advisory.