Dubai developers are pressing ahead with their construction plans despite expectations that property prices will fall yet further this year, undaunted by memories of a 2008 crash.
Industry consultants say that while sales volumes have slumped in the emirate, structural changes to the market such as tighter regulations together with fewer speculators and developers should ensure a much softer landing this time.
But others worry about ripple effects from the dive in oil prices, even though Dubai is a small crude producer compared with fellow emirate Abu Dhabi, and wonder how all the projects that are being announced will be funded.
Dubai property prices have been more volatile in the past decade than in other centres.
Residential prices in the emirate fell 50 percent from a third-quarter 2008 peak to mid-2009, suffering a second downturn in early 2010, industry consultants Cluttons estimate.
Prices then rebounded from 2011 following an influx of money and people displaced by uprisings in several Arab countries, recovering to within 18 percent of 2008 peaks.
But values slipped again from late 2014. Cluttons reckons they fell 3-5 percent in 2015 and forecasts a similar drop this year; rivals CBRE say prices declined about 15 percent last year and predict another 10 percent drop in 2016.
This seems to have swayed developers little.
Emaar Properties says it will not change its plans despite sales revenue falling 28 percent to 7.51 billion dirhams ($2.04 billion) in the first nine months of 2015.
"Emaar is progressing as scheduled with all its projects launched," said a spokesman for Emaar, builder of the world's tallest tower, the Burj Khalifa.
The company, one of four big players in the Dubai market, has a backlog of projects worth 24.1 billion dirhams in the wider United Arab Emirates.
"Sales enquiries have continued to be robust, led by strong interest from regional and international investors," said the spokesman.
Property markets can be driven as much by sentiment as supply and demand, so such overt bullishness is perhaps understandable. However, it ignores a 19 percent decline in Dubai unit sales and a 24 percent drop in the combined sales value in 2015, CBRE estimates.
It also echoes 2008 when that October the developer Nakheel announced plans to build a kilometre-high tower, which at almost 200 metres more than the Burj Khalifa would be a global record.
Barely a year later, Nakheel sought to restructure about $11 billion in borrowings and property prices were in free fall. Today a Dubai metro station is named after the lofty project, but the tower has yet to materialise.
Dubai has doubled property transaction fees and imposed tougher deposit requirements for mortgage borrowers. While this has helped to prompt the current downtrend, inflicting such short-term pain may ultimately lessen volatility by minimising speculative trading.
This marks a significant change from 2008. "The dynamics of the market this time around are vastly different ... The fundamentals are a lot stronger," said Faisal Durrani, partner and head of research at Cluttons.
DAMAC Properties, Dubai's largest independent developer, also says it has not slowed construction as there is demand waiting to be met.
"There will continue to be an under-supply of completed units in the market; based on Dubai's economic growth, demand should outstrip supply," said a DAMAC spokesman. "It's very much business as usual."
Dubai officials have remained optimistic on economic growth in the emirate which has diversified into areas such as tourism more than larger oil exporters. In December, a government official estimated 2015 growth at around four percent, close to levels of recent years.
However, the UAE has said it will be hard to achieve growth of more than three percent across the emirates this year.
The spectre of over-supply still haunts the property market after the crash, which was partly due to an abundance of units being completed almost at the same time.
To avoid a repeat, developers are widely thought to delay handing over units when they are completed, although of course this means they get no money from them until a sale goes ahead.
Over the last five years only about 35 percent of residential units slated for handover in a given year were delivered to buyers, consultants JLL estimates, with sales delayed until subsequent years.
Oil is thought to constitute only about 4-5 percent of Dubai's economy, but the effect of the crude price slump will be greater than this figure implies.
"There's a ripple effect (into) office demand, the amount of trade hotels get, business activity, amount of flights, retail spend," said Alan Robertson, JLL's MENA chief executive.
Lower oil receipts have tightened liquidity. Government deposits in the UAE banking system fell by 56 billion dirhams in the 12 months to September 2015, National Bank of Abu Dhabi reported.
"This will have a direct impact on the mortgage market, which is already very restrictive," said Clutton's Durrani.
Project funding is likely to be a problem this year.
"There are a lot of new projects being announced but where are they all going to get the money from?" said Craig Plumb, JLL MENA Head of Research.
Of the four developers that dominate in Dubai, three - Emaar, Nakheel and Dubai Properties - are ultimately state-controlled, making it easier to coordinate supply.
Currency fluctuations are another factor. Foreigners accounted for four-fifths of the combined value of Dubai property purchases in 2015, CBRE says, with Indians, Britons and Pakistanis among the biggest non-Emirati buyers.
The dollar, against which the UAE dirham is pegged, has gained about a fifth versus the euro and sterling since mid-2014. The Indian rupee has likewise lost ground.
This has made Dubai property more expensive for potential buyers with money in those currencies, but has also offset the drop in values for existing owners from those currency zones.
"People who really want to sell are willing to accept considerably lower prices," said Alexander von Sayn-Wittgenstein, sales director at luxury property broker Luxhabitat.
"The official price may be the same but when a buyer makes an offer that is much lower, the seller is more flexible and will likely accept a price they wouldn't have a year ago."
Gulf property markets have generally weakened although Dubai is most volatile because it has made the biggest gains.
"The underlying factors are broadly the same - such as oil prices, lower state spending and the need for governments to raise taxes which will add to inflationary pressures," said JLL's Plumb.
Most analysts predict Dubai's hosting of the Expo 2020 exhibition will help the residential market bottom out over the next 12 months. Demographic trends are also favourable, with the city's population forecast to double to 5 million by 2030.
If correct, this will help construction. "We (would) need another city the size of current Dubai," said Durrani. "This suggests that Dubai's development story still has a long way to go."For all the latest real estate news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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