[Flyerman]

Very interesting discussion, I am surprised its not easier to work out what the supply of units will be for next year. Does anyone have a more accurate guesstimate?

My view is that there has been so much investment from investors, the rental supply will be substantial for some time. It should be just a question of what is the demand, and this is where things are getting harder to predict.

There are few doubts business activity is very high in UAE, and this is drawing in newcomers. Indeed, the business slow down / recession elsewhere will make more people look at UAE as a place to work and live. However, my main issue are the salaries paid and the number of people who can afford the rent of expensive properties. Ultimately goods and services from the region must be priced competitively, and salaries are regulated by these market constraints.

Overall there may be a slightly unrealistic expectation as to what level of rental tenants will be able to pay in the future. There will be a limit on the umber of highly paid expat bankers.. or maybe not.

As for oil price going up, I think it will go down to $70. We have seen that demand of oil is not inelastic and consumption drops with prices rises. Take out some speculation, a probable supply increase and price could end up lower than $70. Prices above $20 make it profitable to extract now and there's plenty still down there.

I dont think UAE is immune from the forces of supply and demand and for example, I think certainly when it comes to tourism, other places offer lower prices for similar thing.

A price correction downwards in light of recent events would seem to be a logical conclusion as I expect rate of new apartment sales to slow and therefore new prices to adjust with this lower demand.

However, Dubai often surprises.