Some 100,000 extra people are expected to arrive every year, and they are all going to need somewhere to live. As a result, in contrast to much of central and eastern Europe, rents — for now, at least — are going up rather than down, which means all-important yields are firm at about 8%-9%. Another bonus is that rent is paid upfront here, in some cases for a year in advance.

The time has passed when it was enough to buy any flat off-plan, sit back and count your profits. As the market slows, conventional criteria such as location and quality of property come into play. What is on offer varies widely: those with £1m or so to spend might want to join David Beckham on the Palm Jumeirah, the world’s largest man-made island and self-styled eighth wonder of the world. You could buy a six-bed “Signature Villa” here for £ 1.3m, but these are properties for the flamboyant owner-occupier rather than the fly-to-letter.

The middle market offers houses in the Springs and Meadows developments, popular with expat families. The rooms are generously sized and standards of finish excellent, even though, like most developments here, they seem to be on plots that are just a little bit too small. A three- bedroom, 2,400sq ft Springs house would set you back £140,000. A four-bed, 5,800sq ft mansion in the Meadows is £300,000. For £35,000, you could pick up a 473sq ft studio in the International City, a 21,000-unit complex of “country-themed architecture” featuring a reproduction of Beijing’s Forbidden City together with other buildings in English, French, Russian and Moroccan style.

Set almost six miles back in the desert, it is not quite the stuff of dreams. Although it is still 18 months to two years from completion, prices have gone up 50% since its launch. They should also be easy to let.

Investing in Dubai is not for the faint-hearted. Although properties are advertised as freehold, legislation enshrining it has not yet gone through the federal parliament, leaving buyers in a kind of legal limbo. Authorities seem unlikely to do anything to undermine property rights, but the uncertainty makes some foreign lenders nervous. A more immediate nasty surprise can come from service charges, which have risen sharply at some developments.

And then there is the political risk. Almost all the world’s trouble spots, from Iraq to the West Bank, are uncomfortably close. Within Dubai the atmosphere is relaxed, but last month’s bomb attack on a British theatre in Qatar was a reminder that not everybody in this part of the world is happy with Western values.

The Dubai boom survived the Iraq war, however. And even though a Qatar-style attack may cause a few of the jumpier Western investors to think again, the Saudis and other Middle Eastern buyers who have also been buying enthusiastically have more than enough money to keep things going.

Brian Scudder, communications director for Oryx Real Estate, exudes the optimism so typical of the place. “Dubai has taken over from Hong Kong as the classic post-colonial place to work and play,” he says. “Too much money has been invested in Dubai for things to go wrong and for it not to be able to bat back whatever the region can chuck at it.”

Ultimately, though, anybody buying has to make a simple judgment: is Dubai one of this decade’s great success stories, or is the property market here little more than a giant pyramid scheme or a bubble ready to burst? Maybe it’s a little bit of both.

flytolet@sunday-times.co.uk

Landmark Properties, 00 971 4331 6161, www.landmark-dubai.com

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