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Investors are returning to the Dubai property market in the early stages of recovery.

Agents say investors are again purchasing Dubai property off-plan to sell at profit with Dubai property prices rising in some locations in the emirate. A Reidin index of villa prices based on both advertised and actual sales prices gained 1.5 per cent during September 2012 and by some 15.4 per cent when compared to 2011.

According to Reidin, which bases its Dubai Property index 50 per cent on data it’s received from the Dubai Land Department and 50 per cent on property listings, villas in Dubai showed the biggest price increases, registering a massive 22.9 per cent yearly rise.

Dubai property purchasers helped apartment sales during the 2012 to rise 5.7 per cent over the year.

Large apartments, measuring between 101 and 150 square meters, often favoured by Dubai property investors, saw the highest rises. Flats which measured between 51 and 100 square meters rose in value by an average of 1.93 per cent during September, while those of 50 square meters or less rose in value by an average of 1.57 per cent.

A few months ago there was little Dubai property being flipped. Now agents are starting to notice Dubai property speculators buying properties at one price and immediately selling them again, making Dh50,000 to Dh100,000 plus on a studio or a one bedroom flat - more on bigger Dubai properties according to one agent.

Other Dubai property brokers highlighted demand for Emaar's latest launch which saw investors queuing to pay deposits.

"We have known of people flipping off plan Dubai property such as the recently sold Emaar serviced apartments for a premium of around 7 per cent to 10 per cent," said Jackie Johns, managing partner at Dubai Luxury Homes. "And for existing Dubai property we are seeing people selling after relatively short periods of time - often between six months and a year - to make a profit. We had one client who bought in Victory Heights by the golf course who made 25 per cent on his investment in one year. That's the sort of thing we haven't seen in a long time."

During the height of the market in 2008 Dubai Property investors bought and sold off-plan properties in Dubai at frenetic pace, often holding them for just weeks before selling them on to other eager Dubai Property investors. The practice helped drive prices up by more than 40 per cent in the first quarter of that year alone

"Until just a few weeks ago the off plan market in Dubai property was dead," said Ryan Mahoney, chief executive officer at Dubai-based Better Homes.

"We've been amazed at how quickly across the market that attitude has changed. Now we are seeing some people making 30 per cent gains over a three-month period by buying and selling off plan Dubai property again."

Rents in Dubai are also rising according to Reidin, gaining 0.39 per cent during September and equating to 5.59 per cent over the year.

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