Dubai real estate is never easy to understand. During the boom years leading up to 2008, property analysts often referred to the emirate’s “wow factor” to explain the unexplainable – why was real estate so attractive?

Today, Dubai’s property market is as difficult to understand as ever. While overall prices are flat this year, prices for high-quality properties in popular locations are creeping up and developers say a new boom could be in the making.

As always in Dubai, the rumour mill is working overtime and there is wide-ranging speculation about why prices are going up. Theories include money laundering, regional investors relocating funds from countries affected by the Arab Uprisings and basic supply and demand.

The developers say their sales are with end-users, which proves the demand is there – and with most of the stalled projects in Dubai now complete, new stock is needed. So far the best-performing sector is villas, which cater for families residing in the emirate.

New projects will breathe life into the economy. Since 2008, the economy has stalled and although Dubai’s reputation as a trading hub helped to prevent a complete collapse, it is not able to deliver the growth so many companies in the region had become accustomed to.

Billions of dollars of capital expenditure on projects will deliver that growth. So far, this has not happened, but the first steps have been taken. Nakheel has awarded some contracts this year and Emaar properties has tendered new work. Although a few other developers, notably the local Al-Fattan Properties and Al-Habtoor Group, have started work on major new projects, others are still struggling to move ahead without funding from off-plan sales.

Over the next six months, Dubai will discover whether investors have the appetite to fund another real estate and construction boom, or just selected projects in established locations. If investors remain cautious, then Dubai will return to being what it always was, a steady market without the “wow”.