Investing in Dubai’s real estate market has not been for the faint-hearted since freehold sales to expatriates began in 2002.

Over the past 12 years, there have been spectacular gains as investors flocked to the emirate to buy units in projects before late 2008, and dramatic falls as the global financial crisis forced billions of dollars-worth of schemes to fall by the wayside, taking off-plan buyers’ deposits with them.

Since 2011, the market has slowly recovered and in 2013, prices grew by more than 20 per cent as they approached the highs seen in 2008. Responding to concerns that the growth was unsustainable and another crash was inevitable, the UAE central bank moved to slow demand by introducing new regulations in late 2013 that capped mortgages. Fast forward to 2014 and those measures appear to be working.

Speculators have left the market and, as a result, demand and prices have cooled. Prices are now growing at 2-3 per cent a quarter, and in some market segments such as luxury villas, transactions are down by more than 40 per cent this year.

While these statistics may initially bring back painful memories of the 2008 crash, they are an important step in the evolution of the emirate’s property market. Previously, a new market with large risks and rewards, Dubai now has a mature property sector that offers returns over a longer period of time.

Mature markets attract a different class of buyer and developers will be hoping that more conservative investors looking for long-term investments will replace the speculators of yesteryear.

As that transition is made, the nature of Dubai’s real estate projects will also have to change: less spectacular returns means less scope for spectacular projects.