DUBAI recently proclaimed its real estate comeback in the only style it knows: grandiose.
A replica of the Taj Mahal, four times bigger than the original in Delhi, a skyscraper with nine swimming pools and a mile-long canal winding its way around office buildings were among the high-profile projects unveiled over the past few weeks.
The plans had been on hold since the financial crisis brought the emirate's property boom to a halt in 2008.
Now Dubai, home to thousands of Irish expatriates and many more Irish investments, is staging a comeback. The eye-catching developments are creating a buzz.
But the reality is that the nascent recovery has been limited to a few areas of Dubai, which suffered a slump that caused property values across the emirate to fall by as much as 65pc; almost the only country in the world to endure a property crash as bad as Ireland's.
About a quarter of Dubai's residential properties are still empty and an additional 25,000 are due to be completed next year as developers fulfil contracts awarded before the crash, Jones Lang LaSalle estimates.
"The market has improved to some extent, but there isn't enough to justify going ahead with all the projects that are now being talked about," said Craig Plumb, head of research for the Middle East at the Chicago-based property broker. "They should be phased over a longer period and should be built in line with demand."
About a third of the office space in Dubai's central business district is unoccupied and the vacancy rate is much higher in other neighbourhoods, Jones Lang LaSalle said. About 900,000 square meters will be added in 2013, according to the firm. That's 13pc of the existing space.
Some of the developments announced earlier this month at Cityscape Global, Dubai's biggest annual property conference, were reminiscent of pre-crash projects like Burj Khalifa, the world's tallest tower, and an indoor ski slope at the Mall of the Emirates.
As those projects get a new lease of life, many more sit abandoned in the desert or in the Persian Gulf.
Dubai's Taj Mahal was designed to be part of the Falconcity of Wonders, a 41 million square foot complex of homes, offices, hotels and stores along the Emirates Ring Road that links Dubai to the United Arab Emirates' six other sheikdoms.
That project, featuring attractions including replicas of the Pyramids, the Great Wall of China, the Eiffel Tower and the leaning tower of Pisa, was derailed by the collapse of the real estate market. In all, about $757bn (€584bn) of projects were delayed or aborted in the UAE since the collapse of Lehman Brothers in 2008 sparked the global financial crisis. Citigroup said in a report earlier this month that this is more than the projects that were cancelled in Egypt, Iraq, Kuwait, Saudi Arabia and Qatar combined.
The recent improving demand "isn't sustainable without steady population growth and job creation in addition to a financing pick-up", said Saud Masud, chief executive officer of New York-based investment firm SM Advisory Group. "The over-supply issue will probably not be resolved for perhaps another decade."