The slowdown reported in apartment sales in Dubai has not been apparent for villas. Even off-plan villa sales are still going strong, and the re-sale market remains a seller's market. This new dynamic to the market has been developing for some time.

The mismatch between the supply of villas and the latent demand has been apparent for many years. In the early days of the first Dubai Marina apartment sales Emaar Properties noted huge demand for the very small number of villa units at the base of the development. 

This is one reason why Emaar went on to build the 2,000 villa Meadows and 4,000 town-house Springs developments, and then the very successful Arabian Ranches project. The first two schemes sold out long ago, though the release of villas at The Arabian Ranches continues. Nakheel enjoyed similar success with its 6,000 Jumeirah Islands villas. 

Victory Heights - Only last week-end the Victory Heights villas - a 900 villa development in seven villages as a part of the Dubai Sports City - sold 164 villas or 70% of its first phase, with town-houses priced from $350,000 up to six-bedroom villas at $2.2 million. 

Now the Victory Heights is a nice project around an Ernie Els designed golf course called The Dunes, and villas near to golf courses tend to sell at a premium. Emaar has certainly used this to advantage with its projects facing on to the Emirates Golf Club and The Montgomerie, as well as the desert golf course at The Arabian Ranches. 

However, investors are interested in more than an attractive location. For over the past year there has been a realization that villas may well offer the best investment returns in the long-run in Dubai. 

For a start pricing per square foot is generally cheaper for villas than apartments, despite the fact that villas come with a plot of land and a garden. In most cities of the world this factor makes villas more expensive than apartments and not vice-versa. 

Stable villa rental yields - The rental market for villas in Dubai is also well established and given that the supply of villas built in recent years is, if anything, behind the demand curve then the outlook for rental yields on villas should be considered more stable. In short, there is not a massive oversupply of villas about to hit the market whereas the same can not be said for apartments. 

This is one explanation why the re-sale market for villas in Dubai is currently strong, with properties not remaining on the market very long, while re-sales of off-plan apartments in a number of projects is difficult. 

So it looks as though two different property markets now exist in Dubai: villas and apartments; although to be fair completed apartments in The Greens, for example, are still in demand, and the off-plan apartment market is where the main problems exist.