Dubai's Palm and World projects are iconic developments that have captured the world's imagination.

The reality of oil at close to $90-a-barrel is a tidal wave of cash for the Gulf States, whose oil surplus now exceeds the Chinese export surplus. Dubai real estate prices are low by global big-city yardstick. So will this flood of liquidity now produce a house price spike in Dubai similar to the current stock market bubble seen in Shanghai and Hong Kong?

The global economic outlook for 2008 is darkening with the ongoing US sub-prime lending crisis and the credit crunch. For Dubai real estate the balance is between lower interest rates increasing the affordability of local property versus a business slowdown and an increasing supply of real estate.

There is a growing national consensus that the UAE dirham is 20-30 per cent undervalued against the US dollar, and that the time for a revaluation is approaching, even if the dollar-peg itself stays in place for GCC currencies as Saudi Arabia wants. But what impact would say a 10-15 per cent revaluation have on Dubai property?