Dubai property prices set for further fall

Dubai house prices, already nearly 60 per cent off their peak, are set to drop another 10 per cent over the next two years as new units are released onto a market awash with supply, a Reuters poll shows.

A property boom in Dubai collapsed at the end of 2008 when it was hit by the global financial crisis and the Gulf state's debt crisis.

Residential property prices in the Gulf state, home to the world's tallest building which has 900 residences, have plunged 58 per cent from their peak in the fourth quarter of 2008, according to the median estimate of 15 banks, investment firms and research institutions.

Prices in Dubai and Abu Dhabi will fall 5 per cent and 10 per cent respectively in 2011, according to the poll, which was taken over the past week. The decline will continue in 2012 with prices in Dubai falling 4pc and in Abu Dhabi by 5pc, according to median forecasts.