Dubai homes prices are expected to fall further in 2011 due to a high supply of properties, despite the fact that there is already a glut of residential units on the market.
Dubai property prices have plummeted since the market crashed two years ago, including a 5.1 per cent fall in the fourth quarter of 2010.
UK-based property agents Cluttons LLP believes that more property price falls are unavoidable because of an increase in housing supply, despite low demand.
Cluttons expects 35,000 properties in Dubai to be completed within the next two years.
Weak market conditions are making homes in some of Dubai's most desirable locations far more affordable, the broker said.
"The credit crisis squeezed speculators out of the market and forced banks to lend less" said Ahmed Badr, an analyst at Credit Suisse Group AG, told the press.
Most homebuyers in Dubai have budgets of around £250,000 and only about 6 per cent of them would even consider properties exceeding that amount, Cluttons added.
Average villa prices fell 5.1 per cent, while apartment values dropped 2.4 per cent in the fourth quarter from the third.
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