The recently introduced law granting foreign property investors a six month renewable residency visa if they invest a minimum of 1 million dirhams is unlikely to aid a recovery, says the report from EFG Hermes.
Analysts at the Egypt based investment bank described the new law as 'self destructive'. It had expected recent clarifications from the UAE government on home ownership to improve investor sentiment but the new law was unhelpful.
As a result, they are predicting that a market recovery in Dubai could happen as late as the end of 2011, rather than its earlier prediction of the second half of 2010.
Analysts also said property prices in Dubai were continuing to slide and were now down 35% since the start of 2009.
The latest study on the emirate's real estate market added that prices were 40% off their peaks of 2008 while transaction values and volumes were also subdued during April.
The total value of transactions amounted to AED31.8 billion during the first quarter of 2009, compared to AED73.4 billion in the fourth quarter of 2008 and AED110 billion in Q3 when the property market was at its peak.
This represents a 72% drop off in market activity from the highs of the previous year, EFG Hermes added.
And analysts forecast that the slump in Dubai house prices would continue until they fell up to 60% from their 2008 highs.
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Residency in Dubai - New Laws Proposed
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Working Overseas - UAE job market to benefit from rapid regional & global growth of services sector
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