Real estate prices in Dubai will continue declining in 2017, with a recovery only starting late next year, according to Cluttons.

Home values in the emirate dropped 7.4% on an annual basis at the end of Q3 2016 and will probably slip another 5% next year, Cluttons head of research Faisal Durrani told local press in Dubai.

Prices have been falling since 2014 and are almost 27% lower than their peak in the third quarter of 2008, he said, adding that property values will only begin to stabilise in the last three months of next year, driven by government spending on projects related to Dubai’s hosting of the World Expo in 2020.

Real estate transactions in the emirate fell almost 30% by value in the first seven months of the year, according to data from the Dubai Land Department, as a slump in oil prices led to an economic slowdown in Gulf countries.

Average villa prices in the emirate were dragged down by properties at the top end of the market, according to a Dubai real estate report by Cluttons. Prices in locations like the Palm Jumeriah, a man-made island, and The Meadows have slumped 11.9% and 11.1% respectively over the past 12 months. Apartment prices fell by 2.5% in the third quarter, the fastest drop since mid-2011, the report stated.