Dubai’s property market could take up to ten years to recover according to investment bank UBS, with property prices also likely to drop by up to -30% despite already falling by -50% since their peak in 2008.

Saud Masud, analyst, said: ‘We expect it will take at least a decade for property prices to return to previous peak levels, and see only modest growth in real estate asset prices subsequent to a market trough in 2011.’

According to the report, the Emirate’s population will have decreased by -8% by the end of 2009 and a further -2% in 2010. Almost 50% of the Emirates workforce is employed in real estate and construction, however 70% of the projects are either cancelled or delayed, but despite this there will still be an excess of 30,000 to 40,000 residential housing units coming available by May 2011 in the best case scenario and 90,000 in the worst case.

Masud said: ‘This will be a complex issue as the Emirate redefines itself over the coming years and finds new growth levers outside the property sector, through commerce, education, banking, tourism and healthcare,’

Assuming gross domestic product ( GDP) growth slows to 6% per year from 2011 to 2021, with house prices still growing at the same pace relative to GDP, the report stated that there would be an annual growth of +9% in real estate prices.