Rock bottom is expected in the second half of 2009 although some believe the market will not bottom out until 2010, according to the poll of 10 bank analysts, investment firms and research institutions by Reuters.
Half of the analysts expected prices to fall a further 20% or more this year and prices could fall another 15% next year before stabilising in 2011, the poll showed.
'We may see a further drop in prices as the magnitude of the problem in the sector is still high and the recovery of the sector may take some more time,' said Sajeer Babu, an equity analyst at National Bank of Abu Dhabi.
Liquidity problems, job losses and additional supply to the market are expected to delay the recovery in Dubai's property sector.
'We believe a recovery is likely in late 2010 or early 2011 based on a series of factors which include a decline in demand for buying property,' said Sana Kapadia, Vice President, equity research at EFG-Hermes in Dubai.
'Our view is that lower or potentially negative population growth is likely to put a strain on demand,' she added, saying that more clarity regarding the legal framework for property ownership and greater confidence were also needed.
The outlook for property rents is equally gloomy. Three of the analysts said rents in Dubai could fall as much as 50% during 2009.
Meanwhile, Abu Dhabi, the UAE capital and home to most of the country's oil, is not immune. House prices there are expected to fall 25% on average for the full year, with two out of eight analysts saying prices would slump as much as 45%. Prices would remain flat in 2010 and pick up in 2011, the poll showed.
