Dubai: Dubai's housing market will lose another 10 per cent of its value before its fortunes start to improve, possibly not until 2013, as investor appetite has been curbed by global financial woes, a Reuters poll showed yesterday.

Home prices and rents have already eased nearly 60 per cent from their peak in 2008, according to the median estimate of 10 banks, investment firms and research institutions.

"Although we have witnessed better volumes and a slight increase in prices at a few property transactions, the overall sector is still facing oversupply and lack of volumes/investor interest, which acts as a headwind against price increase," said Harshit Oza of Beltone Financial.

All but one of the 10 respondents said the renewed global economic concerns and Eurozone crisis will further delay recovery of Dubai's property market.

Respondents in the poll saw no chance of a recovery this year. They gave just a 37 per cent of property market recovery in 2012 and a 70 per cent chance in 2013.

Prices in Dubai will fall by another 10 per cent, an average of eight respondents showed.

The findings matched those of a Reuters poll in April which showed that existing supply and additional new units would push Dubai's house prices down by 10 per cent.

Dubai's property market is oversupplied by about 25 per cent, a median of eight respondents showed with two saying the emirate has nearly twice as much supply as it needs.

Two respondent said house prices in Dubai have already reached a bottom. Seven said they expected prices to reach a trough in 2012, while others said 2013. Oversupply in the UAE has forced developers to cancel and delay projects worth $170 billion up to August, a Citigroup report showed.

The UAE, the second largest Arab economy, is likely to grow at 3.8 per cent next year, a Reuters polled showed last month.

Facing challenges

Meanwhile, Abu Dhabi had fared better during the downturn but is now facing challenges as a huge supply of high-end homes are expected to enter the market.

As many as 11,000 units will flood the Abu Dhabi market in the next quarter, a report by property consultants Jones Lang laSalle said this month.

Prices in Abu Dhabi are expected to fall another 14 per cent from here, or 60 per cent from their peak, the median estimate showed.

"Rental prices in Dubai will fall eight per cent in 2011 and five per cent next year, the median forecast showed.

Abu Dhabi rentals are expected to drop 14 per cent this year and 10 per cent in 2012.