The price plunge, which erased nearly two years’ of gains in property values, was the second consecutive quarterly decline, Colliers International said. Colliers reported an 8 per cent decrease in home prices during the October-December period, the first quarterly decrease since Dubai’s property boom began.

“We will see a further potential decrease in pricing, but it won’t see the same drastic fall that we have seen in the first quarter,” said Colliers Chief Operating Officer John Davis.

Davis said it is too early to tell if Dubai might see a turnaround later this year.

Some industry executives disputed Colliers’ outlook. “I don’t think the prices will go down further, as they have already touched the bottom,” said S. M. Syed Khalil, Executive Director of the Ilyas & Mustafa Galadari Group, a property developer. “By September the market will start getting stabilised.”

Colliers compiled its data from prices in areas of Dubai where foreigners have been allowed to buy property since the real estate market was opened to non-Emiratis in 2002. These areas were largely responsible for Dubai’s real estate boom.

In spite of the recent sharp correction in its property prices, Dubai had the most expensive residential real estate in February of any city surveyed in 34 of the world’s emerging markets, a new industry study showed.

With its home prices averaging around $7,000 per square metre, Dubai ranked first among 59 cities — even after property valuations in the emirate had plunged from their peak late last year, according to the study by REIDIN.com, an online real estate consultancy.

The study found Singapore to be the second most expensive city, followed by Moscow, Hong Kong, Beijing and Tel Aviv.