Dubai apartment and villa prices are still falling, according to local real estate agents.
The market has switched from buyers looking for luxury homes to affordable housing, says property firm Asteco.
Apartment prices slumped by 25 in the first three months of this year, while the cost of a villa is down 3%.
The number of sales year-on-year has plummeted, by 12% for apartments and 35% for villas.
Buyers are seeking value for money rather than prestige homes, forcing sellers to adjust their expectations.
The firm explained demand was strong for cheaper properties with 2,000 affordable homes changing hands.
The most popular neighbourhoods were Dubai Marina and Downtown Dubai.
The focus on affordable housing has encouraged more investors into the market and the government and developer have changed tack to plan less expensive housing. Around 100 hectares of development land have been set aside for more affordable housing projects.
New developments are aimed at buyers earning between £500 and £1,800 a month.
More homes have come on to the market during the first quarter of the year, including a thousand three and four-bedroom houses at Zahra and Hayat in the new Town Square.
However, demand has been poor with a three-bedroomed house commanding a £177,000 price tag.
Around 800 apartments have also been released by developers.
“Development is starting to pick up in areas away from the city centre and coast,” said a spokesman for the firm. “These homes are more affordable and are attracting interest from many more buyers. Developers are now targeting less wealthy buyers.
“Affordable homes are more appealing to buyers than luxury apartments or villas.
“Another big shift is in the nationality of buyers. The number of Russians and buyers from states that made up the former USSR has noticeably dropped away as their economies worsen and disposable incomes shrink.”
The spokesman explained that most buy to let investors are from within the Gulf State nations rather than from outside the region.
Rents have remained static as most tenants have elected to stay in their homes rather than move, says the firm.
“Part of the problem in the housing market has been the number of new properties coming to market at a time when demand is low, so sellers determined to move have had to rethink their pricing,” said the spokesman.
“The number of homes available has also kept rent rises down as tenants have more choice.”