Dubai property market suffers as Western cash dries up

Image by Carl Fleischer Photos via Flickr

European investors have mothballed plans to invest in Dubai's bombed-out property in favour of more familiar and mature markets, prolonging the emirate's maiden bust until at least 2011.

Prices in the emirate's once-booming real estate sector will continue to slump over the next year, with demand for property waning as expat professionals lose their jobs, while more Dubai contractors will bid for projects elsewhere.

Once a magnet for capital from European property investors, the emirate's appeal -- famed for its iconic palm tree-shaped islands -- is fading fast as they scramble to seize better real estate deals closer to home and elsewhere in the Gulf.