Dubai House Prices Plunge 47% as Speculators Flee

House prices in Dubai plummeted 47 percent in the second quarter from a year earlier, the steepest drop of any market, according to Knight Frank LLC, as speculators left the Persian Gulf business hub.

On a quarterly basis, prices in the sheikhdom fell 7.5 percent, less than the 41 percent decline three months earlier, the London-based property broker said in an e-mailed statement today. Dubai’s annual drop accelerated from a 32 percent fall in the first quarter.

Dubai property values erased most of last year’s 59 percent gain in the first half as the market caught up with declines elsewhere in the global housing slump triggered by the financial crisis. Prices had ballooned in a debt-fueled construction boom as the sheikhdom transforms itself into a regional center for financial services and tourism.

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