Fears are growing that Dubai's once-buoyant property market will be hit by the global liquidity crisis, as lenders in the oil-rich region become more cautious and a $13.6bn (£7.39bn) cash injection by the Central Bank of the United Arab Emirates failed to ease worries of a housing market slowdown.

The Gulf's property boom has succumbed to a reality check, according to analysts. Richard Rodriguez, the former chief executive of Emaar Properties in Dubai, said last week: 'Either the pace will drop or the prices will. Both cannot be sustained in these market conditions.'

Most analysts agree that the slowdown will be gradual. Global market turmoil and negative sentiment will dent property demand in Dubai and in neighbouring, oil-rich Abu Dhabi, Credit Suisse said. Morgan Stanley has predicted a correction of at least 10% by 2010. 'The economic turmoil could make that worse. There's a risk of contagion if Dubai slows,' Sean Gardiner, head of MENA research at Morgan Stanley, said.

The Times