The UAE could be preparing to bail out property companies in Dubai and might restrict new supply amid a downturn in property prices, EFG-Hermes said.

'It is interesting that the government has yet to announce any bailout plans for the real estate sector, though we are inclined to believe that a federal plan is in the pipeline,' the Egyptian investment bank said in a research note.

While EFG-Hermes’ own property index showed advertised prices in Dubai had fallen around 8% in the last few months, anecdotal evidence suggested that transacted prices have fallen by as much as 35-50% in areas such as Dubai Marina, Downtown Burj Dubai and Palm Jumeirah, the note said.

'We believe the government will co-ordinate efforts to restrict the number of housing units coming on stream and we believe the number of housing units released in 2009 will be less than half our original forecast of 70,000 units,' the bank added.

The National