Property prices in Dubai will have fallen another 40 percent by the end of 2010 when one in three homes will be vacant, UBS said on Thursday.

'From our vantage point we think we’re still relatively early in the cycle,' analyst Saud Masud told Arabian Business in an interview about recent reports that Dubai real estate prices are showing signs of stabilising. 'We believe the fundamentals are weakening as we speak.'

That was most likely due to pent up demand coming into the market and consumer confidence recovering from the initial shock following a steep decline in prices, Masud said.