A recovery in the Dubai real estate market might not happen until late 2011 as a result of subdued investor sentiment, according to a new report by EFG Hermes.

Analysts at the Egypt-based investment bank, in a report published on Wednesday, said it had expected recent clarifications from the UAE government on home ownership to improve investor sentiment.

The new federal law passed earlier this month said foreigners buying a home in the UAE valued at more than 1 million dirhams would be eligible for a six-month renewable residency visa.

But EFG Hermes analysts called the rules "self-destructive rather than helpful". As a result, they have predicted that a market recovery in Dubai could happen as late as late-2011, rather than its earlier prediction of the second half of 2010.

arabianbusiness.com