Colliers said speculators have already left the market
Property prices in Dubai plunged 41% during the first three months of this year, a report has calculated.
The decline is from the last quarter of 2008, said global real estate consultancy Colliers International.
It is just the latest indication of the extent to which Dubai's property boom of recent years has come to an end in the face of the worldwide recession.
Colliers said prices had fallen as global finance has dried up and job opportunities in Dubai have declined.
The firm's report measured property prices in parts of Dubai where foreign workers have been allowed to buy homes since the market was opened up in 2002.
The 41% drop in prices between January and March followed an 8% fall in the previous three-month period.
Colliers added that speculators - people who had bought property in Dubai as an investment - had already left the market.
It said prices were now likely to continue to fall, but it was too early to predict when the market would hit rock bottom.
"The heat has gone out the market completely," said Colliers' Middle East chief executive John Davis.
Dubai has enjoyed rapid economic growth over the past decade, led by a construction boom, as its ruler Mohammed bin Rashid Al Maktoum sought to diversify the economy away from its diminishing oil reserves.
It is one of the seven states that make up the United Arab Emirates.