Perhaps unsurprisingly, Dubai’s real estate boom has turned to bust as house prices plummeted by 40% in the first quarter of 2009.

Once home to the world’s biggest construction boom, these slumping numbers now ensure that Dubai tops the list among countries hit hardest by the global recession. According to the Guardian, “Dubai’s ruling family, the Maktoums, have already sought a £13.5bn emergency loan from their oil-rich neighbour Abu Dhabi, and fears are growing that many of the region’s biggest properties companies are close to bankruptcy.”

The good news is that this could create some opportunities for potential buyers, however there’s still no clear indication that this market has hit bottom yet. Until bottom hits, buyers are likely, and advised, to stay frozen.

Other countries that experienced big downturns in housing prices so far this year were Singapore (16%), Estonia (10%), Norway (6%) and Denmark (6%). At a staggering 40%, however, the problem is obviously especially pronounced in Dubai.

The list of losers could soon be longer, since several struggling nations have not yet reported their 2009 numbers. For instance, Latvia suffered a 34% loss last year but haven’t yet reported this year.

Despite the global downturn, housing prices have actually increased in some countries. Finland (4% increase) and Thailand (2.7% increase) topped that fortunate list, with Israel and Switzerland also showing decent increases over 2%.

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