The UAE’s decision to grant three-year residency visas for property worth more than AED1m is unlikely to give any boost to Dubai’s beleaguered real estate market, Mishal Kanoo has said.

The leading Arab businessman and deputy chairman of the Gulf conglomerate Kanoo Group said property prices in new Dubai were leveling out but could still fall further.

“It might affect a few people but I can’t see it having a major affect,” he said of the new visa regulations. “Just look at what the majority of those have experienced in purchasing property over here – do you think they are going to go back and say what a wonderful thing it was?

“Once bitten, twice shy. I think you are going to have a lot of people going ‘no, not too sure,’” he said.

Investors from the US, Europe and Russia are only likely to show interest in the emirate’s property market when economies in their home markets show signs of recovery, he said.

“If these major buyers are feeling an economic pinch in their countries, the chances of them coming here [and investing] are going to be slim-to-none.

“There are some good indicators that the market is leveling….but it doesn’t mean to say we are going to see growth.”

Prices in Dubai, the Gulf’s worst-performing market in the last three years, have fallen more than 60 percent from their peak since the collapse of the emirate’s real estate bubble in late 2008.

A Reuters poll in June showed analysts believe prices could plummet a further 10 percent as the market is squeezed by nearly a third too much supply.

Kanoo said he remained bullish on the UAE economy, which has been boosted by high oil prices and its reputation as a safe haven amid a wave of political unrest in the Arab world.

The Institute of International Finance on Monday revised its forecast for the UAE’s 2011 GDP growth from 3.8 percent to 4.4 percent.

“I have no choice but to be bullish,” Kanoo said. “We like to talk about [the fact that] we have diversified or tried to diversify outside of the oil and gas sector but let’s face it the whole region lives and dies by that.

“Subsequently I’m going by the value and the pricing of the oil and gas sector and both are shooting up. So while I’m not going to reap the rewards of it right now, a few months down the road is when I’ll be enjoying that. So how can I not be bullish?”