The sharp slowdown in Dubai's property market may call to mind the specter of its spectacular crash during the global financial crisis, but analysts say it's different this time.
"We have seen a bit of a slowdown in prices. That doesn't suggest we'll see falls going forward," Khawar Khan, research manager at Knight Frank, said.
In the first quarter, the prices of prime properties rose just 1 percent from the previous quarter, while sales volumes were down 10 percent on quarter and 28 percent from a year earlier, Khan noted.
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He attributes the decline to cooling measures the government implemented late last year to prevent a replay of the emirate's last property cycle.
"The story this time around is different," Khan said. "Last time, we saw a massive loss of confidence across the board, across the world."
After years of frenetic development, which included constructing the world's tallest building, Dubai suffered a massive real-estate crash in the wake of the 2008 financial crisis, with property losing more than 50 percent of its value by 2011 as excessive speculation came home to roost.
It was a crisis made worse as many expatriates, who currently make up more than 80 percent of the population of the U.A.E., which includes Dubai and Abu Dhabi, parked unpaid-for cars at the airport and flew away from all their debts, sometimes including properties.
Khan noted that developers now require buyers to provide payment at each stage of construction. The government also doubled its transaction fee on property deals to 4 percent last year in a move to discourage "flipping," or quick buying and selling of units.
"The capital is guaranteed for projects. It's not like investors can bail," Khan said. "It's going to attract more serious investors into the market."
Others also don't believe the slowing sales are a worry.
"It just shows that there's a lot of confidence, particularly among sellers," despite prices rising as much as 50 percent over the past 24 months, said Donald Han, managing director at property consultancy Chestertons.
"There's no rush to sell out or reduce prices," he said. "Construction is more moderate. There is no sense of panic among developers to sell at a tremendous discount."
In addition, he noted another change this time around: investors now are able to get decent yields from renting out their flats, while prior to the crisis, capital values were rising despite an oversupplied, low-return rental market. Rents in the first quarter were up around 30 percent from a year earlier, according to Knight Frank data.
"Any market which has got a strong rental market, I think that market is poised for a more stable investment climate," Han said.
To be sure, Han did note that Dubai's property market tends to move "in sharp peaks and troughs."
And earlier this month, the U.A.E. central bank issued an official warning that the real estate sector may be overheating, with house prices in the first quarter up more than 27 percent from a year earlier, according to Knight Frank data.
The International Monetary Fund (IMF) in May also warned that the emirate may need stronger measures to prevent another property bubble.
-By CNBC.Com's Leslie Shaffer; Follow her on Twitter @LeslieShaffer1
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