Advertised house price actually rose by 4% between October and November, according to the HSBC monthly report but this was due to a small number of highly priced apartments coming onto the market and not a trend.
Overall the picture is one of a rapidly cooling market, HSBC said and there was a 36% jump in the number of people putting their property on the market as price growth slows and mortgage funding dries up in the wake of the global credit crunch.
Dubai's housing market could be approaching 'tipping point', analysts said. This comes on the back of last month's report which found property prices in Dubai fell 4% between September and October, with the price of villas tumbling 19%.
Last week, property consultant Colliers International said house price growth slowed to 5% in the third quarter this year and warned values could fall in the final quarter of 2008.
But United Arab Emirate central bank governor Sultan Nasser al-Suweidi is upbeat. He said a slump in the Gulf's once booming property sector would be limited while the UAE would ringfence its banking system to protect it from future crises.
'The real estate sector is to be affected. But we must understand that this sector is very rigid and behaves somewhat differently from stock markets due to the fact that the large part of the sector is owned by single and wealthy individual landlords who can weather high vacancy rates,' al-Suweidi said.
He confirmed that the UAE would also ringfence it's banking system and restrict some practices to ensure it could not be dragged into future crises. He added that the financial crisis and the consequent slowdown in the economy would reduce inflation.
'Inflation now is expected to go down significantly. One strong reason is the ongoing global financial crisis,' he added.
