DUBAI, March 20 (Reuters) - Dubai's property market is beginning to show early signs of weakening nearly three weeks into the U.S.-Israeli war on Iran, with data from analysts showing tanking transaction volumes and some real estate agents pointing to price reductions.

The war, and Tehran's strikes against Israel, U.S. bases and Gulf states including the United Arab Emirates, have pierced Dubai's image as a safe haven for the world's wealthy.

Real-estate transaction volumes in the UAE fell 37% year-on-year in the first 12 days of March, and 49% month-on-month, Goldman Sachs analysts estimated in a note published this week.

Some properties are already being offered at big discounts, with price cuts of 12-15%, according to some real estate agents and messages on social media that Reuters reviewed.

For instance, a seller was looking for a "quick sale" for a property close to the Burj Khalifa - the world's tallest building - a message shared by an agent read. The seller was looking for $650,000, down about 12% from a previous price of $735,000 "due to the current situation". The agent spoke on condition of anonymity because of the sensitivity of the matter.

An off-plan flat in Dubai's coveted Palm Jumeirah was also being offered at a 15% discount to its original price to around $2 million, according to a message reviewed by Reuters on a WhatsApp group created a week into the war.

HEADING FOR A SLOWDOWN?

The UAE's real estate boom has mirrored Dubai's rise, but there were already concerns that the market was headed for a slowdown after five years of rising prices.

The conflict is the biggest test to date for the market, where demand was fueled by an influx of wealthy migrants attracted by the UAE's tax-free regime.

Shares in property developers have fallen, with Emaar Properties, the developer behind Burj Khalifa, down more than 26% on the Dubai bourse since the war began.

Goldman Sachs said the total value of completed transactions so far this month was down by half compared with February - a much bigger drop than during the 2024 Dubai floods or a previous Iran-Israeli conflict last June - although it said the median transacted price was only down 3% on a year earlier.

Analysts at Citi say the war introduced "considerable risk" for Dubai's future population growth expectations as it could deter home-buyers and property investors. They now assume 1% population growth in Dubai this year, and 2-2.5% annually between 2027 and 2031, against 4% in recent years.

They said that in their bearish case for Dubai, property prices would drop by an average of 7% annually between this year and 2028.

ACTIVITY HAS NOT STOPPED

However, executives on the ground are not panicking, saying market activity has not stopped.

"I believe everyone is very different in how they assess risk and how they perceive risk. But the data tells a very clear story, right? Transactions haven't stopped," said Imran Sheikh, founder and chairman at real estate investment firm BlackOak. 

"We have one client from Africa who has said, if you see any opportunities over the next month, please go ahead," Sheikh said.

One circa-$25 million off-plan unit on the Palm was sold to former UFC heavyweight champion Francis Ngannou this week, which developer Arada said "underscores continued investor appetite for branded luxury residences in Dubai". 

"There are many investors who are calling us to ask if you have clients who want to sell at distress or anybody who sells at a discount, (and say) we're ready to buy it," Himanshu Khandelwal, CEO at Dubai-based investment firm Asas Capital, told Reuters, citing Emirati clients and Indian family offices.

Emaar Properties founder and Chair Mohamed Alabbar was sanguine, telling CNBC this month that "nobody wants to budge" on price.

"At present, we are not seeing widespread discounting, as most buyers remain focused on long-term value rather than short-term price fluctuations," Tauseef Khan, founder and chair at Dugasta Properties, told Reuters.

($1 = 3.6726 UAE dirham)