Sultan Ahmed bin Sulayem, the Chairman of Dubai World, has denied the possibility of any drop in Dubai property prices, and assured that the global financial crisis, will not cause cancellation of any project announced by the group.
When speaking to bankers at the Dubai International Financial Center, Sulayem pointed out that the Gulf economies enjoy a stronger foundation, unlike the problems faced in Iceland or any other place.
"We have taken loans, most of which are borrowed locally. All projects launched are funded by the banks within the region," he pointed out.
Dubai property market continues to remain strong despite the global liquidity crunch. Although the demand-supply imbalance continues, there is no downward trend being noticed in prices, despite few desperate investors trying to sell at lower prices.
With reference to the slowdown in property sales, Sulayem said that the market sure has appetite, but lacks the will.
According to Sulayem, the biggest challenge faced now is not liquidity, but fear. The dropping confidence levels are causing people to react in an irrational manner.
Speaking about the Dubai real estate sector, Sulayem said "We are optimistic about the sector, and are committed towards delivering all projects that we have announced. However, the cost of funding has increased, and we are intelligently managing our finance."
He continued that the investor fear is hindering the recovery of stock market. With the share prices being down, nobody wants to buy. He requested banks to curb speculative practices and focus on their conventional role of lending.
Sulayem also took the opportunity to hail the Gulf central banks that restricted lending, which has protected the banking system.