Friday, October 31, 2008

Drop in property prices & cancellation of projects, unlikely: Sulayem

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.

2 comments:

Anonymous said...

HI,ACCORDING TO MY COMMENT, THE REASON FRO NOT SEEN ANY PRICE DOWN IN DUBAI IS MAINLY BEX THE CITY ITSELF STANDS FOR FIRST PREFERENCE FOR BIG SHOOTS , AND IN TODAY ALSO EVEN THE WORLD IS SAYING THERE IS UNAVLIABILTY OF FUNDS,THE REASON BEHIND THATS IS PEOPLE HAVE HOLDED THERE FUNDS WITH OUT INVESTING ANY WHERE JUST THEY R IN THE POSITION OF WAIT AND WATCH NOW

Abu Ziad, DXB said...

I believe that the Global Financial Crisis will have its impact in a way on UAE real estate market, however the strong economy, of the country as well as the other GCC countries, can absorb this impact.

A clear proof of that is the excessive visits of the western politicians to the GCC area trying to find the support.

I think also that the current market panic could be measured like the number of victims in fire accidents, the major number of victims is resulted from the PANIC, only few number of victims will injured by the fire itself.

I'm also looking at the bright side of the impact as it will filetrate the market from inferior quality of service providers, unrealistic expectation of time delivery, Exaggerated cost of materials, rents, services etc.