The UAE Government needs to create a giant fund to support property investors and maintain growth in this vital sector, a real estate developer said yesterday.
Abdul Majeed Al Fahim, Chairman of Dubai Pearl, said end-users in the country's real estate sector had been deprived of sufficient funding to buy homes because local banks have become less flexible in extending loans.
In an interview with Emirates Business, he said the real estate industry in the UAE and other Gulf oil producers had been affected by the global financial distress but added there could be positive growth in the sector in the Emirates.
"Banks here have been a major fund source for end-users as they had given 20 to 30 year loan facilities… Today, are these banks doing the same? No because there is no secondary market in the country," he said.
"I think to address this issue is that the government should step in. It should create a large fund, a bank, a company or any other entity which will support end-users and guarantee they will pay back when they get long-term loans," Al Fahim said.
"What I mean is that there is now a real shortage of funding for end-users. We have to pay attention to sustainable business, which always focuses on the practical market not the speculative market.
"The end-users in such a situation could put 30 per cent in equity or any other resources, while the rest could be supported by that entity. This will create an environment or an opportunity for the people to go ahead with their plans. It will also create confidence in the market," he added.