Financial crisis intensifies as federal government pumps funds into rescue operation
Dubai's construction boom is to be capped by some of its largest developers as the UAE steps in to bail out the country's ailing banking sector.
The UAE's federal government is to pump funds into the Emirates Development Bank, a new vehicle set up after the merging of state mortgage lenders Amlak and Tamweel.
Cheap liquidity in Dubai has dried up in recent weeks, forcing the UAE to take a similar course of action to Europe and the US in bailing out its banks with federal funds.
Mohammed Alabbar, the chairman of Emaar, said that he and other developers would force a slowdown in construction projects to ease the number of properties hitting the market and prevent an all-out property crash.
Emaar will collaborate with Nakheel and Dubai Holdings to put a cap on new construction projects. The three together control 70% of Dubai's property market.
Nakheel is the developer behind the Palm Islands and Emaar the builder of the Downtown Burj Dubai scheme. Dubai has around $1tr (£600bn) of construction projects on site or in planning.
At an emergency conference in Dubai, Alabbar said: “We are rationalising our expenditure and consolidating our activities… If you have to pull something, then you pull something."
There has been speculation that Abu Dhabi, Dubai's richer neighbour, might be planning to acquire some of the country's assets, including Emirates Airlines and Nakheel, but Alabbar denied that this was the case.