Realty projects in the UAE will not be scaled down despite the global financial crisis, said Dr Ahmed Saif Belhasa, Chairman of the UAE Contractors' Association.

"Banks and other financial institutions will not stop funding real estate projects despite the lack of liquidity," he said. "I do not believe the construction sector will decline. Developers will continue to execute projects and banks and financial institutions will continue to provide funding for new housing units."

He said projects worth hundreds of billions of dirhams had been announced at Cityscape.

"We are living in an exceptional period, but certainly finance will be available from the banks, they will never step back from providing it. However, the coming days might see new regulations on financing.

"But to say that projects would stop because of a lack of finance is not imaginable because this would mean that development and life in the UAE would come to a halt," said Dr Belhasa.

"It is impossible that development in the country would stop because of the financial crisis."

Ahmed Al Mazrouie, Chairman of the association's Abu Dhabi branch, said: "The world financial crisis, over the coming days, will lead to a drop in the cost of raw materials, especially steel and cement.

"Construction work in Europe and the United States will be cut back considerably as a result of the crisis and this will result in large supplies of raw materials on the market and a drop in prices. Gulf countries will benefit most from this."

Al Mazrouie said the country's contracting sector had not been shaken by the credit crunch. "The UAE faces no liquidity problem and has a strong gross domestic product. Most of the emirates have a growing demand for housing units and very little supply. Governments support the real estate boom, they will provide the necessary liquidity."

Asked about recent falls in the steel prices, Al Mazrouie said: "This will not have a big effect on real estate prices as the amount of steel in new houses is not large. Also, the prices of most other materials are rising. Labour and staff salaries are up."