Introduction
Whether you refer to it as a credit crunch or a confidence crunch, the reality is that most buyers are currently apprehensive. Mamad Kashani Akhavan provides insight into the origins and implications of this situation and offers reassurance to potential investors.
Origins of the Crisis
Mamad explains, “The problems began with the banks refusing to lend money. Therefore, it isn’t the classic case of whether the chicken came before the egg. Clearly, everything began with a credit crunch. However, it has subsequently turned into a confidence crunch as investors are now afraid of investing their money.”
Opportunities Amidst Uncertainty
Despite the prevailing apprehension, Mamad emphasizes that opportunities still exist for end-users. “There are trillions of dollars in bank deposits worldwide earning no interest for account holders. Once this irrational fear subsides, investors will regain the confidence to start buying. Given all the recent financial problems, I strongly believe that property investment will become a safe haven for many of these investors.”
Dubai: A Lucrative Market
Mamad remains optimistic about Dubai's potential. “People are still interested in setting up businesses in Dubai, visiting as tourists, and purchasing property as their main residence or holiday home. In my opinion, this will be the catalyst for aiding the recovery of the economy.”
Future Market Predictions
Mamad makes a bold prediction regarding the future of the property market. “Provided we are looking at the value of genuine prime properties—high-quality properties in desirable locations—I believe that they will not only reach the peak of 2008 values but will surpass them.”
Transition Period Challenges
He acknowledges that the remainder of 2009 will be challenging as Dubai undergoes a major transition period. “The speculators who previously dominated the Dubai market are now being replaced by long-term investors and end-users. This is a healthy process, but it will undoubtedly take time.”
Advice for Long-Term Investors
Although predicting when the market will bottom out is difficult, Mamad is adamant that opportunities still exist for long-term investors. Prime properties can still be purchased at good prices.
“When these opportunities arise, investors should not let them pass by in the hope that better opportunities may come if they wait longer,” advises Mamad.
