{"id":19954,"date":"2014-09-25T06:04:31","date_gmt":"2014-09-25T04:04:31","guid":{"rendered":"http:\/\/www.w-t-w.org\/en\/?p=19954"},"modified":"2014-09-26T05:28:39","modified_gmt":"2014-09-26T03:28:39","slug":"dubai-residential-property","status":"publish","type":"post","link":"https:\/\/www.w-t-w.org\/en\/dubai-residential-property\/","title":{"rendered":"Dubai Residential Property Values?"},"content":{"rendered":"

Depending on who you talk to…prices went up easily by 50% and perhaps by 70% over the past five years since the bottom in early 2009; everyone appears to agree that they are back to where they were in January 2008. What happened between then and now is a subject of collective amnesia as are many of the statements made at the 2008 Cityscape…for example the spectacularly miss-timed pronouncement by one expert… \u201cInvestors say 2009 will be the best year for real estate investment in MENA, ever\u201d<\/em>.<\/p>\n

Two things can happen once real estate prices start to \u201ccool\u201d<\/em> after a period of energetic growth. If that 50% to 70% was a \u201cbubble\u201d the next thing will likely happen will be a \u201cbust\u201d<\/em>…good time to panic. There again, according to our calculations, prices went up by 100% in the five years preceding 2008, so perhaps that cooling could simply be a \u201cSoros-Dip<\/em>\u201d, signaling that a new bubble is brewing in the background…good time to buy. Our view is neither:<\/p>\n

This is a model of Dubai\u2019s residential property prices published in July 2009. It offered an explanation of what had just happened (the Bubble & Pop); with a prediction in hard numbers for what was going to happen next.<\/p>\n

\"\"
\nhttp:\/\/www.marketoracle.co.uk\/Article12114.html<\/a><\/p>\n

The historical line was based mainly on tracking asking prices of apartments in the Greens and Dubai Marina<\/a> and weighting those back to a smaller data-base of actual transactions. It may not be representative of the market as a whole; compared to other indexes up to 2009 it agrees pretty well with Colliers and ASTECO, there is however a wide variation of opinions regards to the details amongst the experts. All the same, no one disagrees that there WAS a bubble up to late 2008 and there WAS a bust.<\/p>\n

The thesis behind the prediction, i.e. the dotted-line, (explained in that article) is that in every market there is the \u201ccorrect<\/em>\u201d price. But markets sometimes go into \u201cdisequilibrium<\/em>\u201d. When that happens, the amount of disequilibrium \u201cUP<\/em>\u201d tends to be reflected in the amount of the subsequent disequilibrium \u201cDOWN\u201d<\/em>.<\/p>\n

From a practical standpoint, if you know what the \u201ccorrect<\/em>\u201d price is; the theory says you can make reasonably accurate predictions about the gyrations in the immediate future, following the bust. Granted working out the \u201ccorrect price<\/em>\u201d requires an understanding of valuation as in figuring out what International Valuation Standards calls \u201cOther than Market Value\u201d<\/em>. Often the experts call that \u201cFair Value<\/em>\u201d although there is nothing \u201cfai<\/em>r\u201d about it. More confusing, different experts have different definitions about what \u201cFair Value<\/em>\u201d means, so it can mean just about anything, which is why real estate agents use the phase in the same breath as \u201csought-after\u201d<\/em>, pristine<\/em>\u201d…\u201cprime<\/em>\u201d, whatever those words mean?<\/p>\n

Semantics aside; if you know what the price \u201cshould\u201d<\/em> have been…if not for an episode of \u201cdisequilibrium\u201d<\/em> then after a bubble pop\u2019s you can figure out<\/p>\n

    \n
  1. at what point the prices will likely bottom, and<\/li>\n
  2. where they will bounce back to, that\u2019s the dotted line on the chart. You also get an idea about<\/li>\n
  3. timing, although that\u2019s harder to predict because it depends mainly on how long it takes the banker-fall-guys to wake up from their jingle-mail-induced paralysis.<\/li>\n<\/ol>\n

    \"Housing<\/a><\/p>\n

     <\/p>\n

     <\/p>\n","protected":false},"excerpt":{"rendered":"

    Depending on who you talk to…prices went up easily by 50% and perhaps by 70% over the past five years since the bottom in early 2009; everyone appears to agree that they are back to where they were in January … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":22,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"footnotes":""},"categories":[23,13],"tags":[],"class_list":["post-19954","post","type-post","status-publish","format-standard","hentry","category-entrepreneurs","category-finance"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t