Global meltdown discussed at Dubai Women's College

Maratheftis presented to students of the Real Estate Bachelor Program and faculty of DWC reasons behind the current global meltdown arguing that the main contributing factor was ignoring asset price inflation in determining monetary policies, including interest rates, by policy makers of major economies of the world such as the United States and the United Kingdom. This resulted in excessive bad credit being granted leading to large scale defaults, which in turn had a 'knock on' effect on the global financial system.

According to Maratheftis, another systemic problem is the US Trade imbalance vis-à-vis countries such as China which has also indirectly fuelled the credit expansion within US. He noted that the impact of this crisis will inevitably affect UAE's growth rate resulting in a much lower growth rate but not a recession as is expected elsewhere.

Maratheftis also addressed the question as to how the real estate prices will be affected in Dubai. He artfully explained that the value of any object, whether it is ladies' handbags, basketball players or cars, is determined and explained by fundamental value drivers. When a similar analysis is applied to Dubai's real estate market, particularly to off-plan properties, the irrational values and phenomenal increase in prices could not be explained.

In some situations, contrary to logic, a completed unit was valued at a lesser price than an off-plan one, according to Maratheftis. Obviously such irrationality cannot be sustained and a price correction is being witnessed currently and may continue for the foreseeable future, particularly for off-plan properties. He was more optimistic for completed units as the fundamental demand for such units are still strong.

He rounded off the presentation with an interactive extended question and answer session with the audience. Both students and faculty immensely benefited from the lecture especially because of his ability to engage the audience with simple analogies for complex economic concepts which kept everyone absorbed for nearly two hours.

Maratheftis is an expert on the regional economy, FX strategy, and financial markets. He has attracted a large following with the accuracy of his forecasts and his ability to give engaging presentations on a wide variety of financial issues. Maratheftis has also authored a number of financial and academic articles, and appears regularly in the international media.