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- February 1, 2018: Vol. 12, Number 2

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When it comes to property yields, there is no dogma

by Maurizio Grilli

For centuries, European scholars used the phrase ipse dixit to end any discussion. The Latin expression literally means ‘he (the master) said it’ and they used it to justify any of their personal arguments — if they matched those previously used by Aristotle.

Over time, it has become associated with any unsupported rhetorical claim that lacks a logical argument, akin to an arbitrary or dogmatic statement.

As with everything else, the real estate industry is not immune from dogmatic assertions. For example, there exists a widespread belief that an increase in interest rates will inevitably, automatically and immediately result in a rise in property yields. In Europe, at least over the last four years, this has been the leitmotif of any discussion about the fortunes of the real estate industry.

However, while movements in interest rates clearly have an impact on real estate returns, the reality is much more complex.

A different patter

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