The Global Phoenix - Issue 3 August 2017 | Page 27

2. The Data Trap - The Speculation Effect
When sourcing raw data it is essential that the
true local reality is reported and one must be on
guard not to be caught out by local suppliers
that artificially inflate prices.
Many local suppliers have the multi $$$
perspective of multinationals! Once the word
‘multinational’, ‘foreign’ or ‘expatriate’ is uttered
they will artificially inflate their asking price to
match the pocket book of their prospective
client. This can lead to a false result and a
phenomenon similar to speculation on the stock
market. When inflated prices are published as
guidelines for corporate budget-setting, expat
housing budgets can be set at an artificially
high level. Assignees traditionally wish to secure
a property at the maximum of their assigned
allowance, so will arrive in the destination
looking for a property costing $$$ rather than
$$ and the local supplier/landlord will of course
oblige by providing a property matching the
anticipated price tag.
Using local consultants to source data rather
than imported data collectors can be a
safeguard against local suppliers’ tendency
to inflate prices for strangers and foreigners.
This follows the same principle on which
DSP operate, working locally with local
representatives who know their local market
well, and who also know ‘how to move’ so as not
to be ripped off.
3. Unexpected Impact on Trends
Unpredictable events do not always influence trends as one might anticipate. An example
is Sierra Leone, struck particularly badly by the Western Africa Ebola epidemic in 2013/14.
Expats were evacuated from the capital, Freetown, overnight once the gravity of the situation
became apparent, leaving numerous expat properties empty, most of which had been paid
for a year up front as is common practice locally.
The tendency might be to anticipate that rental prices would plummet, but this was not
the case. Demand actually increased due to the influx of aid and relief workers as NGO
established operations in the capital, Freetown. Local landlords, cashed in on the opportunity,
and maintained or even raised their prices for short-term lets, and the market remained
buoyant.
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