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Asian Savings And The London Housing Market

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I know this topic has been done to death to some extent but I am wondering if anyone has any stats.

The way I see it, assuming that Asian savings are driving London house prices, what happens if China goes pop?

To my mind there are 2 possible explanations:

1. Housing is liquidated to provide funds to pay back bad debt, leading to house price falls.

2. Even more capital flight occurs from Asia, leading to house price rises.

My current thinking is 1, based on the assumption that as much money as possible is already leaving Asia and a crisis in Asia would indicate a lack of funds to export. However I was thinking I have no numbers to back this up and therefore the thinking is weak.

I was wondering whether we can draw lessons from history, particularly the last Asian Financial Crisis or the popping of the Japan bubble and what happened there. Does anyone have any thoughts/numbers?

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The person i work with has a good friend who teaches in Singapore and he says that because of the economic situation people are flush with cash and really dont know what to do with it, they want to invest it and to them London property is a no brainer

I think they are purchising London property as a part of there portfolio and as they become more wealthy they will just buy more.

The crash could be 4/5 years away.

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The person i work with has a good friend who teaches in Singapore and he says that because of the economic situation people are flush with cash and really dont know what to do with it, they want to invest it and to them London property is a no brainer

I think they are purchising London property as a part of there portfolio and as they become more wealthy they will just buy more.

The crash could be 4/5 years away.

And, under those circumstances, it will be monumental.

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Savills frequently publish data in this area but it is somewhat tainted as being an absolutely fantastic thing that shows the truly superb health of London.

85% of prime homes sold to overseas buyers last year:

http://www.thisismon...eas-buyers.html

But 20% is Asian most is European. Or funneled through Europe? Do you have any thoughts on my questions?

Edit: thanks by the way

Edited by FaFa!

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I wonder how much of it is suspect Chinese money, shipped over here to keep it away from prying eyes. I guess that would reduce the chances of it being repatriated.

In the good old days people used to hide money in numbered swiss bank accounts, now they dont trust the swiss as much.

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Or currency values will crash and land and properties and shares will have a greater value.

Impossible. The current imbalance between asset prices and current prices already requires the UK govt to borrow >£100bn p.a. to sustain. If/when sterling collapses the UK's borrowing costs will soar as imported inflation hammers the economy flat. Property and shares will go into freefall until asset prices and current prices are brought back into equilibrium.

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