Property: Thanks for the slump, Asia

Ian Griffiths
Sunday 18 January 1998 00:02 GMT
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ONE OF the delights of international travel is the exposure to some extremely dubious satellite television programmes. In hotel bedrooms, airport departure lounges and even unsophisticated apartment blocks a torrent of mediocrity in a multitude of languages is piped in the general direction of the lonely globetrotter.

What is most intriguing is the surprising consistency in the content of the news programmes, which are obligatory to add the requisite gravitas to the banality and futility of the rest of the content. This consistency is no doubt a function of the supreme judgement of news editors around the globe who must decide what momentous events they will share with their viewers in order to give them the time to make a cup of tea or raid the mini-bar.

Or could it be that there is simply a finite amount of footage on offer? Last week I saw exactly the same pictures of power pylons bent double by the ferocious Canadian ice storm in at least six languages. I was also treated to exactly the same images of anguished Orientals in suits, clearly illustrating the Asian financial crisis.

One day I am going to turn myself into a 24-hour news channel, but this must wait until I have shared with you my theory about the Asian financial crisis. It is now apparent that the crisis has been granted the status of an "official international excuse". Even the cover of a foreign language cannot disguise the convenience of the international excuse. Around the world profits are being cut, contracts lost, jobs shed and turmoil created, all by the latent Orient.

In other circumstances I might get on my high horse and drone on about the immorality of it all. However, I actually see the Asian crisis as quite positive and look forward to it being blamed for an impending property slump. I apologise to home owners, but I am afraid my selfish ambition to join the property ladder has snuffed out the last embers of goodwill to all men still lingering from Christmas.

I subscribe to this theory not just because I want property prices to fall but because I believe it is based on shrewd and compelling analysis of the market. It is well established, in London at least, that property prices have been supported to some extent by money from the Far East which has literally been looking for a home. One property company told me last year about a new development of luxury (ie extremely expensive) apartments which had been almost exclusively pre-sold to Asian buyers, not in order to experience breathtaking river views but as a financial investment.

I guess these Asian apartment owners will be feeling a little less expansive now that the World Bank barbarians are at the gate and the IMF tanks are parked on the lawn. If local asset prices are falling, austerity measures being introduced and loans being called, the London duplex will be seen in a rather different light.

Two things will happen. First, Asian buyers will vanish from the market. Second, buyers will become sellers as they realise overseas assets to shore up finances back home. The result should be a market correction. This will coincide with a property market which is slowing down and yet more interest rate rises. Estate agents will be looking for an explanation to offer hapless clients. Answer - the Asian financial crisis. In weeks the correction will become a slump and I will be the proud owner of a three-bed semi.

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