London Real Estate Bubble About to Burst

Focus: GLOBAL

Nicholas Vardy Image Nicholas Vardy Editor, Bull Market Alert, The Alpha Investor Letter, and The Global Guru

It may seem counter-intuitive that London’s real estate market would be so hot when everything else in Europe seems to entering a new Ice Age, but it’s happening all the same, writes Nicholas Vardy of The Global Guru.

With the recent sell-off in global stock markets, it’s now official: there isn’t a single stock market in the world that is up this year.

The S&P 500 is now down about 5% for the year—making it one of the top-performing markets of the world. Hope for a positive year in US markets rests on the possibility of a short and sharp rally between Thanksgiving and the New Year.

But don’t fret for the billionaires of the world. After all, there is one asset class that has outperformed all others this year. And that is prime housing in London. With limited supply and strong demand from Asian and Middle Eastern buyers, this asset class has risen 11.4% in the 12 months to October, even as financial markets have struggled.

Masters of the Universe No More
If you’ve been invested solely in financial markets, it’s been a tough year.

Emerging markets are down 16.6%. The Eurozone stock markets are down 18.1%, with some peripheral countries like Greece down by 50%. Despite their high profile, the BRICs (Brazil, Russia, China, and India) have also crumbled, with India faring the worst, down 27%.

The only place you have made money this year was bonds.