Investors often hear correlation and causation used interchangeably. However, correlation does not imply causation. Correlation is simply a relationship. The human mind likes to find patterns even when they do not exist. Patterns can be a trap for the property investor.
It is not unusual for correlation to appear in the same sentence as causation. A correlation between property values and interest rates can be reported with a causal tone by some analysts. The correlation only means two variables move together, so one cannot be isolated from the other. Commentators sometimes establish a correlation to then imply causation.
Do Asian (all non-UK?) buyers matter to the housing supply?
Asian buyers of new-build flats in the UK are cited as a factor in why first-time buyers cannot get on the housing ladder. Is that sloppy thinking, or is there a connection? If there is a connection, are we looking at correlation, causation or just random noise in the data?
Sidestepping the question for a minute, does the ownership of one's home matter when looking at the housing supply? It is reported that the UK is failing to build the homes needed. The annual shortfall is considered to be 200,000. Does this mean each year we have 200,000 more people without a roof over the head? If so, where are they? If it means that everyone has a home, but it is not the home they would like to live in, fine. Life is full of times when you want one thing, and you settle for something else. Does it matter if more rental housing is produced or more homes are for sale? Is this a debate over tenure? What exactly is the problem we are trying to solve? How does focusing on Asian investors somehow address the problem?
Asian investors are not able to vote in the UK, so they become an easy target. The term 'Asian' includes two countries with the largest populations and a collection of smaller countries. A Google search says 60% of the people in the world are Asian.