It's all connected. Stocks and bonds are not making the kind of returns the rich want. The global economy is not growing fast enough. Large sections of it are not growing at all. What is the world's surplus cash supposed to do? One solution is to open and flow into real estate markets in growing or glamorous Western cities.
Forbes posted an excellent piece about how the global rich are transforming Manhattan's skyline. The defining building in this new development is that obscene slim super-tower called 432 Park Avenue. Combined, the 104 units in this monstrosity have an estimated value of $3.1 billion.
In London, the situation appears to be even worse. There, an estimated "740 uninhabited properties worth £5 million or more." Indeed whole sections of the city are only occupied by cash. Those who are familiar with horror fiction know that human ghosts have difficult connecting with the living; the homes ghosted by capital, however, don't. In the case of London, they've directly contributed to the stunning rise in the average property values in London (it's now £500,000— $750,000). Both markets (London and New York) are being inflated by money that needs a place to park and accumulate. The result: Manhattan has become too expensive for New Yorkers, and London for Londoners.
Seattle recently became recognized as a destination for surplus capital originating mostly in China. According to the Seattle Times, last year 33 homes were sold for $5 million or more, and 40 percent of the buyers were foreigners, and two-thirds of those home were bought with cash. Our city is certainly heading the way of Manhattan and London. It makes no economic sense to build affordable housing when you can build luxury apartments that attract local (tech money), regional (the elite in places like Anchorage), and international (China) surplus cash.
The last of these three, represented by the global rich, is bound to have the biggest impact because though in they constitute a tiny part of the human population, the "attractive options for capital preservation" are very, very limited. This pressure will, if not checked, dramatically transform our skyline.
The pre-capitalist moment had church spires, and the capitalist growth moment, modernist corporate headquarters. Our post-growth moment is pushing to have towers housing nothing but cash.