A welcome slump

THE relentless pace of increases in British home prices appears to be on the verge of a significant slowdown, with experts across the real estate industry predicting a lengthy stretch of zero growth. That's welcome news for anyone looking to enter the property market, especially in London, where prices in central boroughs have risen by as much as 36% over the past year. The excesses of the city's usual cast of fabulously wealthy expatriates, many of them flush with petro-dollars (or petro-rubles), have produced anecdotes like that of the 77 square foot converted closet in Knightsbridge which sold for over Â£100,000. With stories like that floating around many Londoners can't help but be relieved that things may cool down, even if many of them have most or all of their equity tied up in a home.

You might think that stagnant home prices in London could make vacation property there newly attractive to a large group of foreigners who don't draw their income from dubiously obtained Siberian oil wells: Americans. You would, however, be wrong. The calamitous decline in the value of the US dollar means that even in a cheaper London all but the wealthiest Americans will be disappointed if in the market for anything more than, say, the aforementioned converted closet in Knightsbridge.

So who, then, might snap up newly affordable second homes in one of the world's most desirable cities? My pounds are on an unlikely set of candidates: Canadians. Canada's surging economy, boosted by high oil prices, has pushed the much-maligned 'northern Peso' to historic highs against a raft of world currencies. As a result savvy Canucks have begun a buying spree of property and stock in the US dramatic enough to induce Jim Cramer, the American television investment guru, to warn of a "Canadian invasion". Could London be far behind? I, for one, will be keeping a keen eye out for hockey sticks, lumberjack shirts, and DVDs of John Candy films in Belgravia, Kensington, and Chelsea.