The real estate market is not like most other markets in that the turnover of "inventory" is very low. Any speculation, foreign or otherwise, can have a huge ef

The real estate market is not like most other markets in that the turnover of "inventory" is very low. Any speculation, foreign or otherwise, can have a huge effect on the price. On top of that, you can't just create a new livable house or apartment out of thin air, so it takes time for the supply to catch up to demand even setting aside zoning and other considerations. Conversely, if everyone tries to leave a single market at the same time, the price can also drop very quickly relative to what they paid for it. Rent is a strict substitute for buying property so the rental prices in most cases track the real estate prices fairly closely. In fact, rental prices tend to change much faster than property as rent can be raised every year while a mortgage doesn't necessarily change once the sale has been finalized.