[nemo44x]

I believe that raising interest rates would cause a pretty large fall in housing prices in cities that have large foreign ownership.

With interest rates rising, the bid for housing will drop accordingly and many of these investment properties would immediately be put on the market to extract full value from them which would cause a glut of supply. This would further cause prices to fall.

This would be a good time for someone with a huge cash downpayment (or cash outright) and the prospect of actually living in the place full time to purchase a property in these areas.

Honestly, until then it makes more sense to rent if you can't afford to pay cash outright due to maintenance fees, property taxes and so on. In NYC buying a condo with 20% down is foolish right now, for instance. Especially if interest rates do indeed begin to rise. Better off saving as much cash as possible and waiting for rates to rise which should cause plenty of investment properties that are rarely lived in to go on the market to quickly harvest the proceeds.