Casual Observation Can Tell You It’s A Bubble
A report from USA Today. “Uber-Richskis (rich Russians) is the new byword for opulent dwellers in some of the most exclusive London neighborhoods. A continent away in Vancouver, the number ‘8′ — a symbol of good fortune in China — adorns windows of real-estate brokers. More than 3,000 miles to the south of that Canadian city, Miami has become the housing mecca for Latin American millionaires seeking a haven from political and economic chaos that threaten their wealth at home. Sotheby’s calculates there are 211,275 ultra-high-net-worth individuals on the planet — defined as those with $30 million or more in net assets. And 79% of them own at least two homes.”
“‘One of the biggest trends we are monitoring across pretty much all the markets we focus on is the ongoing globalization of demand for property,’ wrote Liam Bailey, Knight Frank’s global head of research, in the firm’s 2015 report on global wealth. ‘As The Economist magazine noted earlier this year, 60 million rich-world households spend more than 30% of their income on housing; in the emerging world 200 million households live in slums. With rapid urbanization, these numbers will only grow.’”
ABC News in Australia. “It is the B-word that few with their hands on the levers of Australia’s economy have dared to publicly utter. Until now. The head of Treasury John Fraser’s unexpectedly blunt assessment at Senate Estimates took many observers by surprise. ‘When you look at the housing price bubble evidence, it’s unequivocally the case in Sydney. Unequivocally,’ Mr Fraser said. ‘Frankly, whatever the data says, just casual observation can tell you it’s the case.’”
“‘As someone who, along with the bank, owns the house in Sydney, I do hope that our housing prices are increasing,’ Prime Minister Tony Abbott told Parliament. ‘I want housing to be affordable but nevertheless, I also want house prices to be modestly increasing.’”
The Daily Telegraph in Australia. “The market in the Macarthur region is red hot with properties at skyrocketing prices selling the instant they are listed. Agents report up to 90 per cent of buyers in the region are investors, who are snapping up properties as soon as they hit the market, which is pushing prices through the roof. ‘Nine out of 10 properties will get offers from investors in the Chinese community, which is pushing up prices,’ Prudential Real Estate Campbelltown director Graeme Paddock said. ‘Buyers are paying up to $100,000 more than the listing price because of the boom.’”
“Mr Paddock sold a three- bedroom fibro house in Lindesay St, Campbelltown, two weeks ago for $495,0000. The homeowners bought the property 18 months earlier for $360,000.”
CBC News in Canada. “If you’re looking for a luxury home, Calgary is the place to be. In May, there were more than 600 homes for sale in the city listed at more than $1 million. Only 65 of them sold last month, which suggests there’s nine months of inventory on the market. For every 10 new listings, there were two sales. ‘The big thing we’ve noticed, some people have put product on to sell because of the drop in oil,’ said realtor Len Wong. ‘And I hate to say it, there’s some uncertainty about the NDP.’”
The Nation on Thailand. “Demand to buy homes in Chon Buri province has recovered as investors from China and Japan have returned to the markets in both the Eastern Seaboard and Pattaya, according to Quality Houses CEO Chadchart Sittipunt. Demand from Russians had dropped as the ruble weakened. The average annual take-up rate for condominiums in Pattaya was about 2,200 units from 2007 to 2010. The average annual take-up rate increased in the 2011-14 period to around 2,750 units, and then dropped dramatically because of a supply glut.”
“The average number of condominium units flowing into the market from 2011 to 2014 was about 6,300, while only 3,200 condo units a year sold in the same time period. Prospects for the condo market in Pattaya were not good, said Risinee Sarikaputra, director of research and consultancy, Knight Frank Chartered (Thailand), because traditionally major buyers have been Russian. With the value of the rouble in decline, Russian activity in the condo market would be limited. Also, some units already purchased by Russians but not yet transferred would be returned to the market as they could no longer afford them, she said.”
The Epoch Times on China. “Six years after a forced demolition left him homeless and destitute, 55-year-old Hao Jianzong has gotten his revenge by killing Cao Junxi, the man in charge of the wrecking operation. Many Chinese Internet users have expressed sympathy, with some even hailing him as a hero. As China experienced the massive real estate boom that has been often touted as the most visible sign of the country’s meteoric economic progress, many of China’s poor became victims as wealthy land developers seized their land, typically for little compensation. Those who choose to defend their property rather than become homeless often meet with violence.”
“Independent Chinese writer Du Guangda told Radio Free Asia that public support for Hao Jianzong shows the general disdain the populace feels towards forced property demolitions taking place in their country. ‘Chinese people strongly resent the house demolition under the government, so internet comments overwhelmingly support the house owner,’ Du said, ‘There’s huge profitably in the demolition projects, and there’s no depth officials won’t sink to when it comes to this business.’”
UPI on North Korea. “North Koreans privileged enough to move into a gleaming 46-story apartment in Pyongyang are hesitant to live in the buildings because of water and power shortages. South Korea-based news outlet Daily NK reported that special housing reserved for faculty at North Korea’s Kim Chaek University of Technology does not receive sufficient electricity to operate the elevator on a regular basis.”
“South Korean newspaper Chosun Ilbo reported North Korean leader Kim Jong Un ordered construction on the apartments begin in August 2013, and the flashy towers quickly became Kim’s pet project. At the time of the dedication, North Korea’s state-controlled media touted the buildings as ‘The fruit of the Supreme Leader’s warm love.’ But critical voices are on the rise, sources said, because the building does not meet the conditions of reality. It was an ‘overblown project from the start,’ said another source inside North Korea.”
“Authorities have ordered assigned residents to move to the building, but many are stepping back due to the lack of amenities and utilities. Sources said some residents would not live in the building even if free housing was provided.”
