It’s Almost Like Buyers Are Playing With Monopoly Money
An update on Canada and Australia: CBC News. “If real estate is a lottery draw, Toronto-area homeowner Marni Blouin won the jackpot. Blouin and her husband purchased their modest detached home in Scarborough, Ont., 12 years ago for $238,000. In early April, they listed it for sale at $629,000, after hearing about the scorching-hot market that has boosted Toronto home prices by nearly 30 per cent annually. ‘When it was actually getting ready to be listed at the beginning of April, I couldn’t even watch the news because the hype was crazy,’ said Blouin.”
“They received an offer for $850,000 the very same day the listing was posted on MLS, and soon sold the home for $875,000. Blouin said she and her husband were shocked, but also thrilled. ‘It felt really good,’ she said. ‘We knew we would get good money, but we didn’t think it would yield that much at this point. As much as I like the money, I’m kind of sad for the people that are looking for a house, really.’”
From Quinte News. “A Belleville real estate official says the housing market in Belleville and Trenton has ‘gone into a frenzy.’ Manager of Royal LePage ProAlliance Realty, Jeff Nelles, was commenting on the latest housing sales statistics for the first quarter of 2017, released by Royal LePage. He says inventory and new build construction cannot keep up with the demand from home buyers leaving Toronto. Nelles says ‘it’s almost like buyers from the GTA are playing with monopoly money.’”
The Business News Network. “Amid growing fears of a housing bubble in Canada’s largest city, Ontario Finance Minister Charles Sousa is reportedly close to unveiling new measures to improve housing affordability. But one Bay Street money manager is skeptical about how much Queen’s Park will be able to cool the market in Toronto. ‘Mark my words - government will not fix this issue,’ said Kash Pashootan, senior vice president and portfolio manager at First Avenue Advisory, Raymond James, in an interview with BNN. ‘Unless you’re going to build land that doesn’t exist, you’re not going to fix the supply issue,’ he said.”
The Financial Post. “‘Almost the entire province of Ontario’s housing market is now on fire, while most of the rest of the country wonders what all the fuss is about,’ said Doug Porter, Bank of Montreal’s chief economist. The economist said ‘many talk about the lack of supply and land constraints driving prices,’ but noted March prices rose 21.5 per cent year over year in London and 21 per cent in Windsor. ‘There are lots of open spaces around London, for example,’ said Porter.”
The Courier Mail in Australia. “A house around the corner from me sold at auction a couple of weeks ago. It’s a modern place: brick, two-storey, built just a few years ago on a 450sq m plot, not much to look at from the outside. Faces a tiny park, so it’s in a nice spot. The price? Over $4 million. But don’t worry, there’s no housing bubble. On average, a house bought just eight years ago for $500,000 in suburban Melbourne is now worth $950,000. Again, no bubble.”
“Take this on the authority of the Federal Government. Deputy Prime Minister Barnaby Joyce insists the only thing stopping prospective homebuyers from purchasing a house to live in is their squeamishness or snobbery about moving to the country.”
The Sydney Morning Herald. “Intense media focus on housing affordability has primarily focused on the story of the individual; the young person who can’t afford a house. But in all of our focus on the individual, we are failing to recognise the greater problem – that when house prices do fall, and they will, they risk taking our banking system and the wider economy with them. We need to induce a ’soft decline’ before it is too late.”
“Our national addiction to cheap mortgage credit has placed our economy in a precarious position. We need to stem the flow of credit now, to prevent the violent bursting of a housing bubble which is otherwise inevitable.”
From The New Daily. “Day after day we are seeing more signs that the housing-credit bubble is coming to an end, but also that low-income Australians are set to be hit hardest when it does. The latest report, from global accounting giant KPMG, shows that the poorest 20 per cent of Australian households have started leaping into negatively geared property investments ‘despite their inability to manage the financial risks.’ The report backs the long-held views of some economists and commentators, including this one, that Australia’s mania for property speculation will end in tears.”
“It notes: ‘…there is a fixation in Australia about growing wealth through investing in property. This attitude is reinforced in television shows we watch and the newspaper and magazine articles we read. It should not be surprising that the poorest in our society, who are exposed to these messages and who see others growing their wealth through investing in negatively geared property, also want to participate in this investment activity.’”
“Major media owners, whose very existence relies on advertising from the banking and real estate sectors, have promoted the property wealth machine so effectively, and it has grown so big, that it’s now on the verge of collapse.”
From Domain News. “Brisbane house prices have fallen this year, recording the largest quarterly drop since September 2011. SPACE Property West End principal Angus Commins said the past few weeks have been tough for sellers in the inner city suburb. Mr Commins said anecdotally, the market had been weaker than usual. ‘We got to a point to where we were pushing a million for that product and now that’s come down to about $850,000, $900,000,’ he said.”
