Prices Are Just Falling, Falling And Falling
A report from Mansion Global on Canada. “Vancouver’s luxury markets may further cool in 2018 if the city’s proposed measures to quell its housing affordability crisis take effect. Among the measures in the new strategy are: Increasing the tax rate on luxury homes. Imposing a speculation and flipping tax. Closing capital gains tax loopholes. Restricting foreign buyers and investors. To Anne McMullin, president of Urban Development Institute, blaming foreign buyers for Vancouver’s housing crisis ‘is not productive,’ as they account for less than 5% of total residential real estate purchases in British Columbia. ‘Telling them they are banned from buying a home and can only rent in a city that has had a chronic less-than-1% vacancy rate for some years seems discriminatory,’ she added.”
“In terms of luxury properties, during the first seven months of 2017, sales of C$1 million-plus (US$780,000-plus) homes declined 22.5% in Vancouver year-over-year, according to a RE/MAX report in September. For homes over C$3 million (US$2.33 million), the number of sales from January to July dropped 40% compared to the same period last year, the firm’s latest data show.”
From Reuters on Sweden. “Swedish home prices fell for the third month in a row in November, the Nasdaq OMX Valueguard-KTH Housing Index index showed. Worries about sky-high prices, a barrage of media reports about the risk of a crash and a realization that ultra-low borrowing costs will not last for ever have spooked buyers in recent months. A glut of new-built apartments - particularly in the major cities - has also helped to push down prices and draw a line under a culture where it was not uncommon for buyers to purchase apartments without even having seen them in person.”
“‘In the past, people … took a longer time buying a pair of shoes than a home,’ Hans Flink Head of Sales at Svensk Maklarstatistik, an association of Swedish real estate agents, said.”
“Worried that prices would fall further before his family could sell their apartment in town, Carl Arnesson, a 37 year-old economist, recently backed out from buying a house in the up-market Stockholm suburb of Bromma. Prices are just ‘falling, falling and falling,’ he said. ‘Our main worry was - what will we get for our present home?’”
From Bloomberg on Sweden. “Stockholm’s property market is falling. Home prices in the capital have already slumped about 9 percent over the past three months, but probably have further to drop, according to the state-owned mortgage bank, SBAB. ‘The aggregated price data for Sweden as a whole may not look so dramatic, but there are things happening in central Stockholm and in cities such as Uppsala and Orebro where there is an extra large supply of newly built apartments,’ SBAB Chief Executive Officer Klas Danielsson said. ‘Prices in Stockholm city are now down about 10-15 percent, and may well drop another 10 to 15 percent.’”
From the Independent on the UK. “UK homeowners desperate to sell their property in a slowing market have slashed their offer price by an average of £25,562, according to property website Zoopla. An analysis of house price data across its website for November reveals that 35 per cent of properties on the market had been marked down, with average prices in London being cut by more than £50,000. Kensington and Chelsea was the most discounted borough in value terms, with prices knocked down by £129,559 on average – representing 7.9 per cent of the total property price.”
From News.com.au in Australia. “Sydney tenants can look forward to a discounted lease on life with rents tumbling across the city’s east, west and north and remaining static everywhere else. For the first time since the Global Financial Crisis of a decade ago, increased supply and changing regulation have given tenants the advantage in what was a tight and highly competitive market. Economists expect the falls to continue as the stream of newly built homes that have been sold to investors off the plan hit the market next year, giving tenants a greater choice of homes.”
“Falls in advertised rents were most pronounced in Harbourside suburb Darling Point, where the median rental price fell 22.7 per cent over the past year, the research showed. The median weekly rent in the suburb had been $2200 at this time last year but has since dropped $500 to $1700. Landlords have also been slashing rents by about 21 per cent in Penrith enclave Llandilo, as well as in Box Hill further north.”
“SQM Research director Louis Christopher said landlords were under increased pressure to offer more attractive rents because the risk of their homes becoming vacant had risen following rampant levels of investor buying over the past four years. ‘It’s a good time to be a tenant right now,’ he said. ‘It’s likely there will be further adjustments in prices in certain pockets, especially where there has been a high concentration of new home building like in the Hills (District),’ he added.”
The West Australian. “Civil and mining contractor Brierty counted on sales of Darwin residential lots to keep trading before a property market slump helped trigger its financial collapse, according to administrators. Brierty owed land development subsidiary Bellamack about $14 million when it went under in September, according to a report by its directors. The drying up of lot sales at the Bellamack development was among reasons cited for the contractor no longer being able to meet its financial obligations.”
“In discussing the outcome for the insolvency process, Administrator Matthew Woods of KPMG said, under a liquidation scenario, it was unlikely there would be a payment for unsecured creditors, with the potential exception of any litigation proceedings. Directors have reported the Dalton Gooding-chaired Brierty owed unsecured creditors about $27 million. Former employees were owed about $7 million in unpaid entitlements.”
