It Is Going To End In Tears
A report from The Business News Network in Canada. “A video of rapper Pitbull jumping and dancing on stage, surrounded by six dancers, isn’t an image one would typically associate with the property market. But that’s the first item showcased on the website of the Real Estate Wealth Expo, which will have thousands flocking to the Metro Toronto Convention Centre - one of the city’s biggest event venues - in early April. This year’s real estate spectacular has a celebrity speaker roster that includes actor Sylvester Stallone, former baseball star Alex Rodriguez and Dragons’ Den’s Manjit Minhas, while last year’s lineup featured well-known life coach Tony Robbins. A ticket for this year’s event costs anywhere between $149 to $5,995.”
“‘It’s your time to become a millionaire!,’ the expo’s website says, with flashy promises that attendees can learn how to flip properties, become top earners, hone a ‘millionaire mindset’ and even find out how to ‘use other people’s money to fund YOUR deals… regardless of your credit score.’”
“It comes at an inflection point in Canada’s largest housing market. Greater Toronto Area home sales plummeted 34.9 per cent year-over-year in February in the wake of several regulatory changes, according to the Toronto Real Estate Board. ‘I think the purpose of those seminars is more for entertainment than for anything else,’ said Hilliard MacBeth, an Edmonton-based financial advisor and author of the book When the Bubble Bursts: Surviving the Canadian Real Estate Crash. ‘This is to keep people’s spirits up, and given how sales of single-family homes in Toronto are down, cheerleading might be a difficult task this year and so people are choosing to concentrate on bitcoin.’”
From The Real Deal on Canada. “Some view the existence of McMansions as categorically bad architecture, but, whether deemed tasteful or not in the eye of the beholder, they will likely be the hardest hit if the city’s bubble bursts. The verdict comes from Canada Mortgage and Housing Corporation’s deputy chief economist, Aled ab Iorwerth, who told the Financial Times, that detached, well-located homes are already seeing pricing drops due to a string of cooling measures banks and government has introduced since April 2017.”
“Toronto’s market has been overheating for years and experts have been trying to warn buyers off what seems like an inevitable crash — ‘It is going to end in tears,’ warned one analyst in 2016. The measures are starting to have an effect: Knight Frank logged a 6 percent drop in prices for prime homes in the fourth quarter of 2017. The Toronto Real Estate Board also logged a 19 percent decrease in home sales last fall.”
From the Calgary Sun in Canada. “New home starts in Alberta in February were up slightly from January, but down noticeably on a year-over-year basis. An oversupply of new homes is another concern, particularly in the province’s two largest cities. ‘Many condo projects are just starting to break ground, which will add many more new homes to the housing stock,’ says the research team at ATB Financial in its Owl newsletter. ‘In fact, there are a growing number of newly completed houses that remain vacant in many of Alberta’s newer neighbourhoods.’”
From the Daily Mail on Australia. “Sydney’s housing bubble may be set to burst as prices fell by up to 30% in some suburbs. A steep fall in buyer demand, a crackdown on investor loans and a curbing of tax benefits are all reasons behind the drop, experts say. The drop, which is the largest since 2008, is a welcome relief for buyers looking to enter the world’s second most expensive property market, 9News reported.”
“The inner city suburb of Darlinghurst saw the biggest drop with buyers seeing a 30.6 per cent fall in some prices. Bellevue Hill also saw a massive fall with prices being 16 per cent cheaper and in Vancluse the adjustment was 13 per cent. Sydney’s southern suburbs of Sutherland and Alfords Point saw a drop in prices of 15 per cent respectively. Experiencing a smaller cut of 10 per cent were Narrabeen, Matraville, Cammeray, Tempe, Coogee, Mascot and Belfield.”
“CoreLogic’s Kevin Brogan says sellers should not be concerned as the market moves to correct itself. ‘At the moment it’s trending towards being a buyer’s market, but I think what we’re seeing is quite a gradual adjustment to the market,’ he said.”
“Compared to this time last year there are 25 per cent more homes on the market and there’s been a twenty per cent drop in buyers, industry figures reveal. Over the last fortnight the auction clearance rate dropped to just 56.1 per cent. At the same time last year 78 per cent of homes were selling.”
From News Nine in Australia. “The cracks are beginning to show in the Sydney property market, with the inflated prices from six months ago dissipating. It’s the steepest drop in a decade, with the average price of a home now priced at $880,743. CoreLogic’s Kevin Brogan said the tide was slowly turning. ‘I don’t think there’s any cause for panic,’ he said.”
“Auctioneer Sebastian Bonaccorso from Elders Inner West and agent Gavin Sanna successfully sold a three bedroom home at Earlwood today for $1.522 million. ‘I’m finding buyers who were able to borrow 1.5 last year can only get to 1.2 this year,’ Mr Sanna said.”
