Robbing People Of Significant Amounts Of Equity
CTV Vancouver reports from Canada. “In recent weeks, Vancouver Mayor Gregor Robertson has called for the implementation of a ’speculation tax’ on those who ‘flip’ properties for profit. He sent a letter to British Columbia Premier Christy Clark asking her consider such a tax, as well as to ask for additional power to track foreign ownership and monitor vacant homes in the city. The premier’s response — in a letter sent to Robertson — was less than favourable.”
“‘Industry experts estimate most of the real estate speculation taking place in the region is being done by local investors,’ Clark wrote. ‘For many individuals this is a source of investment income.’”
“For most people, a home is the largest investment they ever make, she said. Solutions to Vancouver’s affordability problem should not hurt the investments of those already in the market, she said. ‘If the goal of the policymaking is to lower the value of people’s houses, we will be — essentially — robbing people who already own houses of significant amounts of equity,’ Clark said.”
Smart Company in Australia. “Prime Minister Tony Abbott is spot on with his comments this week about house prices. He said on Monday he thought rising house prices were a good thing. It’s long overdue for someone in authority to make the point that for people who own homes, which means the vast majority of Australian households, rising property values are a good thing.”
“Most of us want property values to rise – and so does the nation. We’re all tasked with the challenge of providing for our retirement years amid a rapidly ageing population and a fragile Budget. The latest research figures suggest house values are going backwards in Darwin and Hobart, stagnating in Perth and rising only marginally in Canberra, Brisbane and Adelaide. Sydney, up 16%, has the only boom housing market. Apartments markets are falling in Perth, Hobart, Canberra and Darwin, and there’s no meaningful growth in Brisbane or Adelaide. Melbourne is up only 3%.”
“There’s nothing in those figures to support the notion of a bubble, nor the bleating of those who claim an affordability crisis, in contradiction of the situation described by the affordability indexes. It says something about the state of journalism in Australia when the Prime Minister can generate a media storm by commenting that rising property values are a good thing.”
ABC News in Australia. “Investigations are underway into 195 cases where foreign investment rules on residential real estate may have been breached, the Federal Government says. The widened probe into foreign investment in Australian real estate comes a month after the Federal Government announced plans to crack down on rogue foreign investors amid concerns it was helping to fuel a dangerous property bubble in Sydney and Melbourne.”
“The Government is also seeking to ‘capture any capital gain made on divestment of a property.’ ‘Third parties who knowingly assist a foreign investor to breach the rules will also be subject to civil and criminal penalties, including fines of $45,000 for individuals and $225,000 for companies,’ the statement warned. ‘Foreign investors who think they may have broken the rules should come to us before we come to them. They will still be forced to sell the properties, but will not be referred for criminal prosecution if they voluntarily come forward before 30 November.’”
The Herald in New Zealand. “The Government’s pre-Budget announcement of its 2-year ‘bright line’ tax on capital gains by property traders surprised a few people and was the major focus in the ensuing coverage. But the accompanying news that any non-residents buying property here would have to first open a bank account here, get an IRD number and then declare their own passport and home tax details when they bought the property may actually have more of an impact.”
“The Government is privately pointing to this measure as having the most potential to reduce some of the foreign demand for Auckland properties and Prime Minister John Key has indicated the information gathered on non-resident buying would be gathered and published. Mr Key made clear on the day after the announcement that New Zealand tax authorities would be happily sharing these details with foreign tax authorities too.”
“Mr Key was personally made aware of it by the most knowledgeable source in China — President Xi Jinping. Last November the Chinese leader asked for Mr Key’s help to track down a number of Chinese nationals who had fled to New Zealand with corruptly obtained funds. The elephant in the room of Auckland’s property debate is whether some of the money pouring into Auckland from China in particular is effectively money laundering of ill-gotten funds. Without any data, the debate is fuelled by anecdote and rumour, but it is an issue capturing more and more attention around the world.”
From CNBC. “Taiwan’s long-bubbly property prices appear headed for a correction, but it doesn’t look like bargain hunters will fill the breach. ‘Quite a number of buyers want to sell…(and) speculators have left the market already,’ said Cliff So, executive director at REPro Knight Frank, a property agency in Taiwan.”
“It’s quite a shift for what had become one of the world’s frothier property markets, with prices there nearly doubling since 2009. ‘The demand is still very strong. There’s not a match for the type of property,’ So said, noting that over the past couple years, developers have focused on large units of over 4,000 square feet. ‘For a small family, that’s too much for them.’ Investors are even having trouble leasing out those luxury units, So said, adding that he expects sharp price drops in that end of the market.”
“Indeed, REPro Knight Frank is launching a residential property agency in Taiwan, but that’s in large part to help local property investors look overseas instead. Taiwanese buyers have increasingly been looking outside their home market, buying around $1.63 billion worth of overseas properties in 2014, up 25 percent from the previous year.”
The Rio Times in Brazil. “The Brazilian National Monetary Council passed a resolution last week which will direct R$22.5 billion of reserve requirements towards farm and housing credit. Since the beginning of the year Brazil’s federal government has tightened housing credit to consumers. Without financing, homeowners have shunned away from the real estate market, and that has significantly affected sectors such as construction. According to CBIC more than 90,200 workers in the construction sector have lost their jobs in the first four months of the year.”
“Prices for real estate are also suffering. According to the Fipe-Zap index real estate prices across Brazil have fallen by 3.70 percent in real prices (when prices increase below inflation) from January through May of 2015. A survey conducted by news radio station CBN, based on data from the Labor Ministry, shows that 2015 has registered the worst April in ten years in the housing sector.”
‘A Bad Text to be displayed From the Real Estate Bubble Resurfaces’
‘During the heyday of the housing bubble, mortgage sellers made a killing via kickbacks. They often got bonuses for steering borrowers toward more expensive mortgages. But some mortgage sellers are reportedly still engaging in this practice.’
‘The latest examples come from two lawsuits recently filed by the Consumer Financial Protection Bureau.’
I ran into this about 3 years ago when I held my nose and made an offer on a flip because the location was ideal for me. The flippers tried to force me to use their sleazy mortgage and title companies and a quick internet search revealed that both had been fined millions for illegal kickbacks AND both were highly incompetent to boot. On top of this the flippers wanted to fine ME $100/day if the deal didn’t close in 30 days which is challenging even with competent mortgage and title companies.
Just read a story in my local paper on a similar scheme…
http://www.pressdemocrat.com/business/4045292-181/bay-area-based-rpm-mortgage-fined
I experienced this first-hand. Back in 2004, when I was buying the Arizona Slim Ranch, I worked with a local mortgage company.
The guy I dealt with really, really, REALLY wanted to put me into a subprime ARM. But I insisted on a 30-year fixed. That’s what I got and I still have it.
My insistence was met with what I can only describe as retaliation. Suddenly the paperwork processing slowed way down. And my real estate agent couldn’t get things to move any faster. He had numerous phone fights with the mortgage company.
And I resolved never to deal with them again.
Not that I could. Because a few years ago, that company got into big trouble.
Rent-to-own scheme that caught the attention of state regulators. Including a star witness who was shot dead in a Chick-fil-A restaurant. The shooter has never been found.
Any-hoo, my beloved mortgage company was put out of business by the State of Arizona. (Thanks, State!)
As mentioned above, I still have the same ole mortgage that made Mr. Missed My Subprime ARM Commission so mad. I have no idea what he’s up to these days.
Does Tucson make booking photos available on-line? Maybe you can find him there. There was a scandal here in 2008 when the Miami Herald reported that thousands of mortgage brokers and loan originators in Florida had criminal records, including convictions for armed robbery and cocaine trafficking. See below for an example of the relaxed attitude that prevailed at that time:
When state regulators showed up at Samantha Johnson’s mortgage company, she had already stolen her first house.
She had forged documents to fleece lenders. She had skimmed money off a customer’s loan. She had lied to conceal 19 questionable mortgages.
Florida regulators caught all of that, but they didn’t revoke her license or call for a criminal investigation.
Instead, they fined her $4,300 — less than the commission on a single mortgage — and made her promise to stop breaking the law.
Case closed.
http://tinyurl.com/n9oqt87
Our local media is quite good at putting booking photos online. Especially when they illustrate the latest hot story.
Best I can do for you on the mortgage company front is this link. Which has no pictures.
https://www.azag.gov/press-release/goddard-files-suit-against-massive-real-estate-fraud-scheme
‘The next day the Leader of the Opposition, Bill Shorten, asked Abbott in Parliament if he agreed with Fraser’s view. “Does the Prime Minister agree with his top economic adviser that there is a housing bubble in Sydney and parts of Melbourne?” It was a simple question, but Abbott’s answer was remarkable.’
“Millions of Australians have borrowed money to buy a house – millions of Australians have mortgages – and the last thing they want to see is a decline in the value of their most important asset. That is the thing. Why should members opposite be talking down our economy? Why should members opposite be saying that somehow people’s houses are worth too much?”
“That is what the Leader of the Opposition is saying. He is saying that people’s houses are worth too much. This is someone who wants to be the Prime Minister of Australia, and he wants your house to be worth less. The Leader of the Opposition wants your house to be worth less.”
‘Come again? The Leader of the Opposition wants your house to be worth less? Abbott used a logical fallacy to turn a question from Shorten, regarding Fraser’s opinion about a housing bubble, into a statement from Shorten that all houses should be worth less.’
‘He missed a genuine chance to talk maturely about a serious topic because he couldn’t resist scaring voters about the Opposition’s motives for asking such a question. It was pathetic argumentation.’
‘If journalists misconstrued something a source had told them as outrageously as that, they would be called a disgrace and sacked, but the Prime Minister did it with a smile on his face. It means political leadership is missing on the housing question, and national leadership has been left to the Reserve Bank, the Treasury and the Australian Prudential Regulation Authority, which can’t agree about the extent of the problem.’
‘Private economists are split on the issue too. It means we will have to keep riding the merry-go-round of housing bubble questions until our leaders decide to take them seriously.’
‘Australian banks are reining in their most profitable business after increasingly stern warnings from regulators that tighter mortgage lending standards may be needed to prevent a housing bubble in Sydney from destabilizing the financial system, according to an article in the South China Morning Post.’
‘The country’s four major lenders, Commonwealth Bank of Australia, Westpac Banking Corp, ANZ Banking Group and National Australia Bank, have all begun to tighten lending. The measures include stricter criteria to approve investor loans, cutting interest rate discounts and raising deposits on loans to up to 20 per cent from as little as five per cent just a month ago.’
‘This is a big shift for the Australia’s banks, which emerged from the global financial crisis to post record profits in recent years on the back of mortgage lending. Home loans account for 40 to 60 per cent of the major banks’ total loans.’
“If the regulators force the banks to slow investor lending growth and it isn’t offset by any significant pickup in owner-occupied housing or business credit, this will no doubt hurt revenue growth,” said Omkar Joshi, an investment analyst at Watermark Funds Management.’
Shutting the barn door after the horse has gone over the horizon…
‘Ms. Clark said she and her government are acutely aware of the issue of housing affordability in the Vancouver region and elsewhere in the province and are considering their options for dealing with it. “We are giving that some very serious thought and putting some hard work into working our way through that. I’d ask the member to make sure that he stays tuned,” Ms. Clark said.’
‘However, the Premier told the estimates debate she was concerned about making sure that any changes don’t have “unintended consequences” that “clobber” people, especially those with homes in Vancouver.’
“We want to make sure that whatever measure we’re able to take is one that’s fair and is one that respects the fact that people who have invested in their homes – many of whom will already have large mortgages – don’t see the government, without meaning to, take away some of their equity,” she said.’
The bubble in Vancouver is leaving plenty of unintended consequences and clobbered people in its wake, right now. Choosing who gets clobbered, and who receives a windfall, is a political decision.
Denver, CO Housing Prices Fall 10%
http://www.movoto.com/denver-co/market-trends/
At what point did the notion that rapidly inflating home prices were good for the children catch on with politicians the world over?
The children won’t be able to afford a house when they grow up, and they’ll be forced to rent, and renting is much better than being locked into a house and a mortgage.
and renting is much better than being locked into a house and a mortgage ??
Why ??
Because I can afford to live in areas I couldn’t afford to buy, I can move if I don’t like my neighbors, I can invest the money I save, I don’t have to worry about unforeseen expenses, I don’t have to do any yardwork or repairs, and most of all, I don’t have to worry about the huge loss I would take when this artificially inflated bubble pops.
“The children won’t be able to afford a house when they grow up, and they’ll be forced to rent, and renting is much better than being locked into a house and a mortgage.”
You don’t know this.
Just because it’s true now hardly means it will be true 20 years into the future.
Might very well be that renting in urban areas becomes as cost prohibitive as owning. It isn’t always an issue of which costs less, it sometimes is cost prohibitive, period.
Several cities may join the likes of San Francisco and New York today.
Young adults living in such cities will be able to do so by inheriting property, not by purchasing or renting it.
Such cities will be largely non-diverse, reserved for the privileged.
“Why ??”
For most people it’s because renting is half the monthly cost of buying at current grossly inflated asking prices.
Do most people rent the kind of unit they would buy? Seems like two different mindsets. I wouldn’t rent a whole house out in the country but might look for something like that if I were buying.
But it wouldn’t be something you’d rent?
The children have been monetized, 6 generations into the future.
Very correct. We’ve spent our present and future wealth, many times over, and for what?
To buy plastic Wal Mart crap from the Chinese, making them wealthy enough to colonize our country by buying real estate.
For what… most of it was to keep old people semi-healthy and generally fed and sheltered.
“Falling Gas Prices Could Reach 2009 Lows”
http://fortune.com/video/2015/06/02/falling-gas-prices-could-reach-2009-lows/
**** The reality is prices are likely to go far far lower . Housing too.
‘A foreign investor from the UK could be the second person forced to divest an Australian residential property following the Abbott government’s crackdown on home ownership rules in May.’
‘The Foreign Investment Review Board (FIRB) has 195 investors under investigation for potential breaches of the foreign investment rules regarding residential real estate. Of those, 24 are foreign investors who came forward voluntarily to flag they may have breached the laws.’
‘One of the foreign investors, from the UK, is negotiating with the government to divest a property purchased for about $700,000 in Western Australia.’
‘From 1 December, foreign residents who illegally invest in residential real estate face criminal penalties of up to $127,500 or three years’ imprisonment for individuals and up to $637,500 for companies. The government will also introduce a civil penalty to stop foreign investors capturing any capital gain made on divestment of a property.’
‘Third parties who knowingly assist a foreign investor to breach the rules will also be subject to civil and criminal penalties, including fines of $45,000 for individuals and $225,000 for companies.’
‘Following the transfer of real estate investigations from the Treasury to the Australian Taxation Office, inquiries have identified a foreign investor who appears to be linked to more than 10 properties ranging from a $300,000 unit to a house worth $1.4m.’
There goes that 6% commission, or whatever obscene per cent Australian realtors are allowed to skim off the transaction.
Regarding the subprime topic from yesterday:
‘07/17/14′
‘Over the last three months lenders issued 17,524 defaults to property owners who were seriously behind in their loan payments, said La Jolla-based DataQuick.’
‘Most of the loans going into default in the second quarter are still from the 2005-2007 period when the market was overheating.’
Most of the loans going into default in the second quarter are still from the 2005-2007 ??
Given the rebound in prices that is amazing…I wonder where they are concentrated…Vegas ?? Phoenix ??
That’s California.
Okay Ben…I did not read the link…Inland empire is my bet…
There is a place we go RVing once a year…Its in Chowchilla at a park called Pheasant Run…On a golf course…When we first started going there they were selling RV pads for like $300,000…Houses on golf course for $800,000. +…It all came crashing down in 2008…Its 8 years later…When I go out on the golf course all the same houses that have been 1/2 finished or vacant still sit their in all their weeds…Its Chowchilla for gods sake…Build it and the boomers will come ?? Did not work out that way…They still are not coming…
Biggest take away I have with it was just how loose money was way back then…10’s of Millions thrown around on a forward speculative bet…
‘In the coming months, the Merced County Planning Commission is expected to see a plan for a new housing subdivision in Planada, the first in about a decade, according to county officials. The area has seen some interest from investors, said Brandon Ruscoe, an associate broker with Merced Yosemite Realty in Merced, and the approval of a new subdivision would be good news for the area. He said many homebuyers who have been on the fence or who can’t afford prices in Merced would likely look at buying homes in Planada. ‘When inventory is tight like that, they end up competing with investors,’ he said.’
http://thehousingbubbleblog.com/?p=9061
“Inland empire is my bet…”
Where ever prices are highest. You know where that is.
Black Knight came out with their Mortgage Monitor yesterday, and a couple of pages are dedicated to parsing the delinquencies into different buckets.
One bucket is that there have been no prior actions to help keep the borrower in the home.
That represents 38% of loans that are currently 90+ days delinquent.
The rest of the 90+ day delinquent loans are one of the following:
Active trial modification (19%)
Failed trial (6%)
Failed repayment plan (11%)
Failed modification (19%)
Multiple failed modifications (7%)
These are national numbers.
And the millions of excess empty and defaulted houses held aside in foreclosure moratoriums?
Hiya Ben. So which definition of “subprime” did you decide on? I will not entertain any crow until you clarify your terms. Low FICO, non-amotized, no-doc, or some other type? Of course the article doesn’t define subprime — the media never did.
And those 2005-2007 loans were the no-safety-net loans.
[Background: I've been commenting that some new post-bust subprime-ish loans, even though they are 0% down, are not going to cause another huge bubble or bust. The new loans still have at least one safety net to provide a way for banks to at least break even. Ben thinks that I'm making up my own reality and my own history, and that the new subprime loans will fail anyway. We're going to track it.]
Pre-bubble, subprime (the low-FICO type) had a 14% default rate. We’ll probably go back to that level, or lower.
I didn’t know I was deciding. I guess I would say subprime is anything lower quality than prime.
I think the challenge is that what constitutes “prime” has changed as well.
“Prime” today is definitely of higher quality than “prime” of 2006.
It is? And why is that Rental_Fraud?
Very well then, how do you define Prime? FICO or fixed rate fully amortized mortgage?
This is my whole point. Concrete criteria make a huge difference. You can afford a house on a bad FICO, but you can’t afford a house on a low income.
And even if you have a low FICO and a low income, the bank will STILL give you a loan, IF you give them 20% down. They’ll just circle you like a vulture, waiting to poach that down payment cash the moment you miss a payment.
“You can afford a house on a bad FICO, but you can’t afford a house on a low income.”
The very fact that one finances for 15 or 30 years is the definition of unaffordable.
And many of these loans have been interest only over the last 10 years. Do you think people are really going to stick around 30 more years to see that balance sink to zero? I don’t either.
And haven’t we seen this movie before?
‘Once Tony Abbott has found a line, however stupid (the more stupid and divorced from reality the better one would think) he is loathe to let it go. When asked again about the issue he responded that Shorten asking about the risk of a housing bubble meant he was “saying to the homebuyers of Australia, ‘I want your asset to be worth less.’ That is what he is saying. He wants that asset—that they have invested their heart and soul in—to be worth less. That is what he wants”.
‘The Prime Minister then read out the RBA’s governor’s statement regarding price rises in Sydney and then suggested that Shorten wanted “to punish the people of Sydney”.
‘Oddly the Prime Minister failed to read out the RBA’s statement about working “to assess and contain risks that may arise from the housing market.”
‘But the stupidity of the Prime Minister infects those around him. Joe Hockey who had at least acknowledged the differences between housing prices and affordability, by the end of the week had fallen into line behind Tony Abbott like a sheep too cowered to offer a slightly different view no matter that it might be more intelligent.’
‘On Thursday, when asked about the performance of the economy he replied that “we heard that from the Leader of the Opposition earlier this the week. He was out there saying, ‘We don’t like that, those housing price rises in Sydney’. He’s opposed to that.”
‘At this point forget any suggestion that we might discuss policies such as removal of stamp duty, or negative gearing or public housing supply or median density housing that might actually have some impact on housing affordability.’
‘Nope. To express concern about a housing bubble – because you worry that it might burst and see housing prices plummet – is now to suggest that you want housing prices to fall.’
‘Political debate in this country has become infected with a virus of irredeemable stupidity. And judging from this week’s effort on housing affordability, the host of the virus is the Prime Minister.’
‘Average resale prices were down just 1.5 per cent from the previous May, driven by buyers shifting toward more affordable homes, the Calgary Real Estate Board reported. But so far it has been the market for high-end expensive homes that has borne the brunt of the region’s economic woes. Some multimillion-dollar homes are languishing on the market for months, advertising price cuts as steep as $700,000.’
Call the mounted police. They’ve been robbed.
‘As he sits here on a Thursday afternoon Bob Rennie knows he set a cat amongst the pigeons by delivering a speech hours earlier declaring the the single family home in Vancouver a dying relic of another era. He spent 175 hours researching the speech, which was delivered to more than 1,000 members of the Urban Development Institute, a group of developers, marketers, planners and lawyers who warm themselves at the grate of the region’s overheated housing market.’
“I think we are in trouble,” he said as he warned the assembled that the status quo is fuelling an affordability crisis that risks turning Vancouver into a drop-in resort destination for the rich—a place like Hawaii, where people invest in the real estate rather than the community.’
‘But to his thinking, his values have not strayed from his roots: the Vancouver home on East 5th Ave., which his truck-driver father bought for $7,500 back in the day.’
‘The path to affordability, he said, is densifying Vancouver, dumping the “sacred single-family zoning.” He knows he’ll be accused of self-interest, “a ruse to get more condos.” But with 60 towers in the pipeline to market, he has plenty of business, he says. He knows his idea would see mayor and council impaled upon the white picket fence of the Canadian dream.’
‘There are just more than 47,000 single homes hogging 56 per cent of Vancouver’s footprint. Their values have climbed past reason en route to insanity. “I think there should be a really healthy conversation about alternative forms of housing,” says the condo guy. “I say rezone the whole city to townhouse more as an instigator for conversation, but it’s not that stupid an idea.”
‘“Unless we start fast-tracking density, we will start losing families.” Even if Vancouver developers build three-bedroom units, he doubts families would stomach the $850,000 or $1 million they’ll cost.’
‘But what happens to a community if families flee to the burbs and schools shut? Rennie’s own former elementary school, Chief Maquinna, is at one-third capacity. How will he feel if it closes? He struggles with the question. People have to accept they can’t cling to the past and hold an iPhone, he says, a theme also explored in his speech. Interview over, he returns to the question. “If Maquinna School does close, it’s sad. But . . . ” Shrug. “I have an iPhone.” He heads for the escalator. There are deals to be done.’
“I think we are in trouble,” he said as he warned the assembled that the status quo is fuelling an affordability crisis that risks turning Vancouver into a drop-in resort destination for the rich—a place like Hawaii, where people invest in the real estate rather than the community.’”
__________________________________/
There are a lot of places that the housing bubble has turned into drop-in resort destinations. The theory appears to be that luxury consumption will be an adequate substitute not only for mass consumption, but for the entirety of civil society. I think that’s a recipe for elite hedonism on par with Caligula.
Good post.
I’m all for density. Cram more people in there so the places I want to live have fewer people.
+1. And I think it’s pretty funny that getting rid of single family homes is going to … drive families away. Is he expecting these families to live in 2 F-ing floating bedrooms of air?
Is he expecting these families to live in 2 F-ing floating bedrooms of air?
People do just that all over the world.
‘It’s enough money to buy Apple Inc. eight times over, or circle the Earth 250 times with $100 bills. The figure, $6.5 trillion, sums up the value created in just 12 months of trading on Chinese stock exchanges — and why some see a rally that’s gone too far.’
‘As China’s boom surpasses the headiest days of the U.S. Internet bubble, signs of excess are cropping up everywhere. Mainland speculators have borrowed a record $348 billion to bet on further gains, novice investors are piling into shares at an unprecedented pace and price-to-earnings ratios have climbed to the highest levels in five years. The economy, meanwhile, is mired in its weakest expansion since 1990.’
“We have a wonderful bubble on our hands,” said Michael Every, the head of financial markets research at Rabobank International in Hong Kong. “Of course, there’s short-term money to be made. But I fear it will not end well.”
‘Optimists are betting that China’s Communist Party will keep the rally going to help more businesses tap the stock market for fresh capital. Debt levels for Shanghai Composite companies reached the highest since at least 2005 in January.’
‘People’s Bank of China Governor Zhou Xiaochuan, who cut interest rates three times since November, has voiced his support for equity investment as a way to bolster the economy. “If the government endorses a rally, it will go up,” said Nicholas Yeo, the Hong Kong-based head of Chinese equities at Aberdeen Asset Management, which oversees about $491 billion worldwide.’
‘In the latest signs of weakness, data on Monday showed a 18.1 percent plunge in imports for May and a third straight month of falling overseas shipments. The Shanghai Composite slipped 0.4 percent on Tuesday as factory-gate deflation extended a record stretch of declines.’
‘So far, none of that has stopped mainland investors from pouring money into stocks. They opened a record 4.4 million new trading accounts in the final week of May, while margin debt on the Shanghai exchange climbed to a record on June 8.’
‘For Rabobank’s Every, it’s only a matter of time before the market falls back down to earth. “Too many people are making too much money, too fast,” he said. “It’s greed, fear of missing out, and willingness to suspend belief.”
“Too many people are making too much money, too fast,” he said. “It’s greed, fear of missing out, and willingness to suspend belief.” ??
They are gamblers…The emergence of Macau so rapidly was no surprise…The large card clubs with other table games around here are dominated by ethnic asians…I have had the same observation at many Indian Casinos in California…
$6.5 trillion could make a big dent in the US nat’l debt!
‘There’s something rotten about how Norway’s residential real estate market functions, according to a new study that shows how many buyers are subjected to extreme time and price pressure. Norway’s consumer council is now blaming real estate brokers for the limited property showings and heated bidding rounds that put prospective buyers into “a terrible situation.”
‘Supply and demand aren’t the only factors behind Norway’s high housing prices, soaring debt levels and all the complaints filed later when buyers discover serious problems with the homes they bought, according to consumer advocates.’
“We are extremely critical about the way home purchases occur today,” Thomas Bartholdsen, a director of Norway’s consumer council Forbruketrådet who specializes in housing issues, told newspaper Dagens Næringsliv (DN) on Friday. “There’s a shortage of time (built into the residential real estate market when properties are put up for sale) that can only be to the advantage of the real estate brokerages.”
‘There’s no question that Norway’s strong economy in recent years created a strong real estate market that has seen prices quadruple or more in the past 20 years. Prices in Oslo, for example, have recently risen at a rate of around 8 percent per year, and while there are signs the market is flattening out because of the oil industry slowdown, prospective buyers still flock to property showings and bid up prices.’
‘It’s the system attached to a showing itself, known as a visning in Norwegian, that is setting off protests from the consumer advocates. Showings typically last only an hour, and are often packed with rival buyers. Many brokers now also charge sellers for each showing in addition to their standard commission. That has led to single showings of many properties that in turn allow interested buyers very little time, in less-than-relaxed circumstances, to inspect the subject of what may be the biggest investment of their lives.’
‘DN reported earlier this week on a new study conducted by research firm InFact for the real estate brokerage Privatemegleren. It showed that fully 20 percent of buyers spent less than 30 minutes actually viewing the property they later bought. “We actually use less time to look at a house than we use to evaluate new kitchen appliances or a new car,” Privatmegleren broker Grethe W Meier admitted to DN. “There’s no logic in that.”
its cool to spout socialists drivel late in the game
flip what?
w markets at net zero local gov will be taxing hard to pay DB pensions
IL is the most screwed
you work ,they prosper
“Mr Key was personally made aware of it by the most knowledgeable source in China — President Xi Jinping. Last November the Chinese leader asked for Mr Key’s help to track down a number of Chinese nationals who had fled to New Zealand with corruptly obtained funds. The elephant in the room of Auckland’s property debate is whether some of the money pouring into Auckland from China in particular is effectively money laundering of ill-gotten funds. Without any data, the debate is fuelled by anecdote and rumour, but it is an issue capturing more and more attention around the world.”
____________________________/
Elephant in the room? Anecdote and rumor? You know it’s bad when China is willing to acknowledge that money is being laundered through foreign real estate, while the timid, captured Western financial media still pulls its punches.
And we all know how China is about losing face. Short answer: They don’t like to do that.
Texas - differnet this time?
I talk to Austin and Dallas and they seem immune to oil slump
QUE?
They’re lying to you.
Plano, TX Housing Prices Fall 15%
http://www.movoto.com/plano-tx/market-trends/
Inventory doubled since March.
how long before FR legal pressures zillow and movoto to pull negative numbers?
‘The Federal Treasurer Joe Hockey says that the Foreign Investment Review Board is investigating almost 200 suspect property deals but that this could be “just the tip of the iceberg”.
‘And while some economists are warning that overseas speculators might be driving a property bubble in Sydney and Melbourne, Mr Hockey is trying to defuse the “bubble” concerns.’
‘The Real Estate Institute of New South Wales is saying that some foreign investors may well have received bad advice and this could be put down to inadequate training of some real estate agents.’
‘But the Institute’s president Malcolm Gunning agrees with Mr Hockey’s “tip of the iceberg” analogy.’
‘MALCOLM GUNNING: I think Mr Hockey initially has gone for the low hanging fruit by citing a waterfront home. But the real issue lies really at the bottom end of the market, and that’s particularly the homes and the residential home units around the hotspots of Sydney, such as the Chatswoods, the Hurstvilles the Eppings.’
‘And down in Melbourne, Docklands and some of these areas, there’s quite a few of our well-known and well-established Chinese agents who are saying there’s an issue out there, here’s the problems, this is where it’s taking place.’
http://www.abc.net.au/worldtoday/content/2015/s4251500.htm
‘Tony Abbott wants house prices to rise and more affordability too. This is plain silly because you can’t have both.’
‘The governor of the Reserve Bank has repeatedly warned that asset prices can go down as well as up. Abbott has negated that warning, for one class of asset.’
‘If investors believe him they’ll switch out of risky assets such as shares and businesses into property. And those already in property will gear up further. Already, around 30,000 own five or more properties. Abbott has blown air into the bubble.’
‘Never before have we had a prime minister who explicitly backs higher house prices. Never before have we had one who effectively promises less affordable housing in the decades ahead and a greater proportion of the population forced to rent. Never before have we had one prepared to make an election issue out of it. “Do not trust this man with your house price,” he thundered against Bill Shorten last week. Shorten should respond in kind. Should we trust Abbott with house prices?’
http://www.canberratimes.com.au/comment/abbott-happy-to-blow–air-into-housing-bubble-20150608-ghimy1.html
‘London, England has seen its property values increase at an unsustainable rate in recent years, largely due to foreign investors buying at an alarming rate. It’s “a bubble that’s fuelled by an almost infinite supply of desperate global capital at the moment,” said Peter Rees, who was the City of London’s city planning officer for nearly 30 years. That sounds familiar, doesn’t it? Until recently foreign owners were exempt from paying capital gains tax when they sold a property. (How very polite of those lovely Brits.) Some of the recent proposals made by mayoral candidates in London include an increased capital gains tax for foreign buyers, as well as an extra tax for properties that are left vacant.’
‘I don’t think anyone in Vancouver has a major issue with foreign ownership of properties. The main issue most residents have is when the homes are left vacant. Walk along Kits beach and you’ll see beautiful million dollar homes next to homes that look like they are occupied by raccoons. They are left vacant by the owner and are rapidly deteriorating due to being left unmaintained.’
‘Coal Harbour is one of the densest areas in Vancouver when it comes to condos, but go outside at night and there is barely anyone on the street. Why? Because more than half the units are unoccupied. It’s left the neighbourhood cold and faceless with few amenities available for the residents who actually choose to live in their homes.’
http://www.vancourier.com/opinion/opinion-double-property-taxes-for-vacant-properties-1.1963214
‘Hovnanian Enterprises Inc. posted a quarterly loss that was wider than expected, sending the shares down as New Jersey’s biggest home-based home builder was hurt by weaker margins.’
‘For the period ended April 30, Red Bank-based Hovnanian reported a loss of $19.6 million, or 13 cents a share, compared with a loss of $7.9 million, or 5 cents, from the same period a year ago. Revenue rose 4.2 percent to $468.9 million.’
http://www.northjersey.com/news/business/hovnanian-losses-widen-1.1351964
Ms Clark “relying on industry experts”(joke) - the mayor is right - tax the flippers, and not only in Vancouver but in Toronto too.
The worst hit area is West Van on the hillside. Houses are 2.5 million - totally out to lunch. Tops should be 1.0.
She should remember that only a few houses have sold at those prices and by reflecting reality she would be more concerned about the future.