The Housing Bubble

It’s Friday desk clearing time for this blogger. “As the market slows, the sale-of-home contingency has escaped extinction. In the real estate environment that Nashville has experienced over the past five years, one of the major issues facing sellers was how to schedule the move when the house sold. Until now, once a house was listed, it sold and the buyers wanted to move in – NOW! Now listings are aging, and offers that are contingent on the buyers selling their current residence are floating into sellers for review. The question that sellers should consider when receiving an offer containing a sale-of-home contingency is whether the home of the buyer is more sellable than the owner’s current residence.”

“Some things to consider would be area – location, location, location – and price, as overpriced houses are resting these days. The seller may continue to market the home, and if the seller receives an acceptable offer, the buyer with the sale-of-home contingency has a certain period of time – usually 48 hours – in which to remove the sale of home contingency or risk losing the house. After the seller allows the house to go to the new buyer, that person may read later that the house sold for $15,000 less than their contract. They thought the offer had to be better than theirs in order to put them on notice. In fact, the offer merely has to be acceptable.”

“After years of going up, rents in Boston’s superheated real estate market may have finally reached a peak. Data released Thursday show that apartment rental prices fell slightly at the end of 2016 — the first drop since 2010 — amid a surge of new buildings that have opened in Boston and neighboring cities such as Cambridge, Chelsea, and Somerville. It was the latest and clearest sign that the flood of construction in Boston is putting a lid on prices, at least at the upper end of the market.”

“‘When you put that much supply on the market, you’re going to disrupt the equilibrium,’ said Sue Hawkes, chief executive of Collaborative Cos. a real estate marketing firm in Boston. ‘That’s what’s happening.’”

“The controversial Yard apartment complex on Portland’s northeast waterfront is again making headlines. Renter advocacy groups are crying foul amid news the developer is renting out an entire floor of the building to a vacation rental company. When asked if removing available units from the supply chain was preventing the landlord from lowering rent, Vacasa’s Chief Development Officer Cliff Johnson said he didn’t think so, simply because there just isn’t enough demand to fill all of the units.”

“‘There were still a lot of vacant units in the building, even after we rented that floor,’ Johnson said.”

“After years of painful increases, the cost of renting an apartment in most Bay Area cities has hit a plateau. Andrew Woo, data scientist for ApartmentList.com, attributed the cooling to three factors: the construction of thousands of units of new housing for renters around the region, the typical seasonal slowdown in rent growth at year’s end, and the fact that ‘the market has already gone up so much that it can’t sustain any more rent increases. After a couple of years of scorching rent increases, rents are stabilizing or actually declining in many parts of the Bay Area.’”

“The number of residential property sales in the greater Vancouver region fell by 5.6 per cent in 2016 — including a nearly 40 per cent year-over-year plunge in December alone. ‘The spate of federal and provincial measures has seen the Vancouver market temporarily freeze in its tracks, as buyers and sellers both try to assess the implications for valuations ahead,’ said Avery Shenfeld, chief economist at CIBC Capital Markets.”

“The popular claim that home prices double every 10 years has become a myth, with only Sydney delivering on that promise in the past decade. Forecasters say no city will grow this much in the coming 10 years. Metropole Property Strategists chief executive Michael Yardney said property markets would be fragmented in 2017 depending on local economic strength and supply and demand. ‘The elephant in the room is the huge oversupply of new apartments being completed in Brisbane and Melbourne,’ he said.”

“There is no need to cite statistics to show housing prices in China’s big cities have been too high for ordinary people to afford. Just ask people around you if they are financially strong enough to purchase a new apartment in Beijing or Shenzhen, and most of them will shake their heads suggesting ‘no’ and might even stare at you as if to ask in response, ‘why do you ask such odd questions?’”

“The country’s top leaders are aware of this reality. And that’s why during the recently concluded Central Economic Work Conference they issued a warning, ‘homes are for residential use, not speculation.’ The public, however, might not be fully convinced about the effectiveness of these policies, because many people have got disillusioned over the past decade by the continued rise in housing prices despite policymakers’ repeated pledge that it would be stopped. And if after several months of lull, housing prices in big cities start rising sharply again sometime next year, public grievance would grow and few would continue to believe in the promises of the government.”

“Therefore, the real estate regulation this time is not just a mere economic task, but a must-do political exercise that has much bearing on public confidence in future policymaking of the government. In the eyes of policymakers, the battle to control housing prices is one that cannot be lost. The housing fever has caused serious problems that could trigger a snowballing effect.”

“If housing prices continue to rise at a fast pace, then the bubble in the property market may burst, and China will have to tackle not only a real estate implosion, but also the eruption of a wider financial crisis. As top Chinese leaders participating in the Central Economic Work Conference said, the country must ‘put more priority on prevention of financial risks’ and ‘make efforts to prevent and control asset bubbles’ to ensure no systematic financial risks occur.”

“Financially troubled Miami Heat legend Glen Rice and his ex-wife, former ‘Real Housewives of Miami’ standout Cristy Rice, are engaged in a real estate race against the clock. They are desperately trying to sell their downtown Miami condo before the highrise’s commandoes seize it. The Rices, who are co-owners of a two-bedroom crib on the 27th floor of the Neo Vertika building listed the place for sale a year ago for $460,000, records show.”

“But the Rices have had to lower the price practically on a monthly basis since then, according to MLS listings. Their latest asking price is $330,000, for a condo bought 11 years ago for $317,000. At the time, in 2006, Rice was just two years into retirement after 15 seasons in the NBA — where it is estimated he made $35 million. He was voted to the All Star Game three times and played forward for the Heat from 1989 until 1995.”

“Now, however, Rice, 49, is so broke after losing his fortune in bad investments, his contentious divorce from Cristy and paternity lawsuits that a Miami court recently agreed to reduce his child support payments to a former galpal to $600 from $1,500 a month. The paperwork in that case described how Rice makes a few thousand dollars a year from appearances, memorabilia-signing events, basketball camps and tutoring well-to-do kids in basketball.”

“Which could explain why he and Cristy are accused of being more than two years behind in their $675.50 or so monthly fees at the edgy-looking Neo Vertika. At this point, the condo association’s complaint says the Rices owe nearly $20,000 in unpaid fees, interests and penalties. The association has asked the court to order the condo sold in foreclosure.”

A report from Bloomberg on New York. “Manhattan resale home prices tumbled by the most in more than four years, a sign that sellers are lowering their expectations in a slowing market where buyers have the option to walk away. The median price of previously owned condominiums and co-ops fell 6.3 percent in the fourth quarter from a year earlier to $900,000, according to a report Wednesday from appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. It was the first annual decline since the beginning of 2015, and the biggest since the third quarter of 2012, when resale prices dropped 8.1 percent.”

“‘Maybe we’re heading out of the period when there was no shame in overpricing your home,’ Jonathan Miller, president of Miller Samuel, said in an interview. ‘We’re moving away from that and into something more pragmatic: Do you want to actually sell your property or do you want to pretend? Part of selling is pricing correctly or being more negotiable.’”

From DNA Info. “Apartment bidding wars in Manhattan were at their lowest level in four years, according to a market analysis from Douglas Elliman. Drilling down into the data, bidding wars were less common for pricier markets. New developments, for instance, saw no bidding wars. ‘Increasingly, as the year went by, buyers possessed the upper hand; they balked at overpricing and waited sellers out,’ he wrote in his own market report. ‘On the listing side, 2016 was a year of price drops, often multiple, to position the subject properties for sale in the changed marketplace. While the year began with sellers firmly in charge of the market, December saw almost every sale negotiated, often from prices which had already been reduced several times.’”

“While the median price in Manhattan declined overall, the average sales price still hit a record high, reaching $2.098 million. It was up nearly 8 percent over the past year, according to Elliman data. But real estate expert Jonathan Miller, who authored the Elliman report, didn’t believe this accurately reflected the current state of the market since these sales included contracts that were signed a year or two ago in ultra-luxury new developments, but only closed last quarter when buildings were completed.”

“These ‘legacy’ contracts, as he calls them, propped up the prices. More recently, some luxury developments have been dropping prices, he added. ‘When a market like the super-luxury market is quiet, it’s not that the demand is gone, it’s that the demand at prices set at 2014 is not there,’ Miller said.”

From Forbes. “Swelling inventory and thinning demand are continuing to take a toll on Manhattan’s real estate market, several quarterly reports show. The drop-off is particularly acute at the top end of the market as developers of new luxury projects that now populate the skyline rush to cut deals in an effort to unload languishing units. The upper end of the market endured more softening with the median price on more expensive co-ops falling sharply. The median price of three-bedroom co-ops sold in the final three months of 2016 was $2.24m, down 12% from the same period in 2015, the Elliman report said. Sale prices of co-ops with four or more bedrooms were down 13% to $4.81m in the fourth quarter of 2016 from the same quarter in 2015. ”

“‘The paradigm shift with the Brexit vote combined with the uncertainty of the outcome of our election clearly put a damper on the transactional pace in the 4th quarter,’ says Robert Dankner, president of Prime Manhattan Residential.”

“Few real estate markets in the U.S. have enjoyed a sharper rise the past few years than Manhattan, where the average price of a home stands among the highest in the country. But despite a few record-shattering purchases, New York’s priciest borough is in the throes of a softening at the very high end as a glut of expensive condominiums floods the market and demand for top-tier properties taper off.”

From Curbed New York. “Brown Harris Stevens’ report pointed out some market changes in particular Manhattan neighborhoods. On the East Side, median prices for one and two bedrooms dropped slightly (to $722,500 and $722,500, respectively) while studios and three+ bedrooms rose (to $400,000 and $3.33 million). On the West Side, all sized apartments saw an increase in median price except three+ bedrooms, which experienced a 20 percent decline to a median price of $3.37 million.”

“Between 34th and 14th Streets, studio and one bedroom median prices decreased slightly (to $535,000 and $920,000) while two bedrooms increased 3 percent to $1.497 million. South of 14th Street, median prices were essentially unchanged except for two bedrooms, which had a 14 percent decline to a price of $1.7 million.”

From The Real Deal. “The average luxury sale price was nearly 9 percent less than the asking price at the time of contract, nearly twice as big of a discount seen in the previous year. ‘It’s a clear break from the somewhat irrational behavior of sellers from the previous three or four years,’ said Jonathan Miller, CEO of appraisal firm Miller Samuel.”

A report from KJZZ in Arizona. “The short-term outlook for the Valley’s apartment market may be more attractive to renters than investors. Rent growth in the Phoenix market peaked in May 2016. That’s when the average rent jumped more than 8 percent from May 2015. Nick Fitzpatrick, an analyst with Axiometrics, said pent-up demand and job growth led developers to build about 6,800 new apartments in the Phoenix market last year. He expects about 6,500 new units this year, along with slower rent growth. ‘The amount of new supply that’s coming in isn’t really out of the norm for Phoenix during other cycles so I don’t think there’s any fear there that we’re going to see a bubble burst,’ he said. ‘That demand is still there so I think Phoenix is going to be okay.’”

From Twin Cities Business in Minnesota. “The past few years have been good ones for commercial real estate in the Twin Cities. But some signs indicate that the pace of deals is starting to taper. Some brokers in all sectors are seeing signals of caution. ‘We’ve seen kind of across-the-board slowdown in activity in the second half of 2016,’ says Steve Shepherd, a vice president with the Twin Cities office of Colliers International. ‘I think we’re seeing signs on the street that it’s slowing down even on [Interstate] 394, which was one of our hottest markets.’”

“Shepherd says that he’s hearing similar reports from his Colliers colleagues nationally. He notes that he’s seen both job growth and business confidence start to soften.”

From Bostinno in Massachusetts. “Good news, you savvy urbanite, you: Compared with the beginning of January 2016, median one-bedroom rent prices in the Greater Boston area are actually down a whopping 5.9 percent. According to Zumper’s national rent report for January 2017, the median price for a one-bed in these parts is now $2,250 per year, down 5.9 percent compared to last January, while a two-bedroom apartment will cost you about $2,600, down 2.3 percent year over year.”

The Miami Herald in Florida. “Good news, renters: It’s getting cheaper to live in downtown Miami, as developers deliver a bounty of new condos and rental apartments in 2017. In 2017, developers are expected to complete nearly 6,350 condo and rental apartment units, the most in a single year during this real estate cycle, according to the DDA. (For the first time, the majority of those units are rentals, reflecting Miami’s rapidly cooling condo market.) Developers already delivered more than 4,700 units in 2016.”

“In other U.S. cities, big jumps in the number of luxury apartments are leading to over-supply — and good deals for renters. According to the Wall Street Journal, landlords in New York City, Los Angeles and Houston have begun offering perks including several months of free rent, free parking and no security deposits. ‘Landlords are trying to retain tenants because [tenants] now have these new options,’ said Anthony Graziano, of Integra Realty Resources, who authored the report. ‘It’s going to be a renter’s market in 2017.’”

The Pittsburgh City Paper in Pennsylvania. “Pittsburgh’s luxury-housing boom will grow tired like a mule after a long day plowing the fields. It might not feel like it, with 1,500 luxury units under construction and slated for construction in 2017, but the apartment and condo boom that has taken over many city neighborhoods is headed for a cooling-off period. In fact, we predict luxury apartments could go out of style faster than whale-blubber torches after that Edison fellow invented the light bulb.”

“John Petrack, of the Realtors Association of Metropolitan Pittsburgh, says that while many new homeowners and renters moving to Pittsburgh are fancy chaps with large salaries, developers ‘probably over-developed’ luxury rental units over the last several years. ‘In terms of high-end rentals, because of the number of units online, that will become a relatively soft market,’ says Petrack. As a result, many of the luxury units will lower their rents or offer incentives to attract residents, according to Petrack.”

From BusinessDen in Colorado. “BusinessDen surveyed 23 large apartment buildings, 17 of them in 2015 and 2016, totaling about 6,300 units. Many apartments in the survey are part of the residential building boom sweeping the city over the past three years. Some landlords are pitching real deals; five of the 17 buildings polled twice, in 2015 and 2016, decreased effective rent. In Golden Triangle, for example, The Acoma used to be the only high-end apartment tower. In 2015 it rented one bedrooms at $1,945 a month and laughed at any prospects asking about a discount. Now it competes with the new 1000 Speer, called The Joule before it sold for a record price per unit.”

“Both towers have caved into doling out specials. The Acoma is offering a free month of rent, causing effective rent to drop 11 percent to $1,725 per month. At 1000 Speer, which claims it is 70 percent leased, the deal on the table for renters this December is far better than last year: one and a half months free, plus a $150 break on fees and three months of free parking. Effective rent comes out to $1,562 a month, even leaving the parking perk out of the equation. Compared to a new renter at 1000 Speer last year, a new renter today would have saved $450 in 2016.”

“The only other building to drop effective rent by more than 5 percent was 2785 Speer, a gargantuan complex with 332 units that towers over Speer Boulevard at the edge of the Highlands. That building dropped effective rent 9.5 percent in 2016. The march of new construction goes on in central Denver. At least 5,000 more units in central Denver are set to start leasing in the next two years, by a BusinessDen tally. Those new units pose competition for established properties, says Jonathon Papsin, a real estate broker at Colorado & Company who specializes in residential leases at high-end properties downtown and in Cherry Creek.”

“‘I struggle with understanding where rents are headed right now,’ Papsin said. ‘But base rents will have to come down, just because Denver wages haven’t kept up with rental raises.’”

From KPBS in California. “San Diego rent prices continued to go up last month, but the speed of that climb has slowed significantly. ‘San Diego saw really large rent increases in 2015 and early 2016 — in the order of 6 to 8 percent over a year ago,’ Woo said. ‘But starting in the middle of 2016 and continuing through this past month, those actually dropped quite a bit.’”

A report from the Calgary Herald in Canada. “Like many ends of the Calgary area residential market, the home ownership program through Attainable Homes Calgary Corp. recorded a dip in activity in 2016. The program offers homes for down payment of $2,000. Applicants must qualify for a mortgage and not earn more than $80,000 annually. People with dependent children can earn up to $90,000. Attainable purchases housing inventory at reduced prices from builders interested in giving back to middle-income Calgarians. There were 92 sales between Jan. 1 and Dec. 19 this year, down from 155 during the same period in 2015. Possessions eased to 96 from 208.”

“‘I’d say it’s the economy,’ says John Harrop, Attainable’s CEO. ‘I think, fundamentally, consumer confidence is down, so people are taking longer to make home ownership decisions.’ Moreover, vacancies in the city are up and rents are down, he adds. ‘On top of that, although it only affected the last quarter, the new mortgage rules have significantly made it harder for our purchasers to buy,’ Harrop says. ‘It affects their buying power by about 20 per cent.’”

The Aberdeen Journal in the UK. “Aberdeen is the biggest faller in a leading lender’s review of UK house prices in 2016. Aberdeen’s average house prices are down by 6.9% on a year ago, at £203,425, according to Halifax. The city’s weaker market was highlighted by Church of Scotland officials recently knocking thousands of pounds off the asking price of a mansion in Rubislaw Den South that was expected to become Scotland’s first £1million-plus manse.”

“Bob Fraser, senior property partner at Aberdeen-based law firm Aberdein Considine, said the figures reflected a ‘tough year’ for sellers in the north-east. ‘As with any market, 2016 has been about supply and demand,’ Mr Fraser said, adding: ‘There is a lot of supply because a number of people leaving the area because of work commitments elsewhere. As a result, demand has been suffering.’”

The Gold Coast Bulletin in Australia. “The first cracks leading to the collapse of Wayne Cullen’s building company which threatens to wipe out some Gold Coast subbies began appearing on Brisbane sites 12 months ago. As liquidators begin the voluntary winding up of Cullen Group Australia, subbies working on a $100 million Boheme development just south of the Robina Town Centre want to know what went wrong. Some of the 300 subbies estimate they are owed up to $130,000, others predict millions of dollars will be lost, comparing the financial crash to the Titan’s Centre of Excellence dispute which left construction players bankrupt.”

“‘This hasn’t happened overnight,’ An industry insider close to the company said. ‘The only reason they haven’t been held to task is developers (on other sites) haven’t wanted anyone to say anything.’”

The New York Times. “Aruba, one of the few Caribbean islands generally considered outside the hurricane belt, has struggled to recover from the global real estate crisis of 2008, when home prices fell anywhere from 15 percent to 40 percent, though there have been some gains in recent years, agents said. ‘The market was doing very well until this year,’ said Garrick Hasham, an agent with Aruba Sotheby’s International Realty. ‘The real estate market has slowed down in 2016, and we’ve noticed it at all the real estate offices on the islands,’ which also include nearby Bonaire and Curaçao.”

“Compounding problems have been an ongoing recession in neighboring Venezuela; a loss of value in the Canadian dollar; and the recent presidential election in the United States, which has prompted potential home buyers to hesitate, agents said. Those three countries supply the bulk of foreign home buyers in Aruba, they said. Aruba is ‘very much a buyers’ market now,’ said Walter Zephirin of Seventh Heaven Properties. The average price per square foot in Aruba is roughly half that of luxury destinations such as Anguilla or Turks and Caicos, he said.”

A report from the Wall Street Journal. “America’s luxury-apartment craze is coming to an end. Landlords of upscale properties in cities across the U.S. are bracing for rough conditions in 2017 that will likely force them to slash rents and offer deep concessions, including as many as three months of free rent, to attract tenants. The turnaround comes after a seven-year boom during which apartment rents have risen more than 26%, far outstripping inflation and income growth. The slowdown, said Jay Parsons, vice president for MPF Research, is being driven not by a pullback in demand but rather a flood of new supply. More than 50,000 new units were rented by tenants in the fourth quarter, six times the number in the year-earlier period. But that demand was overwhelmed by the 88,000 new units that were completed in the quarter, the most since the mid-1980s, according to MPF.”

“Nationally, more than 378,000 new apartments are expected to be completed in 2017, almost 35% more than the 20-year average, according to real estate tracker Axiometrics Inc. Most of the new construction in recent years has been on the high-end. Of 189,100 multifamily rental units completed between the fourth quarter of 2015 and the third quarter of 2016 in 54 U.S. metropolitan areas, 84% were in the luxury category, according to CoStar Group Inc., a real-estate research firm. For apartment units currently under construction, renters would need to make at least $75,000 a year to afford 88% of those units.”

“Benjamin Gable, a 31-year-old advertising copywriter, recently scored a $200-a-month discount on 1.5-bedroom apartment in Brooklyn’s trendy Greenpoint neighborhood. The apartment was originally listed for $2,700 and had sat on the market for six weeks, according to Rich Cassell, Mr. Gable’s real-estate agent. The landlord had already dropped the price to $2,500 and Mr. Cassell negotiated it down again to $2,300. ‘There’s just so much that has hit the market, it is oversaturated with high-end luxury,’ Mr. Cassell said.”

The Real Deal on Florida. “Miami’s real estate market experienced the first wave of a slowdown in condo sales at the start of 2016, with some experts warning it could lead to a recession by the end of the year. Twelve months later, South Florida real estate didn’t implode, but the industry is beginning to feel the pinch of a bear market. In downtown Miami, a saturation of projects marketed to buyers looking for units as investments has created too much inventory, said Dan Kodsi, developer of Paramount Miami Worldcenter and Paramount Bay.”

“Ezra Katz, founder and CEO of Aztec Group, said he foresees construction financing slowing down dramatically next year. ‘Underwriting standards are changing and lenders are becoming more conservative,’ he said. ‘Lenders have a lot of loans on their books. I think projects that are contemplated as new construction and have not been financed will find it very challenging, particularly the Johnnies-come-lately or new kids in town.’”

From The Thrillist. “As soon as he walked through the door, Matt Semmelhack knew it was over. He’d been away from his San Francisco restaurant AQ for less than a week, but when he got back, it just felt different. It went beyond the usual concerns of the modern restaurateur. ‘I wasn’t worried the lights were properly dim, or the regulars were in the right booths,’ he says. Instead, Semmelhack was just looking at his staff — and all he could see was the money each one of them was costing him, flashing in front of him like a video-game score. ‘I knew right then,’ he says, ‘we had to shut it all down.’”

“Semmelhack is not the only restaurateur looking to duck and cover. The American restaurant business is a bubble, and that bubble is bursting. I’ve arrived at this conclusion after spending a year traveling around the country and talking to chefs, restaurant owners, and other industry folk for this series.”

“In the restaurant world, rent always sucks. In Miami, Michelle Bernstein’s Cena by Michy helped rebirth the MiMo historic district but was forced to close this year, after the landlord attempted to triple the rent. And even Danny Meyer had to close and move Union Square Cafe in New York, which, since 1985, had served as one of America’s culinary landmarks, when he couldn’t rationalize paying the huge rent hike the landlord proposed.”

“Thanks to its dubious location, AQ didn’t really have a rent issue. And in 2013, it actually increased its revenue, pulling in $3.1 million. But despite making $200K more than it had the previous year, its net profit was $50K lower, as costs continued to creep up and up. What started as $250K profit and an 8.5% margin in 2012 was down to $40K and 1.5% by 2015. Because it had to pay off $42K in Small Business Association loans each year, this meant negative net cash flow for 2015.”

“Then came 2016. In 2016, AQ’s projected revenue was $1.6 million, down a million dollars from the year before. They went from doing 240 covers (dinners served) per night at their peak to around 100 this past year. Naturally, there were a lot of factors at play. Maybe it’s because there were 3,600 restaurants in SF when it opened, and now the SF Environmental Health Department puts that number at 7,600. Maybe the physical and mental toll of running an aspirational sit-down restaurant for five years was just too much.”

“Whatever it was, with losses of around $250K and a 40% drop in revenue, AQ will serve its last meal sometime in January, 2017.”

A weekend topic on two papers, the first by Graeme O’Meara at the Economic and Social Review. “Abstract: This study contributes to the ongoing debate over the causes of housing bubbles. The argument that excessively low interest rates were responsible for the rapid increase in house prices over the last decade has received considerable attention in the literature. However, few papers have attempted to quantify the extent of house price overvaluation in countries that have seen housing booms and busts, in addition to quantifying the looseness of monetary policy. For a sample of 10 OECD countries, we estimate fundamental house prices using demand and supply side characteristics of the housing market. This is supplemented with analysis of price to rent ratios and fundamental price to rent ratios.”

“Loose monetary policy is defined as the deviation of the short term interest rate from the rate which the Taylor rule would prescribe. The empirical results suggest that for some countries deviations from the Taylor rule played a role in the surge in house prices and that a monetary policy stance less discretionary and more closely aligned with a Taylor rule could curtail some of the imbalance in the housing market.”

The full PDF is available at the link.

The second is by Dee Woo, the chief economist of Beijing Zhonghua Yuan Financial Institute. Titled:

China’s Insane Housing Market Will Tumble And Crash In 2017

“Summary

What’s behind the property fever in China?

The financial truth of the destocking of China’s property market.

Use quantitative analysis to predict when the bubbles of China’s housing market will burst.”

A report from the Banker & Tradesman in Massachusetts. “The real estate market in Greater Boston may be on a record roll when it comes to home and condominium prices, but there’s trouble brewing on the horizon. And as we move into 2017, until now, simply irksome issues – the flood of new luxury apartments hitting the market, rising mortgage rates and, at the other end of the market, a dearth of single-family homes for sale – are poised to take on greater significance. In the case of the increasingly glutted luxury apartment market, we could very well start to see the bursting of a rental market bubble as developers and bankers alike start to pull back.”

“How many of these, overpriced, cookie-cutter high-rises and boxes do we need? Banks were skittish about lending on new condo projects coming out of the recession but, for a few years anyway, were more than happy to finance less risky apartment projects. Developers rushed in with the belief that just about every street corner needs hundreds of new $3,000 and $4,000 a month apartments.”

“Now, five years and thousands of new apartments later, the luxury rental boom is poised to go bust. Worrisome signs are coming out of previously red hot markets like Miami and New York, where there has been epic overbuilding of both deluxe apartments and condos. Sales of co-op apartments in New York worth $4 million and up recently plunged 25 percent amid fierce competition from new units, while Miami has its own growing luxury apartment and condo glut.”

“Meanwhile, construction starts on new apartment projects have also started to drop in the Boston area, another sign that developers may be starting to get cold feet. Bankers have been growing wary as well for more than a year now. Add to that all sorts of freebies being used by developers to fill up these empty towers, from ‘free rent’ to gift cards, and you get the picture. Yes, we desperately need more housing, especially the kind middle and working class families can afford, not more outrageously priced apartments.”

The Star Tribune in Minnesota. “With apartment developers hammering their way into a new year, the rental market in the Twin Cities is about to shift. Construction this year will outpace 2016, but it will move from the cities to the suburbs. While the vacancy rate is still below average, there are places where it’s becoming a renter’s market. ‘I’m pushing rents this year,’ said Mark Jensen, president of Steven Scott Management, which operates rental properties throughout the metro area. ‘But there are pockets where there’s too much supply.’”

“The coming shift in the market is also expected to have an impact on investors in the Twin Cities. For three years in a row, apartment building buyers — mostly institutional investors from out of state — have paid record prices for Twin Cities properties, but some brokers expect transaction volume to fall this year. ‘We will continue to see increased demand,’ said Gina Dingman, president of NAI Everest, a commercial real estate brokerage. ‘But increased interest rates and overall transaction costs will cause buyers to offer less for the same property they may have paid more for a year earlier.’”

The Seattle Times in Washington. “Seattle is set to see almost 10,000 new market-rate apartments open in 2017, nearly twice as many as in any other year in the city’s history. The magnitude of the construction is remarkable. The city is on pace to see more apartments built this decade than in the previous 50 years combined — and the vast majority of the new units haven’t opened yet, according to the Dupre + Scott research firm.”

“The suburbs aren’t far behind in the building spree: The entire Puget Sound region, from Tacoma to Snohomish County, is slated in 2017 to have its second-busiest year in history for apartment construction, just shy of a suburban building boom in the late 1980s. Those who build and bankroll apartments remain concerned about a possible oversupply bubble, especially for luxury units.”

“Tom Parsons, executive managing director of apartment developer Holland Partner Group, notes that costs for building apartments have surged 35 percent in the last half-decade, lowering profits and making Seattle less attractive for big investors. ‘Given the increase in the overall cost of housing over the past five years, we believe that capital has reached the tipping point and many of the projects being planned will be unable to be financed,’ Parsons said. That last happened when the market tanked during the recession and barely anything got built.”

The Washington Post. “The Bartlett, a 22-story apartment tower in Arlington’s Pentagon City, will start daily rentals for 50 units Jan. 13, just in time for the inauguration. There have been 39,000 new apartments placed on the market in the Washington region since 2014, and an additional 25,000 are being built, said Max Peker, a market analyst with CoStar, which studies the commercial real estate market. Apartment demand has been resilient because of strong job and population growth, but the rise in competing properties means landlords have limited opportunities to raise rents.”

“Erik Gutshall, the planning commission’s vice chair, said the hotel-style usage will benefit the county by generating tax revenue and enlivening the streetscape in Pentagon City. ‘We need to keep innovating,’ he said. ‘And we can’t get hung up on zoning laws built for the 1950s.’”

The Dallas Morning News in Texas. “With over 55,000 apartments under construction in North Texas, Axiometrics and other apartment market watchers are predicting a slowdown in rent growth. ‘D-FW has been one of the few markets to maintain its strength in the past year as moderation hit the nation as a whole,’ Axiometric’s Jay Denton said in the report. ‘But new supply is expected to reach its peak for this cycle in 2017 while demand in terms of job growth will remain steady. It’s that influx of new construction that could cause rent growth to decrease.’”

“More than 29,000 apartments being built now are scheduled to open next year. Nationwide apartment rent growth is already slowing. ‘Though the market has moderated, it’s important to stress that we’ve seen a very strong market for more than six years,’ Denton said. ‘Axiometrics had predicted this moderation, since the market could not sustain the peak of 2014 and 2015.’”

The Press Democrat in California. “For renters, the search for housing this year was hindered once more by a lack of available units. Two private companies that track county apartment data put the vacancy rate this fall at less than 3 percent. The rent for the average two-bedroom, two-bath apartment in the county has increased 49 percent in five years to $2,122 a month, according to Real Answers, a Novato company that tracks data from large rental complexes.”

“Looking ahead, Scott Gerber, managing director of Bradley Commercial Real Estate in San Rafael, predicted the county will get some relief in the coming year because of an apparent oversupply of new rentals coming on the market in San Francisco, the Peninsula and Silicon Valley. In time, some county residents will move south to take advantage of that housing and landlords will seek more modest rent increases. ‘The rental market is certainly settling down,’ he said.”

What’s your housing bubble prediction for 2017? Nashville Public Radio, “Home sales in Nashville have surged in recent years. The median price for a single family home is up by nearly half since 2012. Most realtors and analysts don’t see the market slowing down anytime soon. But we talked to one who says he can predict the exact month that will happen. ‘The Nashville market is probably one of the best housing markets in the United States,’ says Edsel Charles, the chairman of Franklin-based MarketGraphics Research Group Inc.”

“Charles projects Nashville’s home sales will stay strong until 2020. Actually, May of 2020 to be exact. That’s when the economic cycle nationwide will begin to wane, pulling Nashville down with it. Until then, he describes the next few years as going something like this. ‘So we’re going to go from today, grow, come down a little bit and then go back up,’ he says.”

The multifamily market? “This year Nashville has seen a tidal wave of apartments being built and coming up for rent. And experts say the market is starting to get water-logged. Longtime apartment developer Marty Heflin says Nashville’s hit the peak of its apartment building boom. ‘I think we’re headed to the bottom right now,’ Heflin says.”

“Recent data from Colliers International, a commercial real estate firm, show more than 10,000 apartments are slated to come online over the next year — yet another record for new supply. And Germantown is ground zero for the onslaught, with roughly 4,000 of those apartments. But research shows the rate at which they’re being rented is beginning to wane. And Heflin says developers are working hard to find tenants as fast as possible.”

“‘In some of the higher-end developments around town, you are starting to see one, two, three months free,’ Heflin says. ‘We are not quite to clowns twirling signs in the streets yet for ‘come on in a lease right away.’ But I would say it’s definitely becoming a concessionary environment right now.’”

From Pound Sterling Live. “It may be the great irony of Trump’s presidency that when a property developer came into office the first thing that happened was that the bottom fell out of the property market. Yet that appears to be exactly what may be happening if recent data and forecasts from certain analysts are anything to go by.”

“Nordea Bank analyst Aurelija Augulyte has been expecting a slump in housing, and has forecast a full-scale downturn in the sector in 2017. She notes how history shows that it only takes a 100 basis point rise, or 1.0%, in interest rates (and mortgage rates) to cause a recession. A steady decline in residential investment is another early indicator of a slowdown in the sector.”

“‘Housing market is key, residential investment is one of the best leading indicators for the US economy. The recent rise in yields will dampen the housing market activity. In fact, it doesn’t take much – just another 100bp rise in mortgage rates, and we have a US recession? Yes, I think in some form or shape, we will have a word ‘recession’ as a theme and driver during 2017,’ said Augulyte.”

From six months ago. “Predictions: Major political or economic shock hits US in August/September. Recession is belatedly found to have begun in Q2 2016. High end housing inventory continues to pile up, putting downward pressure on mid-level housing prices. Median sales prices start to drift downward as high end properties taken out of the mix. Entry-level housing remains in high demand, especially in desirable neighborhoods.”

“Presidential election is close; Hillary prevails albeit not without scandals. Brexit is shelved…”

Another said, “This is the top and there is nowhere to go from here but down, I called it in ‘07 and I’m calling it now. Inventory is loading up in the key markets: Miami, Phoenix, Atlanta, Las Vegas. SF And NY are starting to see some inventory.”

One had this, “I predict that Donald Trump will continue to be Donald Trump and his campaign will continue imploding from now through November 2016 Election Day.”

From one year ago. “How much liquidity will they drain out, that is the trillion dollar question. I still think that NIRP is coming. From some of the articles I’ve read, surveys say that people will tolerate up to negative 10% interest rates before they really get upset.”

Another said, “I was thinking of a gold price target of $1,300 for the end of 2016. $1,500 in 2017. Low in 2018 or 2019 of $890. Up from there. Not sure on oil. Probably range bound closer to $50. Stocks: Slightly new lows by March. Sluggish but up a bit by the end of the year from there. New highs by late 2017, but a Fall CRASH. BONDS: not in good shape. Getting worse. Real Estate becomes more sluggish in the vast majority of areas. The Real Estate Wealth Effect goes into reverse. TRUMP wins.”

And another, “The more likely it is that Trump wins the Republican nomination, the more likely it becomes that the Democrats will win the 2016 presidential election. I still suspect that Trump and all you Trump trolls secretly work for the Clinton campaign. I predict that Trump will continue to tap into the populist anger vibe, but the Republican base will dump him at the convention through a brokered procedure.

And finally, “At the end of The Big Short, they revealed that new irresponsible bets on housing were introduced in 2015. If that is true, the bubble in housing has not fully even reignited yet. There is no way we are anywhere near the mania I saw in 2015, so nobody here has an ounce of proof that housing is in the process of crashing. Oh yeah, Hillary will win. That’s a hard prediction.”

It’s Friday desk clearing time for this blogger. “Looks like all those reports of a luxury slowdown weren’t just speculative after all: The final Olshan Realty report of the year is out, and according to the real estate trackers there, ‘the golden years of new condo development’ are over. As Curbed New York columnist Jonathan Miller has noted in the past, ‘there’s too much development being built at 2014 prices, and that buyer isn’t there.’”

“Most of Edgerton’s tobacco warehouses were demolished years ago after the tobacco industry dried up. But in the past five years three of the cream-colored buildings were converted to apartments. All are full. Contrast that with the Orchard Heights subdivision for single-family homes on the city’s southern edge. It’s 12 years old but only about 20 percent full, developer Don Cosgrove said. ‘When we started out, we built maybe 30-some houses in the first few years, but it just went to nothing,’ Cosgrove said. ‘We thought it would be several years ago to fill the lot … Who knows when it will be filled?’”

“In the Bay Area housing market, supply and demand means not much supply and way too much demand. As a result, the cost of a single-family home has skyrocketed in recent years. Yet there were cracks in the market’s red-hot edifice; the volume of sales was way down from the previous year. New peak prices were recorded in April, May, June and July — and then the ’sluggish’ word set in and didn’t go away for the rest of the year. Sales were down. Buyers were digging in their heels. By fall, outside of hotly contested areas, sellers were making price adjustments unseen in a long time.”

“A new tax brought in to replace stamp duty is holding down house prices on the west coast, according to a leading estate agent. Will Banham, of Bell Ingram’s Oban office, said the Land and Buildings Transaction Tax has had unusual and unintended consequences for the west coast of Scotland. Mr Banham said: ‘This has simply caused downward pressure on prices, with most buyers explicitly discounting their offers by the exact amount of extra tax due. It is very much a buyers’ market, with vendors losing out.’”

“In the Yamuna Expressway authority area, 20 builders have failed to complete their projects and the investments of around 20,000 homebuyers is at stake. Noida, Greater Noida and Yamuna Expressway authorities are to recover a total of around ₹25,000 crore from builders in land dues. Many have turned defaulters, citing a dip in sales of flats. In Noida, the investments of around one lakh buyers are stuck in 50 delayed projects. There are 95 under-construction realty projects in Greater Noida. Around one lakh homebuyers in 80 of these projects are estimated to be impacted.”

“Australia’s booming market for purpose-built student accommodation, having caught the attention of some of the world’s largest investors, could be on the precipice of oversupply, with concerns among some of the industry’s largest outfits over the number of new beds in Brisbane. A report produced by commercial realtors JLL shows about 10,000 beds proposed in Brisbane, ‘the largest pipeline of beds in the country,’ adding to the existing supply of 9325 beds by 2020.”

“Iglu, which runs two ­student accommodation facilities in Brisbane, including one that opened months late, said it was ‘always a challenge’ to fill the properties. ‘There are a limited number of students, particularly at the higher price points,’ said company’s director Richard Smith. ‘Most of the new product is ­targeting a similar student demographic and we are concerned about the depth of the market to support all this new product. In our view Brisbane is the most oversupplied market in Australia … the student market is about half the size of Sydney and Melbourne yet has the largest development pipeline in Australia.’”

“Prices of completed private condominiums continued to fall in November suggesting recovery is still some way off for resale homes. November’s price fall was led by units in the central region, according to flash estimates from the NUS Singapore Residential Price Index. Mr Wong Xian Yang, head of research and consultancy at OrangeTee, said: ‘With rents still on a downtrend and the outlook on interest rates remaining unclear, buyers will continue to negotiate hard for lower prices.’”

“In China’s two-speed property market, prescriptions for deflating big-city bubbles are having unintended side-effects in smaller towns. ‘China’s property market has complicated, structural problems,’ said Wen Bin, a researcher at China Minsheng Banking Corp. in Beijing. ‘Bubbles in big cities have much to do with financial leverage, whereas oversupply in third- and fourth-tier cities epitomizes the lukewarm economy.’”

“Curbs are just buying time for policy makers and won’t fundamentally solve the crucial problem of regional imbalances, said Tommy Xie, an economist at OCBC Bank in Singapore. ‘They need to push forward the combined reforms as they’ve pledged in the statement,’ Xie said. ‘But to deflate a bubble while cutting oversupply really isn’t easy.’”

“Real estate prices will eventually collapse in Edmonton and prospective homeowners should consider renting for a few years, says an Alberta investment manager. ‘There’s lots and lots of issues with the Alberta economy, being a boom-and-bust economy. We’re not through the worst part of it yet,’ said Hilliard MacBeth, an Edmonton-based portfolio manager.”

“He expects some homeowners will be hit harder than others. For example, high-end properties on the outskirts of Calgary have already experienced a sudden drop. ‘Home bubbles and bubbles bursting and the explosion in the level of debt in Canadian society are totally tied together,’ MacBeth said in an interview with CBC Radio’s Edmonton AM. Because the market has been strong for decades, many Edmontonians believe the sector is recession-proof. MacBeth says this optimism is misplaced.”

“‘One of the big surprises to me is how widespread the belief is that owning a home is a really good thing to do,’ he said. ‘It goes through all levels of society, all kinds of people. The idea that prices always go up, it’s a very false belief, but it’s a very widespread belief.’”

“Renting is currently a bargain in Edmonton, MacBeth said. ‘If people think of a house as an investment, then everybody should sell their house and live in a rental place or move to a trailer,’ MacBeth said. ‘But if you think of it as a place to live, and accept that you will be consuming the value of that home over your lifetime, then it’s OK. It’s a speculator’s game, not an investor’s game.’”

A report from the San Francisco Business Times in California. “In 2016, around 5,000 units were completed in San Francisco, the highest level in decades. Will prices keep dropping? With supply on the rise, rents in San Francisco fell 2.1 percent in the past year, down to $3,390 per month for a one-bedroom, according to ApartmentList. That’s still the highest in the country, but a significant slowdown compared to the double-digit price growth of the past few years. The outlook for 2017 is uncertain: The city could see a continued cooldown, a major downturn or a rebound. What happens will affect billions of dollars in housing investment going forward.”

The Chicago Tribune in Illinois. “After experiencing a painful surge in rents during the last six years, Chicago tenants finally are getting a break. Rents have dropped in areas of downtown where there has been massive new construction of luxury high-rise apartment buildings, and rents are rising only modestly throughout the metropolitan area, according to Axiometrics. The trend in the Chicago area follows the same pattern as the rest of the nation. After years of record-setting new apartment construction, rents have begun to moderate. But Chicago’s slowdown is more pronounced.”

“Axiometrics analysts attributed the weaker rental market in Chicago to slow job growth, which is suppressing apartment demand at a time when new construction has produced a huge supply of rental units. n a report after the third quarter, Chicago-based Appraisal Research Counselors said the number of rental units in Chicago’s downtown had increased 150 percent since mid-2005. There were 6,880 units under construction downtown this fall. In 2015 and 2016, about 3,500 new units have become available each year, about double the annual average over the last 24 years.”

From Michigan Live. “Plans for a new 12-story student apartment high-rise on South U are headed to the Ann Arbor City Council for approval. The project includes 19 four-bedroom units, 17 five-bedroom units and 7 six-bedroom units geared toward U-M students. The apartments are expected to be priced from $5,500 to $8,000 per unit, according to plans. The four-bed units range in size from 1,334 to 1,581 square feet, while the five-bed units go from 1,503 to 1,898, and the six-bed units are 2,147 square feet.”

“Commissioner Alex Milshteyn raised the question of housing supply and demand, asking the developer to comment on whether there might be an oversupply of this type of housing geared toward students. Sean Havera, a representative for the development, said the development team looked closely at that and that’s why there aren’t one- and two-bedroom units, which are less in demand and the last to be rented in student housing developments. ‘There’s still a very big availability of those,’ he said.”

The Houston Chronicle in Texas. “A recent national report found further evidence of Houston’s apartment glut. Real Page, Carrollton, TX-based technology firm, found that Houston’s high-rise apartment rents declined the most out of the 50 largest U.S. markets surveyed. Houston saw a 7.1 percent decrease in high-rise apartment rents, the steepest nationally. A wave of high-end units are coming to the market, as job growth slows and weakens, creating a glut.”

“San Francisco, one the most expensive markets in the country, also saw a drop in rent prices with a 6.2 percent drop annually. The firm suggested that the pricing in the Bay Area may have been inflated in recent years. The average rent is still $3,400 a month, despite the drop in prices.”

A report from MarketWatch. “The number of investors who flipped a house in the first nine months of 2016 reached the highest level since 2007. About one-third of the deals were financed with debt, a percentage not seen in eight years. Now Wall Street, which was nearly felled by real-estate forays almost a decade ago, is getting back into the action. A number of banks are arranging financing vehicles for house-flippers, who buy and sell homes in a matter of months. ‘The floodgates have opened,’ says Eduardo Axtle, a 35-year-old former telecom entrepreneur in Oakland, Calif., who has taken out about 50 home loans over the past five years. These days, he is bombarded with unsolicited emails from brokers offering him access to financing, and fellow flippers invite him to get-togethers.”

“Some borrowers say they have been offered debt in excess of the value of the home, also known as the loan-to-value ratio. Others say some lenders are requiring bank statements to get a loan, but not standard documentation such as a W-2 tax earnings statement. George Geronsin, 36, a Southern California real-estate agent and house-flipper who has been in the business since 2008, said he recently sold the majority of the homes he was working on and is sitting on cash ‘until the next big correction’ in the housing market. ‘Anybody and everybody is getting into the business of house-flipping — that’s when you know it’s the end of the rope,’ said Mr. Geronsin.”

The Citizen Times in North Carolina. “Local renters weary from hunting for an apartment they can afford may now get some relief. Asheville and Buncombe County have eased out of a housing crisis, according to a newly released report commissioned by the city. The main change has come in market-rate apartments. While the area had a severe shortage on its hands in 2014, there are now 4,722 units proposed or under construction in the county. That could actually tip the scales to the point the vacancy rate exceeds 10 percent, said Patrick Bowen, whose Ohio-based company Bowen National Research recently updated its 2014 apartment report for the city.”

“If that happens, rents will go down, but apartment complexes may start failing. ‘Wouldn’t a renter like to see rents go down? Yeah, they would,’ Bowen said, but failing apartment buildings could cause a spiral of bad things, including loss of home values.”

From Bloomberg on New York. “The luxury Manhattan co-op, a longtime sign of real estate prestige and exclusivity in New York, may be losing its appeal. Blame a glut of newly built high-end condos. Contracts for co-op apartments priced at $4 million or more fell 25 percent this year from 2015, as buyers with means opted for newer homes with more amenities and fewer restrictive rules, according to a report published by luxury brokerage Olshan Realty Inc. It was the biggest annual decline since the firm started tracking luxury co-op contracts a decade ago.”

“‘The data right now has a big, red circle on it that says this sector is in trouble,’ Donna Olshan, president of the firm that bears her name, said in an interview. Next week, Jacky Teplitzky, a luxury broker with Douglas Elliman Real Estate, plans to list an Upper East Side co-op with an asking price that’s slightly below its market value — a way to stand out in a sea of other co-op apartments competing against the wave of shiny new condos. ‘The good news,’ Teplitzky said, ‘is that you can get a very good deal in a co-op now.’”

From The Rapidian in Michigan. “‘I’m watching strangers go in and out of my home,’ said Yvonne Johnson, looking out the window. While we talked at a neighbor’s house, Johnson’s home was filled with realtors and prospective buyers, there for a typical Sunday open house. It’s been a common sight on her block in the last ten months. The home, located near the newly desirable Wealthy Street corridor, is being sold to avoid foreclosure. Yet Johnson thought she was part of a protected low-income housing program.”

“‘I was under the impression that I was part of a home ownership program,’ Johnson said. ‘The house that I live in was built in 1998 by a grant through HUD. The city of Grand Rapids built homes in certain areas to raise the property values. At that time I understood that I would pay my part of it in ten years, because of the HUD grant involved.’ When the ten years passed, she didn’t receive notice, and so she kept paying. She’s been paying for 18 years total.”

“A look at Johnson’s documents reveals that the Grand Rapids Housing Commission (GRHC) applied a $19,000 down payment for the $65,000 home, contingent upon Johnson living in the home for a number of years. What wasn’t clear to Johnson was that the rest of the loan would be a typical mortgage with Mercantile Bank at the current interest rate, around eight percent in the late 1990s.”

“Most of all, though Johnson had been paying for years and hoped that would ensure her home ownership, that wasn’t to be the case. The bank said her home’s entire loan was over $150,000, and she still owed almost $30,000. Johnson said she was never told that the loan was going to amount to that much. Though she used to pay ahead on her mortgage, now that she’s struggling with a recent job loss and less reliable transportation, her options are running out.”

“She would like to move on her terms, and to a comparable place. ‘Now I’ve had such a bad experience, I just want to move. If all this hadn’t happened, I would have liked to stay. I raised my kids here. But after two years of trying to get answers, I’m just so drained and tired.’”

A report from the Australian Financial Review on the UK. “Never before in the history of London has there been so much uproar about so many buildings – many of them skyscrapers, and most built or approved during Boris Johnson’s eight-year reign as London’s Mayor. Investigative financial journalist George Turner – who fought an unsuccessful campaign to prevent the controversial high rise redevelopment of the Shell Centre on the south bank of the Thames – believes the high-rise horse has bolted. ‘Luxury apartments are stacked high and left vacant while housing is now unaffordable for most Londoners,’ he wrote. ‘Warped by financial interests, our planning system guarantees property developers huge profits but fails to deliver the buildings and services we need.’”

“Architect Barbara Weiss co-founded Skyline Campaign in February 2014. “There were 236 high rise buildings either built, approved or in the pipeline when we launched Skyline Campaign,’ Weiss explained. “Now there are 436: that’s 200 extra skyscrapers in two years. Around 75 per cent of the new skyscrapers are residential. That’s new for London. They’re being built very cheaply. Corners are being cut. And they are going to be very difficult to demolish once they have gone past their use-by date.’”

“‘We’re building ghettos of the wealthy in the sky,’ Weiss complained. ‘These towers are symbolic of how divided London has become. Sydney and Melbourne are being similarly trashed. It’s an international disease.’”

From The National on Dubai. “Dubai rents are set to decline further next year with more than 20,000 new homes entering the market, brokers say. After having fallen by up to 5 per cent this year in parts of Dubai, rents should drop by another 4 per cent in the suburbs next year amid the supply influx, according to the Core Savills 2017 forecast. Jesse Downs, managing director of Phidar Advisory, expects prices and rents across Dubai to weaken next year as the slowing economy forces companies to downsize, dampening demand.”

“She said banks continue to cut staff and the new jobs which are created are in lower paid industries – something which she says will depress rents, in turn depressing sales prices. ‘It seems stakeholders forget to ask the simple question: who will live here and why?’ Ms Downs said.”

The Daily Nation on Kenya. “The rapid growth of real estate saw Nakuru voted the fastest growing town in the region by UN Habitat. However, the current shortage of tenants for most of commercial and residential units seems to indicate that the anticipated economic growth was overstated. Some landlords are beginning to realise that investing in the town might have been a hasty decision. Many landlords in the central business district (CBD) are staring at empty premises as property agents count their losses.”

“A spot check by DN2 found that in most buildings, occupancy was concentrated on the ground and first floors, while the rest are largely empty. The situation is the same in residential areas such as Racetrack, Shabab, Naka, Section 58, Kiamunyi, Barnabas and Freehold.”

“According to Skylight Commercial Agency Managing Director Mr John Kiritu, the inflated landlords are to blame for the situation. ‘Some of the rents charged in the CBD are not affordable. For instance, two years ago, an office measuring 10ft by 10ft on Kenyatta Avenue was going for between Sh4,000 and Sh5,000 per month. It has now shot up to between Sh15,000 and Sh20,000,’ Mr Kiritu offered. ‘With so many building coming up, it is up to the landlords to review their rents if they hope to get new tenants.’”

The Bangalore Mirror in India. “The final quarter of 2016 has bad news for real estate players as the supply of new residential inventories in most metros including Bengaluru has exceeded the absorption rate, showing a slowdown in the industry. ‘Post-demonetisation, the affordable housing segment will get a much-needed boost. Confined to the fringe areas of metros, this segment is expected to get a boost as land prices will plummet in the next few years, especially in far-flung areas around Indian metros, as well as tier-II and tier III cities,’ said Anuj Puri, Chairman and Country Head, JLL India.”

The Gladstone Observer in Australia. “Sellers desperate to offload their Gladstone properties are offering massive price drops on homes on the proviso that buyers snap it up quick. The vendor discount in Gladstone, used to measure the difference between the original asking price and the eventual sale price, is the state’s second biggest at 10.6%, only beaten by Mackay at 11.4%. The discount has increased slightly in the three months to September from 9.6% in the June quarter. It was up from 8.1% in 2015, meaning the average buyer can expect to see $106,000 reduced from a $1 million home.”

“Real Estate Institute of Queensland Gladstone zone chairwoman Vicki Brown said she’d noticed a drastic ramp up of sales in October. ‘As you know it been a pretty bad year, but the last month has been crazy busy,’ she said. ‘The prices haven’t gone up, but we’ve sold a lot of houses and rented a lot of houses.’”

“Ms Brown said she’s sold to investors from Brisbane, Sydney, Melbourne, and Darwin, but a large portion of homes have been handed over to first home buyers that previously rented in Gladstone. ‘Tenants are buying now because it’s very affordable for them.’”