Property speculators meet your future. In Vancouver:
Vancouver Mayor Gregor Robertson says a new proposal that would require people to get a licence for Airbnb and other short-term rentals could put up to 1,000 homes back into the long-term rental pool.
That’s because short-term rentals of less than 30 days would only be legal in homes that are principal residences, Robertson revealed Wednesday at city hall.
“Housing is first and foremost for homes, not operating a business,” said Robertson.
“Both the city’s research and broad public input tells us we can have short-term rentals in Vancouver to help supplement income, while ensuring long-term rents are back in the rental market.”
The proposal comes the week after Robertson revealed a proposal to tax empty or vacant homes that are not principal residences, with the aim of getting empty investment properties back in the rental pool.
Under the proposed rules for short-term rentals, homeowners would be able to get a licence for their principal dwelling.
They would not be able to get a licence for secondary units on the property — such as basement suites and laneway homes — according to Matheny Krishna, the city’s general manager of building licensing.
“We are defining it by the dwelling unit, not the entire property. So if there are laneway homes and secondary units, those are not considered,” said Krishna on Wednesday.
And London:
London mayor Sadiq Khan is to launch the UK’s most comprehensive inquiry into the impact of foreign investment flooding London’s housing market, amid growing fears about the scale of gentrification and rising housing costs in the capital.
Khan said there are “real concerns” about the surge in the number of homes being bought by overseas investors, adding that the inquiry would map the scale of the problem for the first time.
“It’s clear we need to better understand the different roles that overseas money plays in London’s housing market, the scale of what’s going on, and what action we can take to support development and help Londoners find a home,” Khan told the Guardian.
“That’s why we are commissioning the most thorough research on this matter ever undertaken in Britain – the biggest look of its kind at this issue – so we can figure out exactly what can be done.”\
While our property parasite treasurer just flat out lies in our faces. It can’t last, from Forexlive:
“Canada, Australia and New Zealand have all faced commodity shocks that have hampered growth and left the economy highly dependent on housing activity. Despite mounting financial stability risks, central banks in these regions are stuck with low rates to stimulate growth.”
BoA / ML lay out 3 scenarios for how each country’s housing boom will play out … labelling the scenarios the bad, worse and worst. All will require a painful unwinding of record debts accumulated by households.
Bad:
- Successful implementation of mortgage and housing policies (i.e. tightening sales to offshore buyers)
- Avoid a housing crash
- But household debt stays high, weighing on economic growth
- Central banks maintain accommodative monetary policies (referring to the RBA, BoC and RBNZ)
- BoA / ML make special mention of Australia – household debt levels are highest of the 3
Worse:
- An aggressive tightening of housing policy
- Reduces demand sharply and therefore a fall in prices & sales
- Makes house prices cheaper
- But cuts economic growth
- May lead then to a renewed loosening of monetary policy
- Again, BoA / ML single out Australia, as there is a surge of housing supply set to come on line
Worst:
- No tightening of housing policy
- Eventual financial stability risks and concerns on growing unaffordability finally prompts government action
- Results in a more serious price correction and potential housing crash
My own view is that we’ll take the bad path but it will turn into worse and worst as social discord forces immigration cuts, we run out of monetary easing, fiscal policy is limited and we enter the end of cycle global shock.
It won’t happen overnight but it will happen.
