Global Housing

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Why Morrison’s London housing affordability junket was a farce

By Leith van Onselen Back in January, Australia’s real estate treasurer, Scott Morrison, traveled to London to gain ideas on how to address housing affordability. At the time, I questioned why Morrison had sought solutions on housing affordability from politicians located in one of the world’s most expensive housing markets – London – and from

7

Has Texas lost its housing advantage?

By Leith van Onselen For years I have argued that Australia should look to Texas to solve Australian housing supply. This view was based primarily on the fact that Texas has been able to achieve stable and affordable housing in the face of extreme population growth (see next chart). Now the Dallas Federal Reserve has

6

LA residents vote to blow bigger housing bubbles

By Leith van Onselen For years I have argued that markets where land supply is unresponsive (inelastic) – via planning constraints or geographical barriers – are far more prone to suffer from more expensive housing, higher house price volatility, and bigger boom and bust cycles than markets where land supply is relatively responsive (elastic) to

15

The rise and rise of generation rent

Cross-posted from The Conversation: The inequalities and inequities that housing markets generate have become a cross-national issue in the last decade or so. In Australia, the UK and the US, discussions of “Generation Rent” have taken centre stage. In the generational debate, older, asset-wealthy owner-occupiers advantaged by previously more stable lending conditions and historic house

42

The evidence is clear. Foreign buyers are forcing up property prices

By Leith van Onselen Some interesting analysis has been released recently showing the inflationary impact that foreign capital is having on international housing markets. The first piece of analysis, published in VOX, shows how foreign investor demand “has had a significant positive effect on house price growth in the last 15 years” in the UK,

50

What Melbourne and Hong Kong have in common: shoe box apartments

By Leith van Onselen South China Morning Post’s Yonden Lhatoo has clearly had enough of the shoebox apartments being constructed around Hong Kong, penning the following rant: Emperor International Holdings has entered the hall of shame for heartless developers putting profit before people, with plans to build the tiniest homes in the city. With these

10

Why do urban growth boundaries cause so many problems?

Cross-posted from Medium: Many people find the economics of housing complicated. The two authors of this article attempt to present a hopefully simple overview of the key points. Phil Hayward explains how growth boundaries causes excessive housing inflation and Brendon Harré responds to explain why intensification restrictions may also need to be loosened. The basic

10

Now Vancouver to tax vacant homes

By Leith van Onselen Back in June I published a disturbing report aired on SBS Dateline examining the large-scale migration/investment of wealthy Chinese into Canada’s city of Vancouver, which has forced house prices to astronomical levels and left a swathe of empty homes. The Dateline segment followed a report presented to the City in March

0

The global growth bounce upsetting markets

From Morgan Stanley: Our new Global Coincident Indicator (MSGCI) points to faster GDP growth of 3.0% in 3Q16 vs. our mid-July forecast of 2.4%. Upside surprises came from better-than-expected DM dynamics, which could give DM a better ramp into 2017 and seems to have made central banks become less dovish. Nothing but upside surprises to

1

Global house prices recover to 2007 levels

By Leith van Onselen The latest data from the IMF’s Global Housing Watch reveals that real house prices globally have recovered to 2007 levels, although there is wild divergence between countries: There is a fair bit of cross-country variation, as shown in Figure 2. While house prices have increased over the past year in most

13

UK regulators fret about 17% investor loan share

By Martin North, cross-posted from the Digital Finance Analytics Blog: The latest Financial Stability report released by the Bank of England provides insights into the UK mortgage market, and some of the concerns the regulators are addressing. Of note is the information on “Buy-to-Let” loans, or Investment Mortgage Loans. Most striking is the strong concerns

50

Vancouver mayor mulls empty homes tax

  By Leith van Onselen Yesterday I published a disturbing report aired on Tuesday’s SBS Dateline examining the large-scale migration/investment of wealthy Chinese into Canada’s city of Vancouver, which has forced house prices to astronomical levels and left a swathe of empty homes. The Dateline segment follows a report presented to the City in March

50

More backlash from London’s empty towers

By Leith van Onselen I wrote yesterday how the new mayor of London, Sadiq Khan, had spoken-out about foreign investors using homes in London as “gold bricks for investment” following an investigation which found that the UK’s tallest residential skyscraper is now more than 60% foreign-owned and is under-occupied. Now The Guardian’s Simon Jenkins has

36

London’s mayor says what Melbourne’s won’t

By Leith van Onselen The mayor of London, Sadiq Khan, has spoken out about foreign investors using homes in London as “gold bricks for investment” following an investigation which found that the UK’s tallest residential skyscraper is now more than 60% foreign-owned and is under-occupied. From The Guardian: Khan warned that building thousands of new

26

2016 Demographia Housing Affordability Survey

By Leith van Onselen The 12th Annual Demographia International Housing Affordability Survey has just been released and, once again, it ranks Australia as having one of the most expensive housing markets out of the countries surveyed. This year’s report assesses 367 urban markets in nine countries: Australia, Canada, Hong Kong, Ireland, Japan, New Zealand, Singapore,

18

Canada takes action against liar loans

By Leith van Onselen In late October, Canada’s The Globe and Mail ran an article on how mortgage fraud is thriving in Canada’s red hot housing market, mostly via the mortgage broking industry, raising risks for financial stability: In some cases borrowers are simply trying to buy a home that is out of their reach

30

Basel 4 is coming for property investors

By Martin North, cross-posted from the Digital Finance Analytics Blog: The second consultative document on Revisions to the Standardised Approach for credit risk has been released for discussion. There are a number of significant changes to residential property risk calculations . These guidelines will eventually become part of “Basel IV”, and will apply to banks

10

Canada’s CMHC admits foreign buyer impact

By Leith van Onselen Hot on the heels of the recent academic study examining home sales in Vancouver’s west-side, which found that an incredible 73% of all buyers were Chinese, Canada’s state-owned funder of mortgage-backed securities, the CMHC, has admitted that foreign buyers may be behind a “substantial portion” of luxury home purchases in Vancouver

33

Chinese push Vancouver house prices into orbit

By Leith van Onselen At last, a comprehensive dataset has proven that demand from Chinese buyers has pushed Vancouver detached house prices to astronomic levels. As reported in the National Post, an academic study examining all sales within three west-side neighborhoods in Vancouver over a six-month period has found that Ethnic Chinese comprised an incredible

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Canada housing: “Math that doesn’t add up”

By Leith van Onselen For several years now, I have been a passive observer of the Canadian economy and housing market, which has some striking similarities to Australia. Both economies are commodity exporters. Both countries have experienced high rates of immigration. Both countries largely dodged the global recession that shocked the developed world. Both countries use

23

What if boomers don’t downsize?

By Leith van Onselen For years I have argued that the retirement of the large baby boomer generation – a cohort that represents around 25% of Australia’s population but holds roughly half of the nation’s housing and financial assets – would eventually pose stiff headwinds for asset values, since many boomers would look to divest

8

Stop pumping demand and choking land supply

By Leith van Onselen Former Reserve Bank of New Zealand (RBNZ) and New Zealand Treasury special adviser, Michael Reddell, has made some outstanding contributions over the years. While working at the RBNZ last year, Reddell wrote a cracking paper questioning the merits of New Zealand’s high immigration program, which appears to have crowded-out (through higher interest