The Reserve Bank of New Zealand (RBNZ) believes the nation’s dwelling values are not sustainable and it is now forecasting that prices will fall in every quarter starting from Q42022 all the way through to the Q3 2024: House prices in New Zealand have increased rapidly over the past year from an already elevated level.
The housing industry and policy makers tend to blame a ‘lack of supply’ for soaring property prices. They claim that unaffordable housing is caused primarily by restrictive planning and sluggish construction rates, and if these were eased then prices would fall and homes would become affordable. A new paper from the Federal Reserve challenges this
I am currently pulling property-related data for an upcoming subscriber special report on the property markets of English-speaking nations. Yesterday I uncovered a treasure trove of data on Ireland, which has managed to successfully deleverage from one of the world’s biggest property bubbles leading into the 2008 Global Financial Crisis (GFC). The below charts tell
The world’s housing markets are growing at their fastest pace since 2007 according to the latest Knight Frank Global Residential Cities Index: Urban house prices are rising at their fastest rate since 2007 and of the 150 cities we track, 43 are now registering annual price growth above 10%. Cities are far from underperforming their
In Australia, major parties bribe voters with policies designed to inflate housing values in the knowledge that home owners will vote with their wallet. These demand-side policies come in a variety of guises, including first home buyer grants, stamp duty exemptions, and tax concessions. Sweden has emerged as an interesting contrast, whereby incumbent Prime Minister
CNN has released data showing the synchronised house price boom taking place across rich nations. According to CNN, real house prices across 37 OECD nations rose by 6.7% in calendar year 2020, which was the fastest pace of growth in 20 years: As expected, rock bottom mortgage rates are behind the price growth: Rock bottom
The Economist has released a new report looking at the synchronised house price boom taking place across rich nations. The Economist claims that this boom is unusual in that it is being driven almost uniformly by suburban houses rather than the inner cities: Across the 25 countries tracked by The Economist, real house prices have
The Reserve Bank of New Zealand (RBNZ) released data yesterday showing that new mortgage commitments hit their highest level on record in January driven by strong growth in both owner-occupiers and investors. In the year to January 2021, $77.9 billion worth of mortgages were issued, 6% higher than the previous peak of $73.6 billion in
Morgan Stanley’s chief global strategist wrote an article in the Financial Times (republished in The AFR) suggesting New Zealand Prime Minister, Jacinda Ardern, is a revolutionary for ordering the Reserve Bank of New Zealand (RBNZ) to add stabilising home prices to its remit: Housing bubbles are the worst… When prices fall, it can take years
The 2021 Demographia International Housing Affordability Survey has 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 92 major markets (metropolitan areas) in eight nations for the third quarter of 2020. The nations assessed are: Australia, Canada, Hong
For years, utopian urban planners have predicted the end of suburbia. We were told that people would increasingly shun suburban life in favour of higher density living close to CBDs whereby families would choose proximity and convenience over space. This claim was always a myth, with urbanisation being mostly a suburban affair. The COVID-19 pandemic
The Reserve Bank of New Zealand (RBNZ) yesterday performed a stunning U-turn, reintroducing loan-to-value (LVR) mortgage restrictions just 10 months after such restrictions were lifted to aid the nation’s COVID-19 response. Under the changes, most investors will need 40% deposits and most owner-occupiers 20% deposits; although there are explicit carve-outs for new residential construction: The
A new peer-reviewed study from Simon Fraser University (SFU) shows that the “decoupling” of property prices from incomes in Metro Vancouver and to a lesser extent Toronto has been caused by “significant sums of foreign capital that have been excluded from official statistics”. In particular, Richmond, West Vancouver, the city of Vancouver and Burnaby have
New Zealand house prices rocketed in October to another record high, according to the REINZ: Extraordinary growth is being recorded, with the seasonally adjusted median price surging by 4.7% in October and by 20.0% year-on-year: Sales volumes have also soared, rising 25.8% year-on-year: The price rises are being driven by the top half of the
The Real Estate Institute of New Zealand (REINZ) has released its house price data for September, which has reported booming sales and record high prices: As shown above, the seasonally adjusted median house price soared 14.1% year-on-year in September, with Auckland rising 11.8% year-on-year and regions outside of Auckland rising 16.3%. Sales volumes have also
With the global tourism industry in turmoil, Airbnb has axed one-quarter of its global workforce: In the note, written by Airbnb CEO and co-founder Brian Chesky, the company said that 1,900 employees will be laid off, or 25.3% of its 7,500 workers. The layoffs will impact a number of internal product groups, including Transportation and
The Teranet-National Bank House Price Index for February has been released, which shows that Canadian house prices rose another 0.4% across the 11 major markets, with annual growth improving to 2.9%: After falling for 14 straight months, Vancouver house prices have clearly bottomed, rising by 1.6% since their trough in September 2019. However, Vancouver’s house
Yesterday, we learned that Italy has suspended mortgage repayments amid the coronavirus crisis: Italy’s deputy finance minister has said the government will suspend mortgage payments and other household bills across the entire country during the coronavirus outbreak. Laura Castelli, part of the Five Star Movement side of Italy’s coalition government, said in an interview with
The Teranet-National Bank House Price Index for January has been released, which shows that Canadian house prices rose another 0.1% across the 11 major markets, with annual growth improving to 2.1%: After falling for 14 straight months, Vancouver house prices have clearly bottomed, rising by 0.8% since their trough in September 2019. However, Vancouver’s house
The Teranet-National Bank House Price Index for December has been released, which shows that Canadian house prices rose by 0.2% across the 11 major markets, with annual growth improving to 2.0%: After falling for 14 straight months, Vancouver house prices have bottomed, rising by 0.6% since their trough in September 2019 However, Vancouver’s house prices
The Economist has published an article on the West’s “horrible housing blunder”, which pins the blame for unaffordable housing well and truly on supply-side constraints, combined with inefficient demand-side subsidies: At the root of that failure is a lack of building, especially near the thriving cities in which jobs are plentiful. From Sydney to Sydenham,
The Teranet-National Bank House Price Index for September has been released, which shows that Canadian house prices rose by 0.1% across the 11 major markets, with annual growth improving to 0.7%: However, prices in Vancouver continued to fall, declining by 0.5% in September and down 7.4% since peaking in July 2018. Meanwhile, the Real Estate
The Teranet-National Bank House Price Index for August has been released, which shows that Canadian house prices rose by 0.4% across the 11 major markets, with annual growth improving to 0.6%: Across the three major markets, values fell by 0.8% in Vancouver in August, but rose by 0.8% in Toronto and by 1.1% in Montreal.
Vancouver’s speculation and vacancy tax is proving hugely successful, raising $115 million and exceeding the target set out in last year’s budget, and more than 2,500 homes found to be vacant: To date, the province has collected $115 million from property owners in major urban centres deemed to be extremely unaffordable and subject to land
The Teranet-National Bank House Price Index for June has been released, which shows that Canadian house prices rose by 0.8% across the 11 major markets, with annual growth falling to 0.5%: Across the three major markets, values fell by 0.3% in Vancouver in June, but rose by 1.3% in Toronto and by 0.8% in Montreal.
By Leith van Onselen The Teranet-National Bank House Price Index for May has been released, which shows that Canadian house prices rose by 0.5% across the 11 major markets, with annual growth falling to 0.7%: Across the three major markets, values fell by 0.2% in Vancouver in May, but rose by 0.7% in Toronto and
While the Canada Mortgage and Housing Corporation (CMHC) has advised the Canadian Government to maintain strong macroprudential controls to prevent irresponsible lending, the Government is doing the opposite, summoning the first home buyer (FHB) patsies in a scheme that will launch on 2 September. From Global News Canada [my emphasis]: Under the plan, the government would
By Leith van Onselen Acadata has released its latest house price results for the UK, which shows that annual price growth climbed back into the black driven by a rebound in London: In the year to May, UK house prices climbed by 0.3% (up from -0.1% in April), driven by Greater London where value losses
By Leith van Onselen Back in March, The AFR has published a propaganda piece claiming “Millennials don’t want to buy Boomers’ sprawling, multi-bedroom homes”: Boomers and Millennials also want very different types of houses… Fifteen years ago, Boomers were building large, elaborate houses in states like Arizona, Florida, North Carolina, and South Carolina, The Wall
While Australia’s captured prudential regulator, the Australian Prudential Regulatory Authority (APRA), is busy cutting lending standards, in the form of the shredded interest rates buffer, just months after the Hayne Royal Commission lambasted Australia’s banks for shoddy lending, and just five months after APRA said is was permanent. The head of Canada’s state-run mortgage insurer,
