Global Housing

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Australia ranks 2nd on global house price inflation

By Leith van Onselen CBRE Global Research and Consulting has released its annual Global Living report, which examines property performance across nations relative to London. The report reveals that out of the 18 countries surveyed, Australian house price inflation increased the second most over the past 30 years, behind the UK, rising by a whopping 221.4%

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Rising land prices behind global property boom

By Leith van Onselen Over the weekend, VOX published interesting research paper examining long-run house price trends across 14 advanced economies and some of the reasons behind the rapid global escalation of house price costs since the 1970s. First, the paper presents the (unweighted) mean and median of the 14 house price indices since 1870,

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Australia’s world-leading property addiction

By Leith van Onselen Capgemini and Royal Bank of Canada (RBC) has released their 2014 Asia Pacific Wealth Report, which reveals that Australia’s high net worth individuals (HNWIs) have the biggest appetite for residential property in the world despite increasing concern that there might be a property bubble developing in Australia: At 33.1%, the allocation

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Germany leads the way on housing

by Chris Becker I tend to give the Germans a hard time when it comes to their intra-European policy  – i.e take the benefits of a cheaper Mark (euro), overburden southern Europeans with cheap debt, delight in the profits and massive current account surplus and then demand fiscal austerity when it all goes pear-shaped. But

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Hockey, IMF back macro-prudential

By Leith van Onselen The International Monetary Fund (IMF) has dealt the RBA/APRA another credibility blow, endorsing macro-prudential controls on high risk mortgage lending in its communique to the G20: To mitigate financial stability risks from a prolonged period of low interest rates and prevent premature monetary tightening, macro-prudential tools should be the first line

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With skyscrapers, pride comes before the fall

By Catherine Cashmore, a market analyst, journalist, and policy thinker, with extensive industry experience in all aspects relating to property. Follow Catherine on Twitter or via her Blog. “Bill, how high can you make it so that it won’t fall down?” reportedly asked financier John J. Raskob, as he pulled out a thick pencil from

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6 years on from the GFC, what have we learnt?

By Catherine Cashmore, a market analyst, journalist, and policy thinker, with extensive industry experience in all aspects relating to property. Follow Catherine on Twitter or via her Blog. Five years on since the US recession ‘officially’ ended in June 2009, urban land prices are rising, the pattern of history is repeating, and this time, the

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London property earns more than Londoners

By Chris Becker It seems you can’t go wrong speculating on property, as capital gains in London – 19% for the year or £71,000 – are almost double the average post-tax income for Londoners! A shocking chart from FT Alphaville tells the tale: It’s even better in Sydney where house prices are up nearly 15% this year

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The Irish learn the hard way on housing

By Leith van Onselen In 2005, the UK’s Policy Exchange released a fascinating research paper describing (amongst other things) Ireland’s dysfunctional urban planning system, whereby the Government granted planning permits too late in response to rising demand, resulting in the building of large numbers of standardised, small, poor quality homes in satellite locations far away

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Poms mull macroprudential

By Leith van Onselen While Australia’s Reserve Bank continues to bury its head in the sand, the Bank of England (BoE) has joined the Reserve Bank of New Zealand in issuing stern warnings about risks building in the housing market, and is now looking to implement macro-prudential controls on mortgage lending. In an interview with

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A lesson in housing policy stupidity

By Leith van Onselen Professor Paul Cheshire from the London School of Economics has produced a new report slamming UK planning policy, which has dramatically forced-up urban land prices, especially in the South East, and disproportionately harmed the poor. From The Guardian: …restrictive planning laws have turned houses in the south-east into valuable assets in

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The rise of generation rentier

Cross-posted from the UK Conversation: In what he described as the most sweeping changes to pensions and savings since 1921, the United Kingdom’s George Osborne radically changed the rules which govern how pensioners get hold of their retirement savings. He may have just lit a fuse underneath an already heated housing market too. His decision

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Is housing the great investment delusion?

By Leith van Onselen Capital Markets’ Roger Bootle has published an interesting article in the UK Telegraph asking whether housing is “the greatest investment delusion known to man”: The worst aspect of all this [escalating house prices] is that although particular individuals become better off as a result, people overall do not. The housing market

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West agonises over Chinese realty binge

A bunch of stories today show that the capital flight out of China and into Western real estate is not a localised phenomenon, nor are the risks associated with it. In London, it become an issue worthy of street protests: Cheryl Coyne shouted “No more homes for millionaires!” with protesters dressed as pirates outside London

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The pitfalls of reverse mortgages

By Leith van Onselen The New York Times has published an interesting article on some of the pitfalls of reverse mortgages, which are exhausting inheritances across America: … a growing number of baby boomers [are] confronting a bitter inheritance: The same loans that were supposed to help their elderly parents stay in their houses are

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17million reasons rent control is efficient

The case of Herbert Sukenik being paid $17million in 2005 to leave his rent-controlled NYC apartment has been receiving a great deal of attention online recently. At the risk of perpetuating the brilliant viral marketing campaign for Michael Gross’ new book, which is in fact the source of the story, I want to make a

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Rich Chinese threaten to sue Canada for visa

I noted yesterday that Australia needs to take action to prevent an inflow of Chinese money from pricing Australian youth further out of the housing market. Canada recently took such steps by closing its wealthy investor visa program (that is booming here). Some Chinese millionaires are not happy: A group of wealthy mainlanders has criticised

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Housing supply determines price volatility

By Leith van Onselen For years I have argued that markets where land/housing 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/housing supply is relatively responsive (elastic) to

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Max Keiser gives MB a plug

By Leith van Onselen Earlier this week I published an article explaining how Australia’s housing obsession is killing productivity. The article seems to have resonated with the Keiser Report’s Stacey Herbert, who yesterday ran a segment discussing housing’s link to productivity, citing key quotes and charts from my post (video above). For those that are interested

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Canada blocks foreigners as house prices boom

By Leith van Onselen January’s house price results, released yesterday by Teranet, revealed that Canadian house values continued their upward march, posting a new all-time high after registering 0.4% growth in January, with prices also up 4.5% over the year and 31% above their April 2009 trough: In real terms, Canadian house prices also hit

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The difference between houses and chickens

By Leith van Onselen For years I have argued that the UK operates world’s worst practice when it comes to housing policy. A key tenet of the UK’s housing malaise is the highly restrictive UK planning system, which has severely limited land supply and forced-up the cost of housing – benefiting those that already own

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Sharks circle Canadian housing

By Leith van Onselen December’s house price results, released yesterday by Teranet, revealed that Canadian house values rose marginally over the month (+0.1%) to a new record high, with prices also up 3.8% over the year and 30% above their April 2009 trough: In real terms, Canadian house prices also hit a new peak, with

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Will the Swedes blow-up again?

By Leith van Onselen Sweden’s housing market shares a lot of similarities with Australia. As was the case in Australia, Sweden’s financial system was deregulated in the mid-1980s, which led to a house price boom and then correction as the Swedish economy entered recession in the early-1990s. However, whereas Australia’s banking system was almost brought

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UK pulls mortgage support as bubble grows

Cross-posted from Martin North’s DFA blog. Overnight the Bank of England announced the termination of their Funding for Lending (FLS) scheme, moving to direct assistance to the small and medium business sector. The FLS was a mechanism to give funding direct to the banks to enable them to lend to borrowers in an attempt to