Global Housing

19

Canadian housing market on the ropes?

By Leith van Onselen For the past few years I have watched with interest the Canadian housing market’s continued rise in value. Whereas most other housing markets, including Australia’s, have taken a breather, Canada’s has powered-on, rising in value by 26% nationally since its April 2009 low, according to the Teranet house price index (see

3

UK sacrifices savers for housing

By Leith van Onselen In August last year, the Bank of England (BoE) introduced a scheme entitled Funding for Lending (FFL), which is designed to improve credit conditions in the UK, particularly for small and medium-sized enterprises (SMEs). Under the £80 billion scheme, UK banks are permitted to borrow up to 5% of the value

64

NZ housing hits political hot button

By Leith van Onselen The release of the 9th Annual Demographia International Housing Affordability Survey on Monday appears to have caused a political storm in New Zealand. This year’s Survey was particularly controversial in New Zealand for two reasons. Not only did it show deteriorating housing affordability, as measured by a worsening of New Zealand’s

8

A confidence hit for US housing?

By Leith van Onselen On Friday, I argued that the US housing market was experiencing a tentative recovery based on the fact that: 1) house prices had finally begun to increase, rising by 5% since their January 2012 lows; and 2) the number of dwelling starts in December rebounded to their highest level since June

59

US housing recovery continues

By Leith van Onselen The US housing recovery continued overnight with the release of Commerce Department data for the month of December showing housing starts rebounding to their highest level since June 2008, lifting to a seasonally-adjusted annual rate of 954,000 dwellings. This represented a 37% lift on December 2011 levels when housing starts were

35

Foreign buyers add to Auckland housing squeeze

By Leith van Onselen Auckland is by far New Zealand’s biggest city. It’s metropolitan area is home to around 1.5 million residents, or  roughly one-third of New Zealand’s population. It also has by far the most expensive housing in the country, with its stratified median house price hitting an all-time high of $572,825 in October

45

Auckland housing crisis an instrument of poor policy

By Leith van Onselen I wrote last year about the ridiculous housing policy being employed in Auckland, whereby the Auckland Council was seeking to tighten the city’s already highly restrictive urban growth boundary (called the “Metropolitan Urban Limit” or MUL) into an even tighter “Rural Urban Boundary” that would effectively ban development outside of the

23

Central london property bubbles again

By Leith van Onselen Above is an interesting video from the Financial Times about the Central London property bubble, which appears to have re-emerged on the back of heavy foreign buying. The video contains loads of interesting charts and analysis. For example, there’s this chart plotting Greater London property values against those in Miami (rebased

23

Dutch pay the price for poor housing policy

By Leith van Onselen In June last year, I published a detailed article, entitled Dutch show how not to run housing policy, which argued that the Netherlands housing system all but guarantees unaffordable housing and a susceptibility to housing bubbles, via: ridiculously easy credit, with a third of mortgages guaranteed by the government; mortgage interest

35

House bubble myopia: NY Fed edition

Courtesy of Mark the Graph: I am back at uni doing some study. In my research for an assignment on financial econometrics I came across this wonderful piece from December 2004. It was written by a senior economist and a vice president at the Federal Reserve Bank of New York. Home prices have been rising

85

Housing bottlenecks do not support prices

By Leith van Onselen Yesterday Bloomberg published one of the more economically egregious stories on housing market dynamics that I have seen in recent times. It argued, using the usual suspects, that housing supply restrictions will prevent falls in Australian house prices: While affordability measures such as household debt and home cost-to-income multiples exceed peaks

28

Can house prices rise when credit falls?

By Leith van Onselen Recent mortgage credit data coming out of New Zealand has been contradictory. According to the May 2012 Reserve Bank of New Zealand (RBNZ) Financial Stability Report (FSR), released earlier in the month, New Zealand’s households appear to be deleveraging, as evidenced by the below charts: 1. household debt to income has

8

Buying and renting in the USA

I came across this chart on Bloomie this morning: its their Rent to Price Index, which compares the median asking sales price vs asking rent. It’s sourced from the US Census Bureau and also includes a housing affordability index, which I’ve removed because I want to ask some questions about the dynamic between renting and

64

RBA mis-diagnoses the US housing bust

By Leith van Onselen The Reserve Bank of Australia’s (RBA) head of financial stability, Luci Ellis, last night delivered an eye-opening speech to the Federal Reserve Bank of Atlanta 2012 Financial Markets Conference. Ms Ellis lectured the American audience about why the US housing market bubbled and then busted, and explained why the Australian housing

3

Canadian taxpayers spared… for now

By Leith van Onselen The Teranet – National Bank Composite House Price Index was released last week, reporting that Canadian house prices recovered slightly after two straight months of declines. According to Teranet: Canadian home prices in January were up 0.1% from the previous month, according to the Teranet-National Bank National Composite House Price Index™.

43

The Las Vegas lesson for Australian property

By Leith van Onselen The above YouTube video shows spectacular satellite footage of Las Vegas’ rapid urban growth since the early-1970s. Las Vegas is home to one of the world’s largest housing bubbles/busts, whereby house prices rose sharply in the decade to 2007 before plunging more than 60% in the years following (see below chart).

13

UK first home buyers trapped

By Leith van Onselen The United Kingdom (UK) housing correction has now entered its fourth year. Depending on the indices used (explained here), UK home prices have declined by between -5% and -19% since peak (more in inflation-adjusted terms): However, it’s been a two-speed correction, with London home prices now rising, but much of the

7

Screws tighten on Canadian housing market

By Leith van Onselen Last month, in Canadian bubble trouble, I described in detail how the government-owned Canadian Mortgage Housing Corporation (CMHC), which has been the “great enabler” behind Canada’s debt-fuelled housing bubble, risks losing billions of taxpayer dollars in the event that the housing market experiences a severe correction: CMHC works by acting as

16

Taiwan bubble set to burst

We all know that sell side research tends to be optimistic, thus it is not very often that we SELL ratings. It so happened that one report coming out last week rated an entire sector with underweight, with all individual companies under coverage being rated as SELL. CLSA’s Taiwan banking analyst Dexter Hsu rated all

39

Canada’s bubble goes mainstream

By Leith van Onselen Friday’s article, Canadian Bubble Trouble, noted how the mainstream media (MSM) appeared to be turning from cheerleaders of the rapid rise in Canadian house prices to warning of a possible bubble and/or projecting falling housing prices. Over the past few days, the Canadian MSM appears to be shifting into overdrive, headlined

88

Canadian bubble trouble

By Leith van Onselen In the years following the global financial crisis (GFC), the Canadian and Australian housing markets were among the best performing in the English-speaking world. While housing markets in other English-speaking nations- most notably the United States, Ireland, the United Kingdom, and New Zealand – remained in a funk, Canada’s and Australia’s

15

S&P is right about Europe

As I am sure you are aware by now Standard and Poor’s rating services added some downside risk to Europe over the weekend: Standard & Poor’s Ratings Services today completed its review of its ratings on 16 eurozone sovereigns,  resulting in downgrades for nine eurozone sovereigns and affirmations of the ratings on seven others. We have lowered

40

UK first home buyers knackered

2011 was a strange year for the UK housing market. Home prices continued to track sideways, falling in real terms (see here for an explanation of the different indices): And affordability continued to improve: Yet, the number of first home buyers fell to its lowest level since records began in 1974: Around 187,000 people became

6

Chart of the Day: US house prices vs rents

Today’s chart comes from Calculated Risk as the S&P/Case-Shiller Home Price Indices were updated for September 2011 overnight (direct source here). There are 3 charts derived from the Case-Shiller data, nominal and real house prices and the house prices to rent ratio. The latter is the most interesting, in my opinion, as housing costs (purchase

51

How Phoenix housing boomed and busted

When analysing the US housing bubble, four states stand-out for the way in which home values rose into the stratosphere before crashing and burning: California, Nevada, Florida and Arizona (see below chart). Given the first three markets were covered in previous posts (see above links), I now want to analyse the Arizona housing market –

34

UK housing interests have a conniption

The battle for more affordable housing is heating-up in the UK. Since last week’s detailed article on the proposed reforms to the UK planning system – the centre piece of which involves implementing a “presumption in favour of sustainable development” in order to make home building in greenfield areas easier – opposition from existing homeowners