Last week, Rortybomb published an interesting article entitled Investigating the Link between Debt, Deleveraging and the “Texas Miracle”. In the article appeared the below chart showing per capita debt balances in key US states using data extracted from The Federal Reserve Bank of New York quarterly data release (excel file available here): The chart shows large variances
Last month I posted about the Channel 9’s latest revision of the property spruiking show “the block” when I stated that.. The television hasn’t been to kind to the housing market recently. Sure the constant re-runs of Location, Location, Location, Selling Homes Australia and Grand Designs have been streaming out of the box, but more
Following on from my recent post, The case against home ownership, Canadian Business last week published a great article. entitled Rental complex, asking why more Canadians don’t rent – a question equally applicable to Australians. At over 2,800 words, it’s a long article (but well worth reading). Below are some of the key extracts. Note
Watch the full episode. See more PBS NewsHour. A few weeks back, in Aussie investors flock to US housing fund, I noted the relative undervaluation of US real estate compared with Australia, and how the newly launched US Masters Residential Property Fund, which is targeted at properties in the New Jersey area, was over-subscribed from
“The business of the United States used to be business. But somehow with all these Government programs, we turned the business of America into housing”… The above is just one of the great quotes from yesterday’s debate on Canada’s The Agenda (video below). The debate subject was The case against home ownership, and the panel
This blog has dedicated significant effort questioning the axioms underpinning Australia’s urban planning system. This system has grown increasingly restrictive as urban growth boundaries (UGBs), minimum targets for ‘brownfield’ development (urban consolidation), up-front infrastructure charges, amongst other measures, have been implemented across jurisdictions since the late 1990s/early 2000s. These urban planning tools, affectionately known amongst
I have talked previously about how the United Kingdom (UK) operates the worst kind of housing policy – one that pumps demand while placing a tight straight jacket on land/housing supply – the outcome of which is both unaffordable housing and a propensity for boom/bust property cycles (see below chart). Now the UK Government is
Following on from my earlier posts on the German, UK and Swedish housing markets, I now want to turn your attention to the Netherlands – a country that, in my view, offers a prime example of how not to run housing policy. The Dutch have devised a system that all but guarantees unaffordable housing and a
As reported in Fairfax last week, the US Masters Residential Property Fund (Investment Overview provided below) recently closed its initial public offering (IPO) for Australian investors, receiving more than double the minimum subscription. The Fund raised $69.5 million from over 1,500 investors, well above the minimum subscription level of $30 million, with the majority of
In conducting research for last night’s post on the German housing market, I came across some interesting information on the housing bubble developing in Sweden. It’s a story worth sharing since it offers important insights and parallels for Australia. Before I kick-off, first consider the below chart of real house prices since the mid-1980s: As
A few months ago, after posting numerous articles advocating the Texan approach to land-use planning, I promised fellow MacroBusiness blogger, The Prince, that I would undertake an analysis of the German housing system, which is regarded as amongst the most affordable and liberal in Europe. In my findings presented below, I have compared and contrasted the German housing system
I was disappointed in RBA Governor, Glenn Stevens, speech Wednesday. I had expected that Mr Stevens would at least acknowledge Australia’s Achilles heel – its high level of household indebtedness and house prices – and warn of the significant risks that these pose to the economy. Instead, Mr Stevens ignored the debt Godzilla and linked Australia’s house price appreciation to population growth. Interestingly,
In 1998, following the release of the Financial System (‘Wallis’) Inquiry’s final recommendations on financial system regulation, the Australian Government implemented a new organisational framework for the regulation of the financial system. Prior to the Wallis Inquiry, regulation was either governed by the states for some products or based on a sectoral approach with industry
Over the past few months, I have argued feverishly that housing markets with responsive land supply are both more affordable and less prone to bubbles/busts than markets where land supply is constrained by physical and/or regulatory barriers. In many of these articles, I have used Texas as an example of a housing market largely free
Following on from Popping Bubble’s recent post, Australia’s low level of unemployment is often held-up as a reason why home values won’t fall. According to this argument, home values will remain supported as long as people have jobs and can continue meeting their mortgage repayment obligations. For example, in last year’s infamous CBA investor presentation,
The US housing crash rolls on, with the Case-Shiller house price index showing prices fell in 19 of the 20 city markets it surveys in February. According to the Case-Shiller index, US home prices are now down 3.3% from a year ago (see below chart) and have fallen by around one-third since the housing bubble
Max Keiser yesterday posted a video exposé (below) on the damage caused by the bursting of the Irish housing bubble and how the bad debts of the Irish banks have been transferred to Irish taxpayers (h/t Mish and Rota Fortuna). For readers unfamiliar with what happened in Ireland, consider reading my December article, Unluck of the
It’s time for another trip down memory lane. It’s September 2007 and home prices in London have just started to fall, but are still holding up nationally (see below chart). UK households are growing increasingly nervous. After embarking on an almighty borrowing binge over the 2000s, as evident by household debt to disposable incomes rising
This years Demographia International Housing Affordability Survey ranked Hong Kong as the most unaffordable housing market out of the seven countries surveyed, with median home prices a whopping 11.4 times incomes. After falling some 23% over 6 months in the wake of the global financial crisis, Hong Kong’s housing market has been on a tear,
Let’s take a trip down memory lane. It’s early 2006 and the median house price in Los Angeles-Orange County, California has hit $582,000. Demographia has just released its latest International Housing Affordability Survey showing that Southern California has the most expensive housing market out of the six nations surveyed. Property speculation is at fever pitched.
This is a first home buyer grant. From the UK Telegraph: [A] controversial new mortgage deal is being launched by five local authorities and backed by Lloyds Banking Group, one of the lenders bailed out by the taxpayer during the credit crisis. The scheme is aimed at struggling first-time buyers who are unable to afford the
I was disappointed with The Economist’s recent special reports on housing. Whilst the reports captured the psychology and the demand-drivers of bubbles well (discussed in an earlier post), they failed to adequately capture the role of supply-side constraints. As far as I could see, the only reference to the supply-side of the housing market were
One thing I’ve always believed about investing (as opposed to speculating) is that it’s important to step back and take a look at the long-term picture. In the shorter term, markets are subject to periodic “manias, panics and crashes”, as Charles Kindleberger put it in his classic study of financial crises. But in the long-term,
The Telegraph today published a disturbing article on the dire state of the UK economy: Households face the most dramatic squeeze in living standards since the 1920s, the Governor of the Bank of England warned, as he reacted to the shock disclosure that the economy was shrinking again. Families will see their disposable income eaten up as
No doubt many readers have heard that the Australian Government is looking to follow Canada’s lead and implement a Government guarantee of residential mortgage-backed securities (RMBS), in order to foster greater competition in mortgage lending and reduce the power of the big four banks. Following on from David Llewellyn-Smith’s critique of this proposal, I thought it timely
Canada and Australia have a lot in common. Both economies are commodity exporters. Both countries largely dodged the global recession that has recently shocked the developed world. And both countries are said to have world-beating banking systems, with Canada’s ranked as the strongest and Australia’s ranked third strongest in the world by the World Economic Forum’s Global Competitiveness Report 2009-2010. As
