A report from the Globe and Mail. "It was Mar. 27, 2020, and the central bank had just unveiled a plan to buy Canadian government bonds at the astounding pace of at least $5-billion a week. 'Some may suggest this is using a lot of firepower,' Bank of Canada governor Stephen Poloz said of the program, which would help quadruple the size of the bank’s balance sheet within months. 'But a firefighter has never been criticized for using too much water.'"

"A year later, however, economists and others are starting to assess the water damage left by the firefighters, to stick with Mr. Poloz’s metaphor. Canada is not alone. Central bankers around the world responded to the COVID-19 shock with an unparalleled surge in asset purchases. Now, they stand at the brink of a great unwinding."

"Particularly alarming were the dramatically widening spreads between bid and ask prices in markets for U.S. and Canadian government bonds – the prices prospective buyers and sellers are offering each other. These markets are the bedrock of the entire system for borrowing and lending. Over the next two weeks, as the Bank of Canada rolled out a wave of actions to address numerous market strains, there remained an elephant in the room. The biggest tool in the bank’s arsenal – outright purchases of government bonds, known as quantitative easing – still stood unused."

"It would be a major step for a central bank that had never tried QE before. That time came on Mar. 27, when the bank took its key rate down to 0.25 per cent – what the bank identified as its effective bottom – and announced the $5-billion-a-week bond-buying program."

"'That put the complete package on the table,' Mr. Poloz said. 'We wanted to be sizable. So we said, what would be impressive, so the markets would be calmed by it? We picked $5-billion a week – actually, we said ‘at least’ $5-billion per week,' he said. 'Reporters were asking me, ‘What’s the maximum, how big could it be?’ I said, ‘Well, it’s unlimited. … It’s whatever the market needs.'"

"The bank, under new governor Tiff Macklem, is still buying at least $4-billion of government bonds a week as part of a quantitative easing program. As the economic recovery picks up steam, some analysts are wondering if the bank is overplaying its hand. The central bank’s ultraeasy monetary policy and record low interest rates are contributing to a housing market frenzy and fuelling fears of inflation. Canadian home buyers, meanwhile, are gorging on cheap mortgage debt and driving real estate prices to new highs. Mr. Macklem noted in February that signs of 'excess exuberance' were emerging in the housing market. Things have become even more frenzied since then."

From Better Dwelling. "Canadians are panic hoarding again… but this time it’s real estate and debt, says a Big Six bank. The country’s finance minister recently said they were 'watching' housing, and its impact on first-time buyers. This has BMO senior economist Robert Kavcic wondering if they understand the issue."

"The overheating isn’t due to an economic boom either. The economy has yet to recover from pre-pandemic levels, and isn’t expected to until next year. Instead, he observes prices are rising due to the 'widespread belief that there’s nothing to stop the momentum.' Adding, 'after all, we’ve been told repeatedly that interest rates aren’t moving.'"

"The moral hazard has created the belief you can’t lose, and there’s going to be a perpetual shortage of housing. Investors, first-time buyers, and even recreational users, now believe the government will work to push prices higher. 'Canadians in some markets are now buying houses, rural properties and cottages like they were buying toilet paper a year ago.'"

The Fifth Estate. "In a chaotic time for the nation’s economy, some will find reassurance in one unchanging facet: Australian governments of all kinds, and the Reserve Bank, are committed to policies that will raise home prices. Promoting inflation in the price of residential property seems to be the formal aim of public policy. It certainly has that effect, along with another direct consequence – that of rendering home-ownership unachievable for at least a third of the population."

"Despite the population stalling (rising demand from population growth is the usual reason people give for rising home prices) and despite a significant rise in unemployment, a radical decline in GDP and continued economic anxiety and uncertainty, Australia has returned to its default model of high house price inflation."

From Dmarge. "Australia’s crazy expensive properties are the object of much spite. But as much as those who can’t afford them (read: us) throw barbs from our rented houses (characterising it all as a ridiculous bubble and hoping it pops), it seems determined, for now, to continue blazing into the sky. AMP Capital chief economist Shane Oliver told the ABC last year we’re living in a 'super cycle of debt,' comparing the early 1990s recession with now, showing how our level of household debt has increased over the last thirty years."

"'During the early 1990s recession, the level of household debt in Australia was around 40 per cent of income, whereas now it is close to 200 per cent — one of the highest levels in the world,' (ABC). 'Each time there’s a downturn people get worried about debt and pay some of it back, but before things go too far [into the positive], the Reserve Bank cuts rates and people start borrowing again — we go back to a new level of debt and it starts the cycle again.'"

The Big Smoke Australia. "In NSW, more than 37,175 people are homeless while more than 68,000 properties sit vacant. That equates to two empty properties for every person experiencing homelessness in this state. Indeed, many would say that it’s unjustifiable for a society to allow some of its members to go without shelter, while others own vacant dwellings."

"As former Greens Senator Lee Rhiannon pointed out in 2017, the number that is left is an estimate of long-term speculative vacancies. 'These aren’t properties in between buyers,' she told Sydney Criminal Lawyers. 'They’re being deliberately left vacant to speculate on rising prices.'"

"While there’s a gaping lack of affordable housing in Australia, along with talk of a housing shortage, there’s plenty of property speculation going on. Prosper Australia findings indicate that nationwide there are about 300,000 speculative vacancies, which accounts for 3% of all housing."

"According to Ms Rhiannon, it comes down to 'a relatively small number of people with huge wealth,' who 'need a place to park it.' She questioned why someone would 'bother with tenants and real estate agents' when they can simply make money by letting their property 'sit there.'"

From Jacobin Magazine. "Occupying a three-mile stretch alongside the River Thames in south London is 'VNEB.' Between Vauxhall and Battersea, via Nine Elms (hence the acronym), thousands of new apartments are being built. But even before the pandemic, we knew the property industry was systemically dysfunctional. As Oliver Wainwright wrote in a Guardian piece on VNEB last month: 'Roughly the size of Monaco, the new district has all the makings of a similarly exclusive fiefdom, an international investors’ playground where regular Londoners are pushed to the very edges, or cut out of the picture altogether.'"

"Around the world, many places are already disfigured by buildings oblivious to society’s needs. The potential for such projects to stall and go bust is nothing new, but COVID-19 may accelerate this. This exposes a fundamental flaw in attitudes toward cities that only sees them as commodities. The number of long-term empty homes provides graphic evidence of a failed system. Going into the pandemic, London already had at least 22,500 of them (and ten times that number of people on social housing waiting lists)."

"None of the mega-developments currently on-site in London, New York, or other major cities were designed for 50 percent occupancy. They are also heavily reliant on public finance. For decades, ordinary residents have been pushed out of cities like London and New York to make room for offices and luxury apartments. But the pandemic has massively reduced demand for these same locations — turning city centers into ghost towns, full of shiny new buildings that no one needs. Once the pandemic has eased, we are likely to have unused buildings on an unprecedented scale."

The New York Post. "At 60-stories high and 684-feet tall, Boston’s Millennium Tower, a residential luxury high-rise that opened in 2016, is the fourth-tallest building in the city. It is also a virtual ghost town."

"That’s because the Millennium is less of a playground for the rich and more of a tax shelter in the sky, writes Chuck Collins in his new book, 'The Wealth Hoarders: How Billionaires Pay Millions to Hide Trillions', out next month."

"'Over 35 percent of the 443 condominiums are owned by shell companies and trusts, and almost 80 percent of the unit owners do not claim a residential exemption, indicating that the condo is not their primary home,' writes Collins. 'With average condominiums selling for over $4 million, Millennium Tower is not only a wealthy residence for the rich, but also a ‘wealth storage unit’ for global capital looking to park itself and hold value.'"

"Many have used anonymous shell companies to park their wealth in luxury real estate in big cities nationwide, such as the Millennium in Boston and One57 on New York’s Central Park. According to The New York Times, '54 percent of real estate purchased in New York for more than $5 million was acquired in the name of anonymous shell companies' in 2014, Collins writes. 'In the six most expensive condo projects in the city, the owners in a majority of units were hidden by shell companies, including 77 percent of the units in One57 and 69 percent of the units at The Plaza. The value of the 900 condominiums in these six buildings was equal to the value of 20,000 average American homes.'"