A weekend topic starting with the Vancouver Sun. "'If we can find a bunch of billionaires from around the world to move here, that would be a godsend. Because that’s where the revenue comes to take care of everybody else.' — New York City Mayor Michael Bloomberg, 2013."

"The torrent of foreign capital pouring into housing in desirable cities around the world is contorting how they physically look and how residents relate to each other, says an exceptional new book by Prof. Matthew Soules of the UBC school of architecture. New York, London, Vancouver and Toronto top the list of cities most sought after by the world’s rich — who own an average of three homes each for their personal use, Soules writes in Icebergs, Zombies and the Ultra-Thin: Architecture and Capitalism in the Twenty-First Century."

"Soules said many politicians in Vancouver and across Canada follow the same neo-liberal beliefs as former New York mayor Michael Bloomberg in trying to lure rich foreigners, hoping their extreme wealth will trickle down to the masses through development fees and taxation. He shows how the global emphasis on housing as just another commodity, not as shelter, is skewing housing design across North America, Europe, Oceania and Asia. It’s creating 'iceberg' mansions in which much of the living space is deep underground, 'zombie' neighbourhoods with costly but largely empty houses and a spate of 'ultrathin' residential towers."

"Metro Vancouverites are by no means the only ones worried about rich people buying properties and leaving them mostly empty, creating 'Zombie' neighbourhoods and towers. 'Much of HNWI property is scarcely inhabited,' writes Soules. New York City recently found 75,000 vacant pieds-a-terre. 'The latest Canadian census indicates nearly 100,000 vacant or unoccupied housing units in Toronto.' Sixty per cent of condos in Miami are secondary residences."

"A study in China, Soules writes, 'found a shocking 31 per cent' of all residential purchases were of a third home. And a 2017 China Housing Finance Survey concluded 'roughly 21 per cent of housing units sat empty in urban areas of China.'"

"'I believe Vancouver was actually an early incubator for the slender condominium tower that has since spread around the world. Slender towers are an integral ingredient in ‘Vancouverism.’ And I argue that finance capital prefers this architectural form,' he said. 'While Vancouverism purports to be about livability, it is at the same time a completely neo-liberal construct that works perfectly with the logic of finance capitalism. It can be said that the pencil towers of Manhattan are a logical conclusion to the slenderness that occurred earlier in Vancouver.'"

"The idiosyncratic Vancouver House, which looks like it’s about to fall over, is emblematic of what happens to housing when it is marketed almost entirely to the global rich. First, Vancouver House is quite skinny. Second, Soules writes, 'it will probably be mostly vacant.' Third, it has been marketed through presales, which is the buying and selling of condo units before they’ve been completed."

"The relatively new phenomenon of presales is 'remarkable' in history, says Soules, since it relies on humans buying a dwelling that doesn’t actually exist, like a speculative stock option. Fourth, Vancouver House was marketed almost entirely offshore — advertised through 'multi-language websites, billboards in cities such as Taipei and physical sales centres in major cities across Asia.'"

"According to Christie’s International Real Estate, luxury residential purchases made by non-local buyers amounted to 60 per cent of sales in London, 45 per cent in Miami and 40 per cent in San Francisco. Soules is not the only one left wondering: 'How extreme does the wealth gap have to become for the entire system to break down?'"

The Sonoma Index Tribune in California. "A well-financed Bay Area startup real-estate company called Pacaso is in the process of buying its first three Sonoma houses, with plans to immediately resell the properties to groups of six to eight co-owners, using a new model of second-home ownership. The red-hot housing market in Sonoma Valley is driven by a shortage of inventory and an abundance of demand - particularly for second homes."

"What effect Pacaso’s fractional home ownership real-estate model will have on Sonoma is sparking heated debate - and a group of neighbors has organized a campaign to stop such deals, which they and local housing advocates, like the the Sonoma Valley Housing Group, describe as an end-around scheme to skirt laws regulating commercial vacation rentals."

"Pacaso CEO Austin Allison told the Index-Tribune Tuesday that Pacaso can actually help alleviate the local housing shortage. 'In Sonoma, we are only offering high-end, luxury houses that are priced three-to-four times above the median,' he said. 'We are taking a group of eight people who might each remove a $730,000 house from Sonoma’s inventory and instead pooling their resources so these buyers can afford a really high-end luxury house together.'"

"Sonoma Mayor Logan Harvey disagrees. 'Pacaso is the newest addition in a long line of vulture capitalist companies here to put the final nail in the coffin of Sonoma's middle class,' he said. 'The advent of Pacaso and other horrific ‘innovations’ in the housing market are more examples of the growing chasm between the wealthy and the working class.'"

"Regardless of the company’s impact on Sonoma’s housing market, Old Winery Court homeowner Brad Day says most people just don’t want to live next to a co-owned house. Day says this isn’t NIMBY-ism. 'Pacaso is starting to look at homes all over town and overpaying for properties, which in no way helps our housing market,' he said. 'This purchase is just the tip of the iceberg.'"

From News.com.au in Australia. "Property markets are hot. I was at an auction the other day where the place sold for $375,000 over the top of the advertised range. Aussies are making the most of very low interest rates and buying houses in a frenzy. This is driving up prices across the country, as the next graph shows. Bizarrely, the city with the fastest house price growth – Melbourne – is also the one with the most empty homes. As the next graph shows, Melbourne has the country’s worst rental vacancy rate. 28,000 rental properties sit vacant – which is more than Sydney and over 4 per cent of all rentals in Melbourne."

"Sydney’s strong house price growth is also happening despite high rental vacancy, while in Canberra and Hobart strong property price growth looks more logical. What distinguishes Melbourne and Sydney of course is high rise towers full of apartments which are usually occupied by students, tourists and temporary workers from overseas. Those apartments are more vacant than usual as the borders are closed. In Melbourne’s CBD, the rental vacancy rate in February was 7.5 per cent, according to SQM. No wonder it seems empty on the streets there."

"Since December, house prices have kept rising. Property price data company CoreLogic says prices in Sydney have now set a new record. 'The fresh record high is great news for Sydney homeowners, but highlights the challenges for non-home owners looking to participate in the housing market as values rise faster than incomes,' says Tim Lawless, director of CoreLogic."

"Does this make sense?"

From the comments to this Interest New Zealand article. "Interest Only loan is the reason many Speculators are able to indulge in speculative activities. This is not a silver bullet but closest to silver bullet in targeting speculative demand and is the very reason that Mr Orr is hesitant to stop IO as the ponzi may actually stop."

One said, "Can't people just take the hint and buy investment property? The government and Reserve Bank want to make you wealthy. This is the greatest lolly scramble in a generation, prices and affordability don't matter…just buy."

A reply, "The Dutch had a similar Lolly scramble didn’t they? Lollies are never good for you long term."

The Globe and Mail in Canada. "The Bank of Canada has a stark message for Canadians: Interest rates are guaranteed to increase but home prices are not. With the pandemic’s low interest rates pushing over-leveraged borrowers to pile on mortgage debt, the central bank ranked household indebtedness and accelerating home prices among the biggest threats to the economy in the medium term."

"The average home price in the country has jumped more than 30 per cent during the health crisis, with prices climbing at a faster pace in the Toronto suburbs and smaller Ontario cities. The bank itself has played a role in stoking demand for real estate by holding interest rates at record lows over the past year, and promising not to raise them for some time."

"'Some people may be thinking that the kind of price increases we have seen recently will continue. That would be a mistake,' Bank of Canada Governor Tiff Macklem said at a news conference on Thursday. 'Interest rates are very low. That means there is more potential for them to go up.'"

"In its latest Financial System Review, the central bank warned that household vulnerabilities have intensified with the quality of borrowing deteriorating and speculative buying increasing. The bank found that the share of highly indebted households taking out mortgages is up significantly and now represents 22 per cent of all new mortgages."

"That is higher than during the 2016-2017 real estate boom, when spiking mortgage debt triggered stricter lending rules from Ottawa. In addition, highly indebted borrowers are making down payments that are less than 20 per cent of the purchase price of the property. The bank said this combination has been 'associated with a greater risk of falling behind on debt payment.'"

"Mr. Macklem defended the central bank’s decision to keep interest rates near zero for at least another year and repeated that monetary policy applies to the entire economy, many parts of which remain depressed. Ksenia Bushmeneva, economist at TD, said Mr. Macklem was right to be concerned and flag the risk of high household indebtedness. 'I felt that the governor has sent a strong message to Canadians, but I think the [central] bank has limited scope to play a larger role in cooling the housing market,' she said."

"Very little has been done to slow the real estate boom."

From KTAR News in Arizona. "All week long, KTAR News 92.3 FM has brought you stories of buyers, builders and leaders who have described the agony of trying to find homes in an increasingly expensive market. Experts offer no easy fixes, but fear not as they still offer solutions. The real estate market will correct itself eventually, but not by much. 'When that time comes, I don’t know if it’s a year out, or six quarters out,' said Chris Camacho, CEO of the Greater Phoenix Economic Council."

"Camacho calls for more homebuyers’ credits and access to equity. Meanwhile, Arizona desperately needs builders and skilled workers — and schools to train more of them — as we emerge from the COVID-19 pandemic. 'As the stimulus burns off, I hope that we head back to under 6% unemployment,' Camacho said."

"He also puts forth an unpopular solution — raising mortgage interest rates to reduce buyer demand and increase housing supplies. 'The Fed is trying to help balance this, help people recover from this pandemic, and at the same time, create the right type of monetary policy to ensure that we see the right type of balanced growth going forward,' Camacho said."