thehousingbubble@gmail.com
Blog

A Strategy Now Backfiring Badly On The Culprits

It’s an international desk clearing post. “Brad Henderson, CEO of Sotheby’s, said recovery in Calgary’s top-tier real estate market has remained unsettled, in parallel to the city’s economic progress. In recent months, industry and consumer confidence have faltered in light of the city’s rising unemployment rate. While an entrenched buyers’ market is forecast that pending inventory will be the deciding factor in fall market conditions and housing values. ‘There is a mounting risk that rising supply will place downward pressure on prices this fall,’ added the report.”

“Following a lacklustre summer performance, Metro Vancouver’s $1 million-plus real estate market is set to see even greater declines this fall, according to a Sotheby’s. Brad Henderson said, ‘High-end sales and prices are softening in Vancouver, not only in the single family home segment, but across the city’s heated condominium and attached home markets. In the upcoming fall market, it will be buyers and investors who will hold the upper hand.'”

“So what’s happening at the top end of the market today? The estate agents’ windows are full of properties that have been for sale forever. One Edwardian pile in South Dublin has been on the market for five years and had its price reduced in increments by €1.5m. It’s still for sale. A big country house has also been on the market for five years with €7.5m shaved off. No one wants to buy them because they are overpriced.”

“With the mid market also softening in some city locations, such a strategy is now backfiring badly on the culprits. Meantime, banks and funds have been getting to grips with bad loans and pushing incumbents to sell. If you’re thus strapped, placing your home on the market for an unsaleable price is a way of buying time. The deliberately overpriced category also includes divorced spouses who don’t want to move when it’s time to sell and divide.”

“House prices in London’s top 10 most expensive streets have all fallen over the last year, in a fresh sign of the slump sweeping the capital’s high-end property market. Property website Zoopla’s 2018 rich list has found that on average more than £4.5m has been wiped off the total average house price from the top 10 priciest streets in the last year.”

“In Kensington and Chelsea – a London borough that has become synonymous with luxury houses and millionaire residents – house prices have fallen nearly 14 per cent in the last year.”

“Hong Kong property prices are being cut as an interest rate rise looms. Fears of an interest rate rise, the resulting mortgage cost increases and their effect on the already weakening yuan are forcing home sellers to reduce their asking prices.”

“It’s interesting to note that a number of mid-to-low properties are now on sale for less than their bank valuations, as this indicates homeowners aren’t in a positive mood as regards the prospect of a sale. In the marketplace, discounts of around 12 to 13 per cent are now common, with realtors in the region believing a price correction of up to 15 per cent is now underway.”

“Commercial sellers in particular are attempting to unload unsold stock by cutting prices to attract new buyers, preferring to cash in rather than hold the properties and wait for the next period of price increases. The trend is expected to continue downwards, with major players in the field seeing a slowdown of interest as well as actual prices realised coinciding with a drop in square footage prices.”

“The government will reconsider the exemption of Sales and Services Tax (SST) on construction materials if house prices are not reduced, said Finance Minister Lim Guan Eng. Rehda Malaysia president Datuk Soam Heng Choon urged all developers to pass on all savings back to house buyers, on top of any discounts and rebates that they are offering.”

“‘We want to see price reduction. I am not interested to see additional freebies. That is meaningless. We want to see prices lowered, that’s all,’ said Eng.”

“House prices are finally dropping in Sydney and Melbourne but scary predictions about the market may have left some first home buyers wondering whether it’s a good time to buy. Property expert Michael Yardney said it was a very confusing time for first home buyers because of the mixed messages around the possibility of a housing crash and interest rate rises.”

“‘Last year they suffered from FOMO (Fear of Missing Out) and every week they were reading about property prices going up and they thought they had missed the boat,’ Mr Yardney told news.com.au. ‘Today it’s the opposite. They are thinking if they buy now, their property could be worth less down the track.'”

“Mr Yardney said properties had doubled in value every 10 years for the past 30 years, when good records started being kept. ‘As long as you bought a good property at a fair price — and waited — it went up,’ he said.”

“Something home buyers should be realistic about though, is price growth. ‘Property prices have experienced double digit growth in Melbourne and Sydney but that was a boom and it was unsustainable,’ he said. ‘You’ve got to have realistic expectations, that you are buying a house to provide shelter for your family, to have control over your environment … and so you can decide whether you want things like a pet.'”

“Once you have bought your own place, don’t keep looking at properties. ‘It’s normal to have buyers remorse,’ he said. ‘Anytime you purchase an expensive item, like a handbag or suit, you begin thinking you could have paid less or got something else instead. Be assured, a well located property in Australia, despite the ups and downs, have always increased in value.'”

“Over the past year, some of Sydney’s waterfront suburbs have seen a drop of more than $200,000 in median home prices, far more severe than the $50,000 drop seen throughout Sydney as a whole.”

“Among the most severely affected are beach-side suburb Hunters Hill, which saw its median apartment price slump by $276,150, and tourist precinct the Rocks, which saw median home prices plunge by $390,000 – each area seeing roughly a fifth of value lost, 15 to 20% reductions pervasive in Sydney’s shore-front locations.”

Related Posts
This Post Has 26 Comments

  1. ‘We want to see price reduction. I am not interested to see additional freebies. That is meaningless. We want to see prices lowered, that’s all’

    But the guberment will never let shack prices fall, say the trolls.

    1. What a brilliant strategy to achieve affordability. Has calling for price reductions outright been attempted yet in the U.S.?

  2. ‘Be assured, a well located property in Australia, despite the ups and downs, have always increased in value.’

    Mike, meet Crow. Crow, Mike:

    ‘Over the past year, some of Sydney’s waterfront suburbs have seen a drop of more than $200,000 in median home prices, far more severe than the $50,000 drop seen throughout Sydney as a whole…the Rocks, which saw median home prices plunge by $390,000 – each area seeing roughly a fifth of value lost, 15 to 20% reductions pervasive in Sydney’s shore-front locations.

  3. “Mr Yardney said properties had doubled in value every 10 years for the past 30 years, when good records started being kept. ‘As long as you bought a good property at a fair price — and waited — it went up,’ he said.”

    Great! Just let me go get my old time machine and go back 30 years ago, buy several properties and make sure I sell all of them last year. I also bet income has double every 10 years for the last 30 years too, right Mr. Yardney? Or this is the biggest bubble in human history.

    “Once you have bought your own place, don’t keep looking at properties. ‘It’s normal to have buyers remorse,’ he said. ‘Anytime you purchase an expensive item, like a handbag or suit, you begin thinking you could have paid less or got something else instead. Be assured, a well located property in Australia, despite the ups and downs, have always increased in value.’”

    Not if you brought recently. So you’re giving me advice to buy a house but said prices can continue to fall for years?

    1. ‘Or this is the biggest bubble in human history’

      Especially for Sydney. The hottest market on the planet within the last year. Like Hong Kong. I’ve lost count of the world beater turned bowl swirler in less than a year.

    2. But but a few years ago during the bubble time, there was no remorse. What’s changed? Oh wait, never mind.

      So I guess it’s always a good time to buy a house.

    1. Hopefully the all-cash Chinese investors can keep supporting prices, as end-user purchase demand is headed down the crapper.

  5. ‘With the mid market also softening in some city locations, such a strategy is now backfiring badly on the culprits. Meantime, banks and funds have been getting to grips with bad loans and pushing incumbents to sell. If you’re thus strapped, placing your home on the market for an unsaleable price is a way of buying time’

    This quick turnaround in Ireland is notable. Just a month ago articles were imploring their central bank to let them borrow even more to get on the ladder.

    Yes, that’s right, the central bank over there has been popping the bubble.

    1. Guess these bag holders are “buying time”….

      https://www.trulia.com/p/ca/santa-cruz/1307-delaware-ave-santa-cruz-ca-95060–2084337355

      This shack price doesn’t make any sense. I follow RE around here daily and all the homes on the market are either sitting or getting reduced. Even got a spotlight on HBB recently as Santa Cruz media covered the down market. This really goes to show that there are still some people who think they can get the price they “want” as if they have lines of Chinese investors ready to save them from the imminent foreclosure.

  6. “Once you have bought your own place, don’t keep looking at properties.”

    Don’t look Ethel!

    But it was too late.

  8. Something about this California crater: it’s not in the central valley (that I’ve come across). It’s not Indio, nor Eureka. It’s the Palo Alto’s, San Jose, San Diego, Orange County, Los Angeles, San Francisco, Sacramento and Sonoma, etc. This has really been an unbelievable turn of events.

    And up north it went into Seattle. Not Olympia or Yakima, but right into the heart of the city.

    1. Well just a guess here, I really think the ramp up was from foreign investments and they targeted spots that have a track record for high availability of jobs. I can say for almost certain that the Bay Area tech boom, pharma, silly con valley growth was viewed as a safe haven to park there cash and they flawked here in droves whether on a realtor paid for tour or word of mouth speculation from an early investor that got in low. All the people that moved here for work or FBs that got mixed in were just unknowing participants in this tulip mania, they will be the ones that will tell the stories of how they lost there shack. What “I’m” seeing now is that foreign money is gone, they move around as if harvesting crop fields, strip one, move to the next, vultures really.

      1. BubblevilleCa – I think you’re spot on.

        There a luxury ‘bus’ or van – one of those Sprinter chassis thing with a huge Mercedes logo on the front – that is parked up by the Tiger Garden Chinese restaurant here on Mercer Island. It was used to shuttle Chinese visitors around the island on ‘tours’. Usually I’d see it parked prominently off to the side and that it was moved or was out regularly (I’d come to the stone-fired pizza truck and grocery store next to it and see it from there) . On the weekend evenings, you’d see groups of obviously non-local Chinese there at the restaurant (crappy food imho) – packs of men all dressed like mobsters and smoking, for examples.

        For the last few month’s the van has been parked further away and I haven’t seen signs that it’s been getting used.

        It may mean nothing, but I think it’s likely a sign of majorly cooled off ‘foreign investment’ around here.

        1. I guess only time will tell… Thanks for the WA feet on the ground report! The spineless realturds that organized these “investment tours” are surely to blame. It’s insanity and now reality is finally setting in

Comments are closed.