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One Of The Safest Routes To Riches And Glory Is Increasingly Becoming A Miserable Story Of Tears And Shattered Dreams

A report from the Globe and Mail in Canada. “97 Stuart Ave., Toronto: This custom-built, four-bedroom residence was unsuccessfully listed around $3.5-million early 2018. So, the sellers hired different agents who pushed for a $3.149-million starting price last summer and slashed it by roughly $150,000 increments every few months it was relisted. The first formal offer resulted in a $2.64-million bid in July, 2019.”

“‘North of the 401 [highway], things have slowed down significantly,’ agent Andre Kutyan said. ‘At the beginning of the year, in the last two quarters, there were half a dozen sales in the area in the $2.6-million and $2.75-million range. Competing listings were not only in this area, but in Willowdale West and Willowdale East, so … anything that’s transacted these days in the last six to 12 months have had to adjust their prices to try to move anything.'”

The Financial Mirror on Cyprus. “There is an over-supply of real estate coming into the market for sale by the financiers and various funds that have acquired mortgaged properties to resell. Whereas the advertised prices are not as attractive as one might think, be it that one expects to secure discounts – in the region of 10%-15% depending on the difficulty to dispose of the asset, the more difficult to sell an asset, the bigger the expected discount.”

From Construction Kenya. “A sharp slowdown in Kenya’s real estate growth has adversely impacted key players in the sector, many of whom are now fighting to remain in business. From the country’s top mortgage financier to giant property developers and high-net worth individual builders, a huge number of investors are struggling to meet their financial duties amid dwindling demand for property.”

“Indeed, the Kenyan real estate sector, which has for many years remained one of the safest routes to riches and glory, is increasingly becoming a miserable story of tears and shattered dreams. The downturn has already claimed its fair share of casualties. Leading mortgage financier HF Group has, for example, listed for auction Sh2.5 billion worth of houses as its fights to clean its loan book. Majority of the houses on sale are located in Nairobi and its environs and are listed with reserve prices of between Sh3.4 million and Sh300 million.”

From India Today. “The real estate sector in India is arguably going through one of the worst phases in recent times. The country’s financial capital Mumbai is riddled with a large number of unfinished projects and an equally large number of unsold units in the city and suburbs. And the numbers have only been rising over the last couple of years.”

“The period between 2017 and 2019 has been a complete contrast to the period between 2006 and 2010 when investors made merry in this sector. ‘Many investors like me had invested in a lot of projects before these changes were brought about. So today we are stuck,’ says real estate investor Mandar Sarmankar.”

From Interest New Zealand. “According to the Real Estate Institute of New Zealand (REINZ), five regions posted significant falls in their lower quartile selling prices in July compared to June. They were Northland, Auckland, Hawke’s Bay, Taranaki, Nelson/Marlborough, while Canterbury and Southland posted modest falls.”

“The biggest drop in the lower quartile price was in the Hawke’s Bay, where it fell back from its record high of $395,000 in June to $370,000 in July (-6.3%), followed by Auckland where it dropped from $671,000 in June to $650,000 in July (-3.1%). July was the fourth consecutive month that the lower quartile price has fallen in Auckland, dropping by $30,000 (-4.4%) over that period from its record equalling high of $680,000 in March.”

“However the price falls were not uniform across the Auckland region. The biggest fall was in Auckland Central (the suburbs located within the old boundaries of the former Auckland City Council) where the lower quartile price dropped by a staggering $123,000 (-17.4%) from $708,000 in June to $585,000 in July. That was the first time that the lower quartile price in the Central Auckland suburbs has been below $600,000 since October 2017.”

From Domain News in Australia. “Apartment sales have tumbled and new apartment listings views have taken a dive as buyers become more cautious than ever before in the wake of unprecedented defects found in residential buildings across Sydney. Since the revelation of structural defects in Opal Tower at Sydney Olympic Park late last year, apartment sales in the suburb have fallen away, dropping 85 per cent in the six months to June compared to the same time last year, new Domain data shows.”

“The defects have compounded problems associated with the broader market downturn, said PM Realty selling agent Perly Cundasamy. ‘[Buyers] are a little bit hesitant. I’ve just exchanged one contract,’ Ms Cundasamy said.”

From News.com.au in Australia. “Mascot Towers’ apartment owners have claimed they were forced into agreeing to pay millions for repairs to the stricken buildings, even after voting against the original plan. As the changes were made and pushed through the meeting, unit owners were also told to accept paying the loans back over a drastically reduced amount of time, of nine months, instead of 15 years.”

“As a result, owners would be expected to fork out almost $6000 a month on average in repair bills. ‘My partner and I are very sad and stressed,’ the unit owner told news.com.au. ‘I have no idea how I can make this large payment.'”

“‘Unlike some apparently wealthy owners, we don’t have enough savings to pay our share. My bank declined to extend my home loan on Friday,’ he said. The owner told news.com.au the couple had been left with no options but for his partner to sell all their assets to try and keep them afloat for the time being.”

This Post Has 42 Comments
  1. ‘My partner and I are very sad and stressed…I have no idea how I can make this large payment’

    Well, it was cheaper than renting.

    ‘Unlike some apparently wealthy owners, we don’t have enough savings to pay our share. My bank declined to extend my home loan on Friday’

    Those bashtards! What’s that saying about bankers and umbrellas?

  2. ‘At the beginning of the year, in the last two quarters, there were half a dozen sales in the area in the $2.6-million and $2.75-million range. Competing listings were not only in this area, but in Willowdale West and Willowdale East, so … anything that’s transacted these days in the last six to 12 months have had to adjust their prices to try to move anything’

    But. Toronto red hot? Somebody is a lion!

      1. Mumbai, Nairobi, Sydney and Auckland: all at one time the hottest residential real estate on the planet.

        1. Majority of the houses on sale are located in Nairobi and its environs and are listed with reserve prices of between Sh3.4 million and Sh300 million.”

          Ok, $30,000. Sure makes our friends who think you can’t escape the $300,000 debt shack system in the US should stop and think.

        1. I believe the shorter days send ’em southward well before the food chain begins to disappear in the Fall. I haven’t seen ’em heading south yet up here in the Columbia Basin, but it’s dark at 8:00:PM now. The family home RE selling season is over…kids are back in school.

    1. 20 years ago this was a great working class neighbourhood.

      They then starting ripping down ’50s and ’60’s bungalows and build much bigger houses on the lots.

    2. WFT are Gaggenau appliances you ask – they are apparently super expensive Danish ovens/appliances. The 400 series sells for $5K new (but there is free shipping).

      —–
      “The principal resident is a builder by trade, so he put in a lot of extras into this house that were ahead of [their] time.”

      For instance, it’s equipped with Gaggenau appliances, “which you don’t see [even] in $5- or $6-million homes,” Mr. Kutyan said.

      “[Plus] newer homes don’t have these below-grade garages anymore because the bylaws changed since this house was built.”

  3. Wonder how the “bail in” of banks of Cyprus worked out?

    “The Financial Mirror on Cyprus. “There is an over-supply of real estate coming into the market for sale by the financiers and various funds that have acquired mortgaged properties to resell – the more difficult to sell an asset, the bigger the expected discount.”

    1. the financial times claims that there was not a big impact – which i find hard to believe…. Must have been an FSI funded survey.
      ——–

      Their main finding is that the bail-in encouraged Cypriot savers to hold less wealth in bank accounts:

      This ~25 per cent decline in domestic bank deposits was not just the effect of the government’s confiscation. It was also a reallocation by savers away from an untrustworthy banking system into physical currency:

      In the short-term, this shift was driven only by savers who had lost money on things that were supposed to be safe. Bank shareholders lost money as well, but the survey data from Brown et al found that shareholders did not increase their holdings of cash if they had avoided any haircut on deposits or bonds:

  4. Holy Toledo!

    That sure was less expensive than renting.

    “As a result, owners would be expected to fork out almost $6000 a month on average in repair bills.”

  5. Turning shelter into a speculative get-rich-quick scheme, resulting in it becoming an overpriced luxury good, was the dumbest move the world could have ever made. In turn, discretionary income was stolen from everywhere else in the economy, and the “misery index” spiked for most humans.

    1. “Turning shelter into a speculative get-rich-quick scheme, resulting in it becoming an overpriced luxury good, was the dumbest move the world could have ever made.”

      Yeah? It sounds to me that you are not finanially positioned properly.

      In my view, with my financial positioning, this dumbest move the world has ever made allows me to enjoy a life of complete leisure.

      Pukes work hard for money and then send to me huge chunks of what they earn, each and every month.

      This turning shelter into a speculative get-rich-quick scheme would only work if the planet’s population was composed of totally dumbed-down greedy fools who have miracously bought into the incredibly stupid concept that price supported by unsupportable debt somehow translates to wealth.

      “In turn, discretionary income was stolen from everywhere else in the economy, and the ‘misery index’ spiked for most humans.”

      Discretionary income wasn’t stolen, it was willingly handed over.

    2. dumbest move the world

      Individuals have made decisions, some to speculate with borrowed money, some to live below their real means.

      I caught a bunch of fish last week on a pristine lake up on the Northern Canadian shield. The best was a Northern Pike of 30 in. I was happy to release him to grow some more. I ate his little brother though. Life is good when you don’t have to pay a mortgage.

  6. “Indeed, the Kenyan real estate sector, which has for many years remained one of the safest routes to riches and glory, is increasingly becoming a miserable story of tears and shattered dreams.

    No so. I’m laughing my ass off.

  7. “As a result, owners would be expected to fork out almost $6000 a month on average in repair bills. ‘My partner and I are very sad and stressed,’ the unit owner told news.com.au. ‘I have no idea how I can make this large payment.’”

    1. Color your “partner” gone.
    2. Stamp your little feet!

  8. “‘Unlike some apparently wealthy owners, we don’t have enough savings to pay our share. My bank declined to extend my home loan on Friday,’ he said. The owner told news.com.au the couple had been left with no options but for his partner to sell all their assets to try and keep them afloat for the time being.”

    Sounds like another FB in over his head. Your partner will soon be heading out in search of greener pastures.

  9. It’s interesting how much things can change in a short time:

    ‘When Calgary won its bid to host the 2023 World Petroleum Congress, it did so by a whisker. Canada’s energy capital beat out Baku, Azerbaijan, by one vote on the fourth ballot of an election among petroleum-producing nations this past June. The triennial event is dubbed the “Olympics of oil and gas,” and Calgary last hosted it in 2000. But this victory was extra sweet because in the previous election, the city was defeated by its chief rival, Houston, which will host next year’s event.’

    “What a shot in the arm for the Canadian energy sector,” Calgary Mayor Naheed Nenshi gushed following the vote. “They understood that Calgary remains an epicentre—a global epicentre—for the world oil and gas industry.”

    ‘Given the drubbing Alberta’s oil sands have taken in recent years, Calgary could sure use the international recognition and the economic boost. Despite Nenshi’s cheerleading, the city is a long way from restoring its cachet as a global energy hub. Calgary is buffeted by a cooling housing market, a glut of office space and one of the highest unemployment rates in the country’

    https://www.theglobeandmail.com/business/rob-magazine/article-while-calgary-sputters-houston-booms/

    Before Vancouver, before Toronto, Calgary was the golden city for shack sweet equity in Canada. Now look at it.

    1. I ran into a pay wall. So I do not know if the article covers it but the blocking of pipelines has crippled the oil industry in Canada. A significant amount of oil is being moved by rail which costs more money and ironically emits more co2 per barrel than by pipeline but the capacity is still too small. Thus, the price obtained per barrel by the producers has dropped below production costs many months. It is great news for Texas shale oil producers but terrible for the entire Canadian economy. The government substitutes debt driven consumer spending with its housing bubble acting as the collateral for the loans. What could go wrong?

    2. a shot in the arm

      Hosting a convention will do little to alter their economic reality.

      Anyway, paywall.

  10. I came across this just now:

    ‘Immigrants interviewed for this story say they face high rents and racism in Half Moon Bay…Because immigrant families are often large or live with extended family, many houses and rooms are overcrowded and crammed with too many people in too small of a space.’

    “The rent is very expensive and all families live with many people in the same house,” Ferrera said. “When the cost goes up, more people come … Nobody has their own space.”

    ‘Angelina Valdez agreed that money for rent is her largest concern and she doesn’t think that is changing soon. “You are working only to pay the bills and the rent,” she said. “There is nothing to save and nothing for the future to buy a house.”

    That’s OK Angelina, the rest of us will give you welfare while California won’t deport your sorry ass.

    ‘Although Alvarado and others interviewed have considered leaving Half Moon Bay due to the rising rent prices, they have chosen to stay put. The town provides a safe and quiet community and necessary resources. For example, Alvarado’s son is currently in therapy due to anxiety she said he suffers due to current U.S. immigration policy. Her son is terrified that he would be separated from his family.’

    “He is 6 years old and realizes what is happening,” she said. Alvarado said she cannot return home to her native Mexican town, which is plagued with gang violence, the reason the family left in the first place.’

    “(Before coming to the U.S.) I never imagined that it was so difficult and that there were such racist people,” Alvarado said. “We do our work, we contribute … We are not a burden for California.”

    Alright you racist bashtards in California, shape up! We need some emotional support animals and $250/hour therapy for this little kid, even though he’d get shot back home. Boo hoo! The comment to the article:

    ‘Inconsistencies and false statements are rampant in this story. “Patti Rosas” states that HMB is a “happy community”. Juxtaposed in the next paragraph, the writer refers to (unnamed) immigrants who were interviewed for this story who say they face racism. Not one example was cited. How can racism create a “happy community?’

    Immigrant families are often large and houses are overcrowded. One of the most densely populated areas in the entire Bay Area is San Francisco Chinatown. Somehow those immigrants manage to quietly exist, progress and raise productive families with an emphasis on EDUCATION.’

    ‘A glaring example of racism in this story, however, is the statement by Nancy Alvarado who says that her native Mexican town is plagued with gang violence. How can an entire town be gangsters – sounds racist to me.’

    ‘If the writer is looking for racist situations in the U.S. as it relates to immigrants, how about the fact that many people from countries South of the U.S. border feel that it’s OK to not abide by an orderly immigration process and jump ahead of those people patiently waiting to immigrate from Asia, Africa and other continents. To me, that is true racism.’

    1. The town provides…necessary resources. For example, Alvarado’s son is currently in therapy … We are not a burden for California.”

      Seems a tad contradictory.

      1. The rule change of what constitutes a “public charge” are a good step forward in my opinion. DJT and administration has taken flak for this, but I view it as very positive. Build the wall around the safety net.

        1. Ironically it was only a few months ago the media collectively screamed that immigrants never under any circumstances take public benefits.

          Now when the law is going to be enforced we hear about the poor children who will suffer…

          1. My sister teaches ESL at an elementary school. She says that all of her immigrant students are on welfare, every single one.

          2. Of course they are. If they qualify, and maybe even if they don’t, they are signed up for everything possible. I’ve lived near the border for 8 years of my life now. Who do you think is paying for those babies to be born? The lawn guys? The guy running a nail gun? Most people have no idea what a boondoggle illegal immigration is. And then there’s the EIC scams I saw as an accountant.

    2. Although Alvarado and others interviewed have considered leaving Half Moon Bay due to the rising rent prices, they have chosen to stay put. The town provides a safe and quiet community and necessary resources.

      Yes, it’s a safe, quiet community with resources. And that’s based on culture and social norms that are now being violated. How long can it last? People are so quick to label social norm tensions as racism.

      1. Let’s just spend a few moments considering what a working age mom and her child from Half Moon Bay would get should they relocate to this woman’s home town in Mexico. Apply to live there, show an income that could support them coming from outside Mexico, be approved – prior to moving there mind you. Reapply every 3 months and again prove income. Couldn’t get a local job. No welfare. No free medical care. Couldn’t vote nor criticize the government. If she lasted a week without getting killed or worse, she would most certainly leave out of fear of same.

        But the US is soooo racist.

    3. “(Before coming to the U.S.) I never imagined that it was so difficult and that there were such racist people,” Alvarado said. “We do our work, we contribute … We are not a burden for California.”

      Not a burden? How much you wanna be she and her family get food stamps and medicaid?

  11. Mumbai. So 270,000 homes unsold – not really bad :-(. A couple of the billionaires could just buy them up.
    ———–
    2.69 lakh homes remain unsold in the Mumbai Metropolitan Region (MMR)
    1.05 lakh houses remain unsold in Mumbai.
    “Where is the money to invest? We have invested all that we could. And now look at the state of the economy. People are losing their jobs, there is uncertainty everywhere. Not just the real estate sector but across the industries this is the scenario. It isn’t inspiring. This can’t be corrected immediately either. The recovery with corrective measures by government will take some years,” Mandar Sarmankar says.

    1. Check out the photo. Apparently when the SHTF in India, they all start begging the guberment to bail them out.

      1. People are losing their jobs

        The only shame in the loss of bubble jobs is that they were ever created in the first place.

  12. “For instance, it’s equipped with Gaggenau appliances, “which you don’t see [even] in $5- or $6-million homes,” Mr. Kutyan said.”

    When they start talking about “appliances”, you know its the Rope A Dope peddling for the DebtDonkeys.

    “Appliances” 🤣

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