thehousingbubble@gmail.com
Blog

We Do Not Want To End Up With A White Elephant

A report from Toronto Life in Canada. “When the pandemic hit, Christine Morra was forced to shut down her Blue Mountain Airbnb rental. We spoke to her about adjusting to the new normal. ‘In 2017, we bought a two-bedroom condo near our place in Blue Mountain. We paid in the mid-$400,000s and planned to rent it out on Airbnb to help cover our mortgage and renovation costs. Before Covid, we were earning around $10,000 or $11,000 per month from Airbnb during the busy seasons—December through February and July through August. The rest of the year, we earned around $5,000 to $6,000 per month.'”

“‘In mid-March, when the province announced schools were closing, we started seeing cancellation after cancellation after cancellation—at least 20 cancelled stays. On the Airbnb site, you can track your future income: for the month of March, we watched our projected earnings go from $7,000 to $1,000 in a matter of hours. It was devastating. Right now we’re dipping into our savings from our Airbnb income to pay our mortgage. We are stressed and worried, but hopeful.'”

From Global News in Canada. “Across Canada, rents are falling amid the novel coronavirus pandemic. The declines are widespread across cities and regions, with average April rents now significantly below year-ago levels in some of the country’s priciest markets. In Toronto and Vancouver, for example, average rents were down by five per cent and nine per cent respectively last month compared to the same period in 2019.”

“On the other hand, the supply of available rental units is rising. With short-term rentals sitting empty, many landlords are now looking to fill their units with longer-term rentals, Paul Danison of Rentals.ca says, adding that his company has seen an ‘uptick’ in such listings. The rent declines have been particularly steep in the oil-rich provinces, where local economies have been struggling with low energy prices in addition to the pandemic. Average rents in Calgary, Edmonton and Regina have seen double-digit annual declines, while in Saskatoon they’re down by a staggering 28 per cent.”

The Times of London in the UK. “In February, after agreeing to the asking price of £445,000, Anne O’Callaghan exchanged contracts on the purchase of a four-bedroom new-build house in West Sussex that she is buying with her sister. Anne, a 60-year-old retired teacher, did not need to pay a deposit when she exchanged because she had decided to part-exchange the cottage she owned and pay the remaining £200,000 of the new property’s price on top.”

“The developer set the completion date for June 30, but, because of interruptions to construction caused by the coronavirus crisis, it has been postponed to October 30. Anne is concerned that she is no longer getting a good deal for the property given the drop in house prices that is beginning to register because of the pandemic, and wonders whether there are any legal avenues she can explore. She has seen that the developer is offering a three-bedroom detached home in the same development for £369,000 — £30,000 less than what was being asked before the outbreak.”

“‘We don’t want to end up buying a pig in a poke,’ Anne said. ‘We have noticed price reductions on certain plots on the same site, albeit on a different style of house, and we suspect that this might become a trend on the development as a whole. Given that we have already exchanged, do we have the legal option to try to negotiate a price reduction, or will we face a big penalty for doing so? We do not want to end up with a white elephant that has a much lower resale price in the next few years. I’m sure there are many others who have been affected in the same way.'”

The Bangkok Post in Thailand. “Bangkok’s condominium market at the start of 2020 was entering a period of severe change, driven by a fall in buyer demand and by the large amount of unsold inventory that had become a risk for developers. Covid-19 has exacerbated these trends. In efforts to reduce their unsold inventory and to alleviate the potentially ruinous effects of a global recession, some developers have been offering extreme discounts on completed units to try and motivate buyers.”

“The discounts and promotions on offer include covering the first 12-36 months of mortgage payments, common fee exemptions and purchase price discounts of up to 50% in some extreme cases.”

The Australian Associated Press. “Some Sydney hotels are listing their rooms on rental websites, adding to a surge in the number of city landlords desperate to find a tenant. The Sydney CBD rental vacancy rate – the percentage of homes available for lease that are empty – rose from 5.7 per cent in March to 13.8 per cent in April, SQM Research indicates. The figures coincide with COVID-19 travel restrictions sapping demand for accommodation by foreign students, and a dearth of interstate and international visitors which prompted many Airbnb property owners to seek long-term occupants.”

“Frasers Property Australia has announced it is making its CBD hotel rooms available under lease terms of between three and 12 months in what it calls a ‘fresh new option to the residential rental market.’ Fraser Suites Sydney rooms start at $600 per week, with residents willing to sign a lease of at least three months given one week rent-free. Outside of NSW, Arise Hotels and Resorts also said it has adapted its approach with the 15 properties it runs across Melbourne, Brisbane and the Gold Coast.”

The Property Observer in Australia. “A Melbourne residential unit has come onto the market priced at $5,000 less than it was sold for more than a decade. Located at 3206/31 A’Beckett Street, the apartment features two bedrooms, one bathroom, a combined kitchen and living area, and a car space. It last sold in 2008, for $443,500. It has been listed in 2020 for $438,000.”

“The sale reflects a growing concern about the stability of Melbourne’s housing market in the current economic climate, with HSBC estimating prices could drop by as much as 17% if the current downturn is prolonged. Another unit, on the same street, has also been recently listed with a price guide reflecting a likely loss on the investment.”

Related Posts
This Post Has 83 Comments

  1. ‘The discounts and promotions on offer include covering the first 12-36 months of mortgage payments, common fee exemptions and purchase price discounts of up to 50% in some extreme cases’

    Half again!

    1. “…covering the first 12-36 months of mortgage payments…”

      This stuff is just asinine.

  2. ‘It last sold in 2008, for $443,500. It has been listed in 2020 for $438,000’

    Twelve bubble years – gone.

    1. I dunno, it would have been pretty good to buy the dip in the middle and ride up the second half…

  3. ‘We don’t want to end up buying a pig in a poke. We have noticed price reductions on certain plots on the same site, albeit on a different style of house, and we suspect that this might become a trend on the development as a whole. Given that we have already exchanged, do we have the legal option to try to negotiate a price reduction, or will we face a big penalty for doing so? We do not want to end up with a white elephant that has a much lower resale price in the next few years’

    Ma’am, this is a Wendy’s.

    1. Sounds like she’s totally fine with overpaying. It’s just not fair if the music just stopped and the seats are all taken.

      1. Q: What does Fook mean in Hong Kong?

        A: Fu character (pronounced “fook”, in Cantonese), the Chinese character Fú 福 meaning “good fortune” or “happiness”

        en.wikipedia.org › wiki › Fook

  6. So are Airbnbs in long term democrat controlled cities, reaping the predictable results of identity politics and blaming racism for all their bad decisions, using this tool to determine to determine how really fooked they are?

    “On the Airbnb site, you can track your future income: for the month of March, we watched our projected earnings go from $7,000 to $1,000 in a matter of hours.”

    1. On the Airbnb site, you can track your future income: for the month of March, we watched our projected earnings go from $7,000 to $1,000 in a matter of hours. It was devastating. Right now we’re dipping into our savings from our Airbnb income to pay our mortgage. We are stressed and worried, but hopeful.’”

      Hope springs eternal. Don’t give it away.

    2. “On the Airbnb site, you can track your future income: for the month of March, we watched our projected earnings go from $7,000 to $1,000 in a matter of hours.”

      That’s knee-slapping funny, to me.

      1. They’d probably get torched. I’m sure somebody would try to find a cash register, too.

    2. How about a real choice Jail and a criminal record, OR no forgiveness, forbearance or payment plans of your student loans???

      1. How about flogging all captured looters, then going after their controllers and paymasters?

    1. Poor chump. He’s probably wondering why those out of state rioters aren’t targeting “red” cities … oh … I know why … because they know if they did, they would get roughed up and spend the weekend in jail. Fortunately for them the Twin Cities cops will run away and let them riot at will.

        1. They are getting worried tonight in Denver City Hall. They are also probably wondering why protestors were bused here when our leadership is soooo progressive.

          2. If people are busing looters in, they should face domestic terrorism charges.

            I’m sure that Soros has covered his tracks well.

          3. “They are also probably wondering why protestors were bused here when our leadership is soooo progressive.”

            If voters elect progressives then these voters are most likely touchy-feely wimps. If I were to bus in protesters to a place I would want to insure that there wouldn’t be much resistance to what I want them to, er, accomplish.

          4. Curiously, local law enforcement was ready last night and they dispersed the crowds with plenty of teargas. At one point the rioters produced chain link fencing and set it up. It didn’t stop the cops who ran roughshod over it, while the weenie real journalist from 9 News kept repeating that he couldn’t believe they just did that, as if that was an act of brutality.

    2. It should be interesting to see how many of these violent protest tourists come down with COVID-19.

      1. “It should be interesting to see how many of these violent protest tourists come down with COVID-19.”

        0.09%

      2. Politics & Policy
        Riots Breed Chaos, Violence and Most Likely Covid-19
        The pandemic seems to be forgotten amid the rage, but the demonstrations will only make it worse.
        By Joe Nocera
        May 30, 2020, 12:44 PM PDT
        So much for social distancing.
        Photographer: Seth Herald/AFP/Getty Images

        Like so many Americans, I didn’t get much sleep Friday night. All night long, I kept refreshing my Twitter feed, watching and re-watching the videos of the rioting that took place in cities nationwide in reaction to the killing of George Floyd in Minneapolis earlier in the week.

        I saw a New York police officer throwing a young protester to the ground, calling her a vile name as he did; a police car going up in flames in Dallas; an assault on the CNN building in Atlanta; a police officer in Louisville, Kentucky, shooting a pepper-spray ball at a camera operator. And on and on.
        …

    3. Civil Rights
      Criminal
      Minnesota Officials Link Arrested Looters to White Supremacist Groups
      Protesters rally outside at the Fifth Precinct in Minneapolis on Friday. (Renee Jones Schneider/Star Tribune via AP)

      (CN) – As Minneapolis underwent a fourth night of protests over the death of George Floyd, Minnesota Governor Tim Walz said Saturday that most rioters arrested are from outside of the city and sought to take advantage of the chaos.

      In a press conference held in the early hours of Saturday morning, Gov. Walz said he is authorizing “full mobilization” of the state’s National Guard, adding 1,000 National Guard to join the 700 already there, calling it “an action that has never been taken in the 164 year history of the Minnesota National Guard.”

      “Our goal is to decimate that force as quickly as possible,” Walz said of rioters who looted and burned buildings. “Our cities of Minneapolis and St. Paul are under assault.”
      …

      1. Minnesota Officials Link Arrested Looters to White Supremacist Groups

        I’ve heard Antifa called many things, but that’s a first.

        1. On a related note I heard someone say that if you are white and try to hijack a peaceful BLM event to sow chaos you are a white supremacist regardless of your motives. I thought it was an interesting take.

          1. It’s that good old double-standard. How about when Antonio Clown (Brown) went on a racist rant against the Oakland Raiders GM, calling him a cracker and trying to fight him, and the NFL did nothing to address the hate speech. If a white player had dropped the “N” bomb against a black coach or GM, he’d be banned for life.

          2. It was very schadenfreude-y to watch the bused in antifa crowd in Denver get tear gassed over and over last night. They scattered like cockroaches.

  9. Before Covid, we were earning around $10,000 or $11,000 per month from Airbnb during the busy seasons—December through February and July through August.

    That’s $300+/night for a two-bedroom condo, on average. I looked up the Toronto Westin Blue Mountain (I put in September dates) $165/room/night. So these AirBnBs aren’t much cheaper.

    I had no idea there was so much vacay going on. Enough people going on enough vacations to fill thousands of AirBnBs, at $300/night? Are these the same people who can’t find $400 for an emergency?

    1. So these AirBnBs aren’t much cheaper.

      I thought the whole idea of doing AirBnb was to save money.

    3. No, there is not that much “traveling” going on it is partners and criminals who use these short-term rentals to throw wild parties and commit crimes.

      There are no background checks on these people and there is no security like in a hotel.

  10. It’s going to be interesting to see if and how the 8 PM curfew will be enforced in Denver. Will the paddy wagons appear?

    I’m watching live footage at the 9News website. Tear gas is being used on the out of town paid protesters.

        1. They really are spinning that narrative (that they aren’t antifa) with everything thy got.

      1. They tried that on I-25 in Denver on Thursday and they got their azzez teargassed. They haven’t tried it again.

        1. Coming to the intersection of Poway Rd and Community Rd this afternoon according to a screen shot from a private Instagram account posted on Nextdoor. The screen shot references a public Instagram that posted a similar “Call for Action” for La Mesa.

    2. Federal officer killed guarding courthouse near California protest
      by DAISY NGUYEN Associated Press
      Saturday, May 30th 2020
      FILE – MAY 29: A demonstrator tried to extinguish a trash fire during a protest sparked by the death of George Floyd while in police custody on May 29, 2020 in Oakland, California. (Photo by Justin Sullivan/Getty Images)

      OAKLAND, Calif. (AP) — A federal law enforcement officer in California was killed and another critically injured after being shot while providing security at the U.S. courthouse in Oakland amid one of the increasingly violent protests unfolding around the country.
      …

  14. Right now we’re dipping into our savings from our Airbnb income to pay our mortgage. We are stressed and worried, but hopeful.’”

    Die, speculator scum.

  17. Time for rooftop Koreans to step up and defend their stores in Los Angeles like they did during the LA riots. Time for anti-gun libtards to watch their neighborhoods and property be pillaged and burned. After pushing “redistribution of the wealth” so assiduously, it’s poetic justice to see the looting spread to wealthy liberal enclaves like Beverly Hills and Santa Monica.

    https://www.youtube.com/watch?v=JU97DPhMhos

  20. Does Baron Rothschild’s old adage need an update?

    Buy when there’s blood and plague in the streets.

    1. Who is Lis Pendens, and what does she have to do with buying foreclosure homes?

      1. lis pendens – latin for “a suit pending”

        A notice filed in the office of public records that the ownership of real property is the subject of a legal controversy and that anyone who purchases it takes it subject to any claims asserted in the action and thereby its value might be diminished.

  22. Are you planning to Zump your Zilldo shares while the price is still ripe?

    Zillow: The Stock Is A Zell
    May 27, 2020 4:08 PM ETZillow Group, Inc. (Z)15 Comments
    Summary
    – Zillow has built a tremendous following for its residential real estate website.
    – But the business has only just moved into the black and has limited further upside potential. I value this business at $20 per share.
    – Zillow Offers, a buy-and-flip home business, has lost a lot of money to date. I fail to see a profitable niche. I value it at $0.
    – Zillow Home Loans is in the perennially unprofitable mortgage banking business. Another $0.
    – With the stock at $61, Zillow is significantly overvalued.
    …

  23. Now that a Citigroup analyst has pointed out the absurdity of the V-shaped recovery meme, is it henceforth officially absurd?

    Coronavirus business update 30 days complimentary
    Investment Banking
    Citi warns markets are out of step with grim reality
    Tougher times ahead as a result of pandemic, says co-head of investment banking
    Citigroup has been telling its corporate clients to raise as much money as they could before the true cost of coronavirus is factored in by investors
    © Bloomberg
    Laura Noonan in New York
    2 hours ago

    Citigroup said financial markets were “way ahead of reality” with tougher times to come, warning corporate clients that they should raise as much money as they could before the pandemic’s true cost is factored in by investors.

    “We definitely feel that the markets are way ahead of reality. We really are telling every client to tap the market if they can because we think the pricing now couldn’t get any better,” Manolo Falco, investment banking co-head at Citigroup, told the Financial Times.

    “As the second quarter comes along and we start seeing the pain, and the collateral effects of that, we think this is going to be much tougher than it looks.”

    His comments came at the end of a week when stock markets largely rallied even as millions of businesses around the world remained shut and economies lurched towards their worst recessions in memory.

    “Markets are pricing a V [shaped recovery], everyone’s coming back to work, and this is going to be fine,” Mr Falco said. “I don’t think it’s going to be that easy quite frankly.”
    …

  25. I am posting this now but I think it is in my best interest to hold off on making any comments about it for the time being.

    WARNING GRAPHIC: Dallas Protesters Beat Man to Near-Death Outside Store

    BOB PRICE30 May 2020

    A video of the George Floyd protest in Dallas appears to show a man being beaten nearly to death by the crowd. The victim reportedly tried to defend his shop with a large sword, a report states.

    ELIJAH
    ✔
    @ElijahSchaffer
    BREAKING: man critically injured at Dallas riots

    It appears he attempted to defend a shop with a large sword

    Looters ran at him, then he charged rioters

    They then beat him with a skateboard and stoned him with medium sized rocks

    I called an Ambulance and it’s on the way

    https://www.breitbart.com/border/2020/05/30/warning-graphic-dallas-protesters-beat-man-to-near-death-oustide-store/

Comments are closed.