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Many House Owners Are In Trouble As They Cannot Find Tenants To Fill Their Vacant Flats

A report from CBC News in Canada. “The days of cut-throat competition in Toronto for an affordable rental unit — or any unit, for that matter — are gone, at least for now. Pauline Lierman, director of market research for Urbanation, says the change in the rental market is unprecedented, and the trend could continue into 2021 as more newly built units come online— approximately 20,000 by the end of the year.”

“She cites a slowdown in immigration as a factor, both with permanent residents moving to the Toronto area and students coming from abroad, as well as students who have chosen to move home as their classes move online. ‘There might [also] be people … leaving the city,’ she said.”

The Regina Leader Post in Canada. “Regina’s rental market hit a 30-year high vacancy rate according to the City of Regina’s 2019 Annual Housing Update, while the price of buying a home has levelled off recently, but is now trending down according to the report. Coun. Andrew Stevens (Ward 3) sought clarification on how the city planned to address a ‘market failing’ of record high vacancy rates but low vacancy rates in affordable housing.”

“‘Something seems to be disconnected here. Why do we keep bringing new housing units online if we have massive vacancy rates?’ asked Stevens who followed by asking if there was some way to get people into existing vacant units.”

From BBC News in the UK. “The UK’s biggest building society has tripled the minimum deposit it will ask for from first-time buyers. Nationwide has reduced the proportion of a home’s value that is willing to lend from 95% to 85%. So for example, if a property costs £100,000, a new buyer would now need a £15,000 deposit rather than a £5,000 deposit. Nationwide is saying that it is time to ‘protect’ us from risking too much to get a dream home.”

“Emma Harvey, mortgages director at MoneySuperMarket, said: ‘It’s getting harder to borrow money to buy a house, as providers look to limit risk in these uncertain times, and Nationwide is the latest example of this. In addition, there are also fewer mortgage products out there to choose from. For example, whilst 90% [loan-to-value] mortgages were commonplace at the start of 2020, only a handful of lenders are still offering these, and even then only with restrictions.'”

From ENCA on South Africa. “Recent research by trends organisation New World Wealth shows at least 10 of the 12 most expensive locations in South Africa are in the Western Cape, but sellers in these opulent areas are having to accept offers much less than the original asking price. Political and economic uncertainty in the country is said to be behind the drop in prices – especially in areas on the Atlantic Seaboard. The burden of spending close to R50,000 per month on maintenance is one of the reasons people are selling.”

“‘The market has been on a steady decline since the high of 2015-17, and with the effect of COVID-19 we are seeing a 50 to 80 percent decrease on prices across the board,’ said Devon Tame, a property agent.”

The Dhaka Tribune in India. “The house rent situation in Dhaka has scaled down significantly following the pandemic. Like the tenants, many house owners are also in trouble as they cannot find tenants to fill their vacant flats. Without tenants paying rent, they now need to bear all expenses related to their vacant properties. Majeda Khatun, who owns a four-storey building and few tin-shed rooms in Poolpar of West Dhanmodi of Dhaka, has been searching for a tenant for one of her two-room flat what earned her around Tk14,000 a month.”

“‘I thought I could rent it out for lesser price than earlier. But, people are not even responding to the ‘To-let’ sign hanging on the building for the last four months,’ she said.”

The Khmer Times. “Cambodia’s commercial and residential rental market is currently experiencing very high levels of oversupply, particularly for properties traditionally marketed to foreigners, according to industry experts. Khmer Times has already been made aware of properties located in Phnom’s Penh’s popular expat locations of Daun Penh (Riverside) and Tuol Kork (Russian Market) that are now being advertised for 30 percent off their previous monthly price.”

“In addition, many foreigners who now don’t want to sign long-term leases are instead choosing to live in short term hotels, with monthly hotel rates being slashed in excess of 50 percent in some circumstances. ‘We are now offering $100 a month dorms that we previously sold for $8 a night,’ said the manager of a hostel along Phnom Penh’s riverside.”

From Domain News in Australia. “The number of properties sitting vacant across Sydney is at a record high, new research has revealed, as the rate of empty CBD properties tops out at 16.2 per cent. Sydney’s residential vacancy rate is the highest on record since 2005, SQM Research showed. There are now 29,416 properties sitting vacant across Sydney.”

“‘There’s more choice for tenants but it’s a very tough time for landlords right now,’ SQM Research’s managing director Louis Christopher told Domain.”

“Vacancy rates in the CBDs of each capital saw Sydney lead the way with 16.2 per cent of rentals vacant, up from 13.8 per cent in April. In Brisbane, 13.3 per cent of rentals sat empty, while 9.3 per cent were vacant in Melbourne’s CBD.”

“‘These areas like the inner city and holiday areas have definitely been hit the hardest,’ Mr Christopher said. ‘Business trippers and holidaymakers have been using Airbnbs in the inner city because they want to be where the action is. That has dried up with the border closures and caused a significant rise in the CBDs.'”

The Sydney Morning Herald in Australia. “The risk that off-the-plan apartment buyers will pay more than the property is worth at settlement has increased as prices continue to slide. Lenders value a property at completion and, if the valuation is lower than the contract price, the loan may be refused or the buyer asked to provide a larger deposit. Adding to the settlement risk is mounting job losses, which may leave some buyers contracted to buy apartments for which they are unable secure finance once their unit is completed.”

“Off-the-plan apartment buyers who are unable to settle contracts could lose their deposit of tens of thousands of dollars – typically 10 per cent of the purchase price. They could also be sued by the developer to recover any difference between the original contract price and what the developer eventually receives from another buyer.”

“CoreLogic says for the three months to the end of May that of the 3389 off-the-plan unit valuations across Sydney, 52 per cent were lower than the contract price. During the same period in Melbourne, there were 4173 valuations for off-the-plan unit settlements, with 51 per cent lower than the contract price.”

“Otto Dargan, managing director of mortgage broker Home Loan Experts, says he is seeing clients who are not only facing lower valuations for their off-the-plan units but are also struggling financially because their income has fallen dramatically.”

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This Post Has 56 Comments

  1. ‘we are seeing a 50 to 80 percent decrease on prices across the board’

    That’s the spirit!

    1. It seems more and more like 50 percent off is turning into the new normal, or maybe even just the starting point for price reductions.

      This snowball has a long way to roll before it reaches the bottom of the mountain.

  3. ‘he is seeing clients who are not only facing lower valuations for their off-the-plan units but are also struggling financially because their income has fallen dramatically’

    Huh, so was that plan to stampede everybody into the housing bubble not a good idea? I’m not seeing one peep in the Australian media about that.

  4. ‘Something seems to be disconnected here. Why do we keep bringing new housing units online if we have massive vacancy rates?’

    Good question Andy, and you could ask it about many cities around the world right now.

    2. All of that additional property tax capture for cities on luxury housing looks real good to cities, until it doesn’t.

      It makes you wonder who is more to blame for the problem — the greedy politicians, or the greedy builders?

  5. “Tammy Vigil, a spokesperson for Denver’s Department of Public Health & Environment, said in an email Wednesday that the block bounded by 22nd, Stout and Champa streets and Park Avenue West and a stretch of 22nd Street from Champa Street to Broadway had been targeted because of the health and safety risks posed by trash, human waste and used needles.

    “Due to interference from people at the site, crews will wait to complete the initial cleaning until it is safe to continue,” Vigil said, adding that the area would be closed to all but vehicles passing through and for access to homes and businesses until the cleanup was complete.

    A man who gave his name as Divine Qourters said his home was a structure of wooden panels and poles and a plastic sheeting roof he had built between the street and the sidewalk near the corner of 22nd and Champa. Qourters’ shack, behind a Salvation Army transitional housing, was furnished with sofas, decorative items and appliances powered by a generator. Wednesday afternoon he was doing brisk business selling cold sodas from his refrigerator.

    “It’s living. I’m not camping,” he said. “There might be a camping ban. There’s not a living ban.”

    https://denverite.com/2020/06/17/people-experiencing-homelessness-resisted-a-cleanup-in-five-points-wednesday/

  6. Code words for no one wants to live in a BLM run country?

    “Political and economic uncertainty in the country is said to be behind the drop in prices – especially in areas on the Atlantic Seaboard.”

    1. especially in areas on the Atlantic Seaboard

      But … but what about the vibrancy and the walk scores? Surely that has to count for something.

      1. what about the vibrancy

        Apparently there is an optimum level for vibrancy and more isn’t always better as was previously assumed.

          1. Funny how so many police departments where the leadership is black have problems with systemic racism.

          2. Funny how so many police departments where the leadership is black have problems with systemic racism.

            Not to mention cities with black mayors.

            Tom Bradley (a former LAPD officer himself) served as mayor of LA from 1973 to 1993. Anyone remember the Rodney King beating in 1991? Or the relevations about the LAPD that came out of the Christopher Commission?

    2. Code words for no one wants to live in a BLM run country? BLM is an ambiguous term. Lots of RVers spent the winter on Bureau of Land Management lands in the desert southwest for very little outlay. They tend to bug out when the temps there hit 90-100 regularly.

  7. Not clear if this fire in our old hood was arson…under the circumstances it’s easy to speculate.

    Fire ravages former Chevys restaurant in Richmond’s Hilltop
    June 15, 2020
    Fire ravages old former Chevy’s in Richmond’s Hilltop
    Photo credit: Antwon Cloird
    By Mike Kinney

    No injuries were reported in a three-alarm fire that severely damaged a building formerly occupied by a Chevys restaurant in Richmond’s Hilltop neighborhood Sunday, fire officials said.

    A total of 12 engines, two trucks and 30 firefighters from multiple local fire agencies responded to the blaze at 3101 Garrity Way about 8 p.m., according to Richmond Battalion Fire Chief Manly Moulton. The fire was mostly contained by 11 p.m. Fire officials remained on the scene until 3 a.m. today to ensure any hot spots were under control.

    “We treated it as a defensive fire and surrounded the building and took up defensive positions,” Moulton said. “The safety of the building has been compromised and no fire personnel went inside.”
    …

  9. RBA (Aus central bank) internal thinking – it is a very interesting article, give the amount of investor speculation (and some money laundering from China) in the country

    “The “pause” would not mean there was no activity, he wrote, “although it could indeed be wise to recommend that the [Government] temporarily halt all sales of established dwellings”.

    Shutting down real estate sales would send a statement that “we’re in a different category of situation” and that normal reporting of clearance rates and average prices was “misleading”.

    Even without shutting all sales, pausing reporting on the market would “be a fair classification” because real estate agents could not work normally.”

    https://www.abc.net.au/news/2020-06-18/reserve-bank-considered-asking-for-real-estate-transaction-pause/12363222

  10. Helena, MT Housing Prices Crater 16% YOY As Retirement/Vacancy Property Market Takes A Severe Beating

    https://www.zillow.com/east-helena-mt-59635/home-values/

    *Select price from dropdown menu on first chart

    As one noted economist stated, “I can ask $50k for my run down Chevy pickup but where is the buyer at that price? So it is will all depreciating assets like houses and cars.”

  11. ‘New York Gov. Andrew Cuomo on Thursday again defended his administration’s now-scrapped nursing home policy that critics say contributed to thousands of coronavirus deaths, slamming the controversy as “a shiny object” and “pure politics.”

    “The nursing home is an unfortunate situation on two levels. Number 1, people in nursing homes died. The nursing home [controversy] is pure politics, the Republicans in Congress, they think there’s a vulnerability.” He added: “The nursing home thing it’s just all politics.”

    ‘While Cuomo claims the state was following CDC guidelines, Politifact rated that claim “mostly false” last week, arguing that the CDC didn’t force nursing homes’ hands the way that Cuomo did in his March 25 order.’

    https://www.foxnews.com/politics/cuomo-brushes-off-criticism-over-nursing-home-deaths-as-shiny-object

    1. “New York Gov. Andrew Cuomo on Thursday again defended his administration’s now-scrapped nursing home policy that critics say contributed to thousands of coronavirus deaths,”

      I saw this story on the CBS Evening News, wait a second, no I didn’t.

      How could that be?

    2. claims the state was following CDC

      Without even caring if the nursing homes were capable of following CDC guidelines. Cuomo is so cute, he always slams the White House for being political and then follows on with endless political positioning. If it weren’t for him, we’d all be dead.

      A sign on the door of a local store: “Because of the heat, we’re not wearing masks. You don’t have to either, but you can if you want to.”

      1. “You can if you want to.”

        I remember John Kerry being mocked for his “nuance.” Well, nuance MEANS something. And this virus hinges on several nuances that really bring out the stupid in people. We really are a bumper sticker country. Examples of COVID nuance:

        1. Masks: “You can wear a mask if you want to” implies that masks are like seat belts: who cares if you don’t wear one if you’re the only who’s going to get hurt. But masks block virus going OUT, not virus going in. Not wearing a mask is more like driving drunk. Not only could kill yourself; you could kill someone else too. Everyone needs to wear a mask for the same reason that everyone has to drive sober. Not that the freedom lovers care to see that nuance.

        2. Hydroxychloroquine: “It doesn’t work on hospital patients, therefore it doesn’t work at all.” Actually, you need zinc and EARLY treatment for it to work. But it’s just so much easier to think in the black-and-white term “doesn’t work.” Even the FDA and WHO can’t (or refuse to) figure this out.

        3. Infection rate vs. case fatality rate. We’ve seen the divide in death rate along racial lines. Are more POCs dying because they are more likely to be infected, or because they are more likely to die once they are infected? Almost every article I’ve read conflates the data for both. Not to mention the racial lines. One Republican congressperson, a doctor, said he knew that [paraphrase] “co-morbidities were causing a higher death rate, but why did communities of color have a higher infection rate. Were they social distancing less or washing their hands less?” The Congressman got the nuance right, but he was lambasted in an inflammatory story in the Washington Post for his “ist” statements implying that some people were “dirty” for not washing their hands (the comment section eagerly gobbled up the inflammatory meat and pooped talking points out the back).

        4. Testing: People found virus RNA on the Diamond Princess cruise ship weeks after it was evacuated. But that doesn’t mean the virus is active. The test looks for RNA. If you test positive, are you really sick? If you test positive twice, are you still sick or is your body just expelling dead virus pieces? Don’t know yet, but it’s going to take a smart person to figure it out and a smarter one to explain it to the masses.

        5. immunity: I’m learning more about this. There is T-cell, antibodies, and cytokine storm. T-cells are more likely to results in cases with no symptoms. Antibodies are more likely to confer immunity. Cytokine storm is the killer. Good luck sussing out which people employ which method, and how that will impact vaccine development.

        And none of this even touches the political aspects of lying about masks or pushing mediocre drugs or making up hospital data for The Lancet. So round up your brain cells, folks; this is going to be a long ride.

        2. Cytokine storm

          Which is why animal studies are extremely important, particularly for coronaviruses.

          2. Check out

            Already familiar. My mother was a biopharmaceutical regulatory affairs and clinical development professional.

          3. Sometimes animal studies aren’t of much use.

            Translating results from animal to human studies is a well-known problem. But when there are problems in animals, you’re not going into humans. Coronavirus vaccines are known to elicit a cytokine storm in animals. Moderna skipping animal studies was a big no-no.

          4. a big no-no

            Some shortcuts were taken in the interest of speed and the pot of gold.

            It will be ironic if for the first time in history a vaccine for a corona virus is found and it isn’t needed, because the infection has passed, or if it only helps with one of a thousand divergent strains.

            I’ve a couple of friends that swear they are not coming out from under their beds until there is such a miracle vaccine.

  12. Millions of loans payments skipped as coronavirus slows economy: report

    BY J. EDWARD MORENO – 06/18/20 10:54 AM EDT

    Since the start of the coronavirus pandemic in the U.S., Americans have skipped payments on 100 million student loans, auto loans and other forms of debt, according to The Wall Street Journal.

    The number of people who deferred payments or enrolled in forbearance or some other type of relief since March 1 rose to 106 million at the end of May, which is three times higher than it was at the end of April, the Journal reported.

    https://thehill.com/policy/finance/503364-millions-of-loans-payments-skipped-as-coronavirus-slows-economy-report

    1. How all this forbearance will get resolved at the end of the pandemic is a huge economic wildcard.

        1. With any luck it will be like a neg-am loan. Pay less now, but we add it to the back end of the loan term, OR we just make you pay a little more each month for the next 1-2 years. But that would require some form of forbearance all the way up the debt chain. It’s still worth doing to keep people in business or their homes, provided it’s temporary (no more than three years or so). While it’s nice to say, Die speculator scum, a year of shutdown is just not something people plan for.

          1. not something people plan for

            Avoid debt like the plague. Save for a rainy day. Work hard so that you’ll have something to share with your neighbors in time of need. – Grandma Beryl.

          2. BTW, Beryl’s family were able to survive three years of dust bowl on a farm along the Santa Fe Trail in Central Kansas.

          3. My best guesses:
            1) Add accrued interest during COVID-19 to the unpaid loan balance
            2) Refinance the post-COVID-19 loan balance over a longer term if necessary to bring down the monthly payment to match post-COVID-19 income stream

  13. Clifton, VA Housing Prices Crater 14% YOY As Fairfax County Slips Deeper Into Foreclosures And Mortgage Defaults

    https://www.zillow.com/clifton-va/home-values/

    *Select price from dropdown menu on first chart

    As one Fairfax County broker lamented, “How can we possibly sell a resale house when builders are selling new houses for 20% and sometimes 30% less?”

  14. When the Government backs loans of any sort it automatically corrupts the price of that product. School loans and backed real estate loans by the Gov. artificially created false pricing. This is especially true after they got rid of the Glass-Steagle Act
    In 1998 that limited faulty lending.

    Obamacare was another interference in the free markets by the IRS giving penalty for not paying a price fixing monopoly based on the price being charged based on income and forced paying of services a person might not want or need.

    So these are just examples of how private industry has used the Government to prop up the price of these overpriced industries.
    Than you add to that the outsourcing of jobs and manufacturing to places like China , the gutting of the USA was assured..

    So , it was the Politicians that sold out the working class to the Corporate Looters .

    Than while this rigged deck was going on , the Commies were taking over the school agendas with Commie brainwashing, hate America, and false narratives on racism. Again trillons have been invested into the welfare State to again supplement Business for it lack of investment in America and low wages. Even military investment props up Military industries.

    This corrupted Government has strayed far from the intent of the Framers that was limited Government with the Constitution for rights protection, under a free market system.

    So, you have the rich and the welfare Looters killing the productive working class here in the USA.

    And these welfare and Big Business Looters will continue as long as they can spin false narratives.

    Now the Commie brainwashed protestors are attacking law and order demanding more gov cheese, while the Corporate Looters are happy they scream racism instead of the real sell out by DC.

    1. Using government backed loans and regulations to procure public goods is indeed terribly inefficient. Public goods like education and healthcare need to be provided directly by government — just like roads, police and fire protection, and national security.

      1. Housing

        Coeur d’Alene, ID Housing Prices Crater 16% YOY As Sellers Flood Market And Slash Prices Double Digits

        http://www.zillow.com/coeur-dalene-id-83814/home-values/

        *Select price from dropdown menu on first chart

        As a noted economist said so eloquently, “liquidate whatever you’ve got to eliminate all debt and hold onto every dollar you’ve got…. You’re going to need every last one of them.”

      2. They are. For 13+ years. It’s called public education and it’s a boondoggle white female jobs program that has destroyed opportunity for the poorest Americans since the 1920s. Interesting how the degradation of american education coincided with the rise of the federal reserve.

  15. I guess you don’t understand FJM , before the sell out from the Political class health care and education was cheap under a capitalist system. Real estate tracked with wages.

    Health care and overpriced education paid by government would do nothing to bring down the price and another 7 trillons in cost yearly would raise taxes by three times.

    While the police and roads are paid for by taxes, it doesn’t mean that we keep on adding free shit paid by taxes. In fact some people would say that we already have to many overpaid government workers that the public sector can’t support..

    All this welfare simply corrupted generations of people , while all along it was a supplement to Big Business. Your brainwashed as to what would solve the problems, and the Globalist Looters see your kind as useful dolts.

    1. Paying a little more in taxes to fund universal public healthcare and getting to ditch premiums, co-pays, and deductibles we’re currently on the hook for is a great deal. The United States already has decent public single-payer systems for the most expensive to serve populations (old people and poor people). We just need expand it.

      1. It wouldn’t be just a little more taxes. The care would be inferior as all government run service go. What you want is not affordable at our current level of debt.
        Welfare is already a racket in this Country. You just don’t understand that somebody has to pay for all these programs.

        1. The care would be inferior as all government run service go.

          As someone who had his knees replaced I learned that my private insurance pays a LOT MORE for the procedure than Medicare does, like twice as much. Private insurance subsidizes Medicare. Create Medicare For All and those subsidies go bye bye. And while taxes would have to soar to pay for it, we would find ourselves with very rationed care. I have relatives in the UK who purchase private insurance to get around the NHS.

          1. in the UK who purchase private insurance to get around the NHS

            I have family in Canada who also do.

          2. I don’t see a “free” medical system where those with money pay cash for higher level care as a bad thing. First it at least gets minimal care to the people that need it most and anybody else who doesn’t feel like paying extra. This is a huge deal for the unemployed and young people trying to get a business off the ground. Second if it moves the higher tiers to cash and pries it out of the clutches of the insurance industry. Even if private insurance products are created that people want at the higher tiers they are now optional and the prices should be much more inline with true costs.

          3. true costs

            I expect hospitals will be in make up mode after months of lost revenue due to Covid Only activity.

    1. Between 1945 and 1990 you didn’t see poor people dying in the streets from no medical care. The Gov had systems set up to take care of people that couldn’t afford medical care

      The employers for most part paid for health care because the cost was cheap because working. People màde less claims.

      When heal care started to become a price fixing monopoly is when that industry got to the Politicians to bring on Obama care to insure overpaying by the Commie plan. USA is already 50% higher in costs than other industrial Nations.

      So it’s just the Government getting involved in a gouging industry to prop up prices.

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