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Perhaps The Love Affair Has Finally Met The Bullet It Can’t Dodge

A report from CTV News in Canada. “Ari Newman has called Vancouver’s Strathcona neighbourhood home for the last three years, but that’s about to change. ‘It’s been an increasingly bad experience living in Strathcona,’ he told CTV News. ‘I’m seeing an escalation of violent crime, I’m seeing an escalation of violent assault.’ He himself has been assaulted twice while living in the neighbourhood.”

“Newman is far from the only Strathcona resident frustrated by a rise in crime in the neighbourhood and calling for an end to the homeless camp. While residents like Newman look to sell their homes, real estate agents are seeing interest slow in areas such as Strathcona, Yaletown and Gastown. In neighbourhoods like Yaletown, which have typically been highly sought after, real estate agent Gary Serra found buyers ‘steering away.’ ‘People like the character, they like that it’s right in the city core and the grit,’ said Serra. ‘It’s gone beyond that now and people feel unsafe.'”

“For Newman, he’s ready to move even if he has to take a loss in the sale. ‘I don’t think I’ll get what I want just given what’s happening in the community,’ he said. ‘I’ll get way below my assessed value.'”

The Daily Star. “With many Brits still working from home and no return to the office in sight, property lettings website Airbnb has slashed prices on long-term stays. Discounts are being offered on stays across the top ten European destinations searched for by Brits last month including the Algarve, Sicily and Tenerife. Your boss will never know you are chatting on Zoom thousands of miles away with this smart pad in central Lisbon, Portugal available at 76% off. It sleeps three guests and costs just £660 for a month.”

The Spectator. “Rent is dropping in Slovakia. Has the Airbnb bubble burst? A new trend has been reported by the real estate market – rent prices have been significantly decreasing since March. The drop in rent prices has been in two-digit numbers in some localities in Bratislava, according to the Nehnutelnosti.sk real estate website. This is mainly due to the fact that hundreds of apartments that used to be rented through the Airbnb platform have now been offered on the market.”

The Hurriyet Daily News. “Turkey’s student cities have been financially hit by the coronavirus pandemic due to online education after the country launched distance education. ‘As the students went back to their hometowns, limiting their need to come back to the college towns, the rents nosedived by 40 percent, cafes and restaurants were closed and furniture shops are in dire straits,’ officials have said.”

“According to the director of Chamber of Estate Agents in Eskişehir, the landlords and the cafe owners were the first to suffer losses. ‘Normally in September, just before the university opens, we get busy. This year, it did not happen like that,’said Gazi Çelik. ‘A rent of 1,300 Turkish Liras [$163] decreased to 1,000 liras [$126]. We now ask 700 liras [$88] for the same [flat]. The landlords are in a panic as there is no student tenants left,’ added Çelik.”

From Haaretz on Israel. “Over the past few months, for-rent signs have become ubiquitous in storefront windows on Israel’s deserted commercial streets. The feeling until now was that things are as bad as they’re going to get, but a review by TheMarker shows that the current lockdown, with its unclear goals and exit strategy, has pushed commercial-asset values and rents even further down, changing the nature of commercial rental contracts. These changes are likely to depress commercial real estate prices over the next few years.”

“The value of the commercial and office real estate market has dropped sharply since the beginning of 2020 in general, and since the coronavirus pandemic began in particular. Since March, the market’s valuation has lost 25 percent on average from the beginning of the year. ‘During the first wave of the coronavirus outbreak, commercial real estate valuations dropped 20 percent on average, and then stayed at that rate in the following months, and then the September lockdown brought another 5 percent drop,’ says Shmulik Cohen, owner of SK Real Estate Appraisers.”

“The most notable price drops were for real estate housing and the businesses most vulnerable to the effects of the crisis, such as restaurants, coffee shops, clothing stores and others that pull in customers, says Cohen. The value of these assets dropped by 25 percent during the first wave and then by another 10 percent.”

From Gulf News on Dubai. “With rents continuing to drop, landlords in Dubai and Sharjah are bringing forward apartment renewal negotiations to try and retain their tenants – even before they start looking around at options elsewhere. ‘Landlords, especially in Sharjah, are going out of their way to commit existing tenants to new rental terms even if there are two to three months still left on the current lease,’ said a real estate agent. ‘These days, having their apartment go for months without a tenant is the biggest fear gripping landlords.'”

The Bangkok Post in Thailand. “Bangkok Bank has warned of a possible oversupply in the low-rise housing market in Greater Bangkok as many developers flee the sluggish condo sector for the segment. Phairach Sakwit, senior vice-president for property development at Bangkok Bank, said there were about 300,000 unsold residential units in Greater Bangkok as of the first half of 2020.”

“‘The cost of land in the inner city accounts for more than half of total development cost,’ Mr Phairach said. ‘If there is an issue leaving a project unfinished, it may be a problem.'”

The Malaysia Star. “Reality seems to be sinking in among Damansara Heights owners with regards to their asking prices after the Covid-19 pandemic struck. Space Realty principal Eugene Liew says there seems to be a ‘a paradigm shift among owners.’ ‘They seem to be more realistic today. They are willing to negotiate and for some, relax their asking prices,’ he says. Liew says Damansara Heights prices have been on the downtrend for three years between 2015/16 and 2020.”

From ABC News in Australia. “At barbecues across our great Southern land, there is one topic of conversation that defines Australian life: housing prices. Frankly it’s not surprising. In decades passed, simply buying a property in the right area and holding onto it for long enough could quite literally net an owner more in capital gains per year than they earned from working.”

“‘From what my colleagues and I are seeing at a grassroots level, there are some areas where prices have already fallen 10 to 15%. And there are often quite large gaps between a vendor’s asking price and what they actually get on the day,’ said Sydney property industry insider, Edwin Almeida. ‘The market has quite a weak underlying foundation and while some areas are stronger than others, most of the pain for the market is still to come when JobKeeper and the insolvency moratorium finish up next year. Some desirable areas have something of a floor under prices, but overall the many downside factors are too severe for the market to overcome and I expect prices to fall over the next couple of years.'”

“For decades, the Australian love affair with real estate and rising property prices has endured, finding a way to dodge the impact of crisis after crisis. But in the midst of the pandemic and the worst recession in almost a century, perhaps it has finally met the bullet it can’t dodge.”

From Domain News in Australia. “The proportion of loss-making property sales is expected to rise in the coming months. Some 12.8 per cent of properties sold at a loss in the three months to June, edging up from 12.3 per cent in the March quarter, the latest CoreLogic Pain and Gain report found. This is the highest level since August 2019, when the housing market was recovering from a downturn that had been sparked by a clampdown on lending to investors and risky borrowers. It is also higher than the five-year average for loss-making sales, at 9.8 per cent.”

“Since June, some lenders had said distressed borrowers, particularly investors, should sell their properties before mortgage holidays ended, the report said. ‘This could see an increase in loss-making sales over the following two quarters, particularly in more high-risk, investor-concentrated markets.'”

“Sellers were most likely to record a loss in the resources-hit capital city markets, with 52.1 per cent of sales in Darwin in the June quarter transacting at a loss, and 36.2 per cent in Perth. In Brisbane, 14.3 per cent of sales were at a loss, and 12.8 per cent in the ACT due to a weaker unit market in the national capital. Sellers were least likely to make a loss in Hobart (3.2 per cent), Melbourne (6.9 per cent), Sydney (8.8 per cent) and Adelaide (9.2 per cent).”

“Mining regions also recorded high proportions of losses, at 40.3 per cent in Mackay and 47.2 per cent in northern outback WA. Apartment sellers were more likely to transact at a loss than house sellers in the quarter, with 20.7 per cent of unit sales at a loss compared to 10.4 per cent for houses.”

“Investors were also more likely to sell at a loss (18 per cent) than home owners (11.1 per cent). In the largest cities, the proportion of loss-making sales varied by region. Sydney sellers were most likely to make a loss in the Botany Bay council area (18.8 per cent), Parramatta (16.5 per cent) and Ryde (16 per cent). In Melbourne, the inner-city Melbourne city council region recorded 37.5 per cent of sales at a loss.”

This Post Has 34 Comments
  1. ‘Newman has called Vancouver’s Strathcona neighbourhood home for the last three years’

    Well, it was cheaper than renting.

  2. ‘People like the character, they like that it’s right in the city core and the grit,’ said Serra. ‘It’s gone beyond that now and people feel unsafe.’

    So good “grit” is if others are desperate and unsafe but you’re feeling safe and can just enjoy the show?

      1. As long as housing prices continue cratering, all is well.

        God Bless President Donald J. Trump and God Bless America!

    1. He just played the Village People’s “Macho Man,” followed by Queen’s “Bohemian Rhapsody.” The libtard triggering is going to be epic.

  3. ‘It’s been an increasingly bad experience living in Strathcona,’ he told CTV News. ‘I’m seeing an escalation of violent crime, I’m seeing an escalation of violent assault.’

    Sounds like the vibrant cultural enrichment is fanning out to the ‘burbs. How’s that globalism and multiculturalism working out for ya, Canadians?

  4. “Rent is dropping in Slovakia. Has the Airbnb bubble burst?

    Rents are dropping but mortgages are staying the same. Insolvency, meet speculators.

  5. Phairach Sakwit, senior vice-president for property development at Bangkok Bank, said there were about 300,000 unsold residential units in Greater Bangkok as of the first half of 2020.”

    Is that a lot?

  6. ‘The market has quite a weak underlying foundation and while some areas are stronger than others, most of the pain for the market is still to come when JobKeeper and the insolvency moratorium finish up next year.

    The speculative binge enabled by the central banks and their radical Keynesian monetary malpractice always had foundations of sand. When the financial reckoning day can no longer be averted, the full magnitude of the fraud of the debt-fueled “economic recovery” since 2009 is going to be on display for all to see.

  7. ‘A rent of 1,300 Turkish Liras [$163] decreased to 1,000 liras [$126]. We now ask 700 liras [$88] for the same [flat].

    I bet that hovel is a real chick magnet.

  8. “Investors were also more likely to sell at a loss (18 per cent) than home owners (11.1 per cent).

    Die, speculator scum.

  9. “The value of the commercial and office real estate market has dropped sharply since the beginning of 2020 in general, and since the coronavirus pandemic began in particular. Since March, the market’s valuation has lost 25 percent on average from the beginning of the year. ‘

    The TBTF banks are expected to report blow-out earnings this week, if you believe the financial media touts and shills. Obviously borrowing money at near-zero interest from the Fed, then charging the proles usurous interest rates is a lucrative racket – but with the rapid decay in the collateral of all those CRE loans, how much longer can the “extend and pretend” charade continue?

    1. JPM beat earnings, mainly due to a release of reserves set aside for loan delinquencies. The bank (one of the Fed’s primary dealers) paid a $920 million dollar fine for its illegal spoofing of the gold market (part of the Fed’s years-long market rigging in precious metals) but of course there were no criminal charges against the senior bank officials overseeing this lucrative racket.

      https://www.cnbc.com/2020/10/13/jpm-.html

  10. The joys of living in the city. Wasn’t this part of the “vibe” you paid top dollar for?

    Especially in a city where you can’t arm and defend yourself.

    “I’m seeing an escalation of violent crime, I’m seeing an escalation of violent assault.’ He himself has been assaulted twice while living in the neighbourhood.”

  11. Social Security’s cost of living adjustment for 2021: 1.3%.

    Pensioners and SS recipients are being bilked out of trillions in interest income and SS payments thanks to the Fed’s war on savers coupled with our Soviet-style fake CPI data.

    1. a comment

      MarvLS1 • a day ago
      I have a hard time giving a rat sass about the fate of a city that votes 90% Democrat. You crapped in your own soup; now eat it.

      2

      Reply

      Share ›

  12. Drat. The J&J vaccine was just paused. Unexplained illness. I guess we’ll learn more later. The Astra-Zeneca one is still paused.

  13. Can central bankers using the printing press to fund bailouts of PWLM (People Whose Lives Matter) magically increase living standards?

    1. Wouldn’t higher corporate taxes potentially result in less production of the stuff which increases living standards when it gets produced?

      The Financial Times
      Coronavirus economic impact
      Pandemic will cause ‘lasting damage’ to living standards, IMF warns
      Tourism and commodity-dependent economies to be hard-hit in ‘long, uneven’ recovery, fund says
      A waiter packs up at a restaurant in Paris, France, as Covid-19 curbs force bars and cafés to close. The pandemic will do lasting damage to people’s living standards around the world, the IMF has warned
      © Kiran Ridley/Getty
      Chris Giles in London
      2 hours ago

      The coronavirus crisis will wreak “lasting damage” on people’s living standards across the world and taxes on the rich and on companies may have to rise to address this economic harm, the IMF has warned.

      The pandemic will leave significant scars on the global economy in the form of job losses and bankruptcies and whole sectors of the economy will be left unviable, according to the fund’s first medium-term forecasts since the onset of the virus.

      This damage will persist because the adjustment from struggling sectors such as travel to expanding ones such as digital technology will inevitably be slow and painful for many people, the IMF said in its twice-yearly World Economic Outlook, published on Tuesday.

      Launching the report, Gita Gopinath, the fund’s chief economist, said the period of recovery from the crisis would be “long, uneven and uncertain”.

      The need to adjust to less travel and commuting and more bankruptcies will lead to “significant losses of output” even after the pandemic has eased and countries heavily reliant on tourism and commodities are likely to be left in “a particularly difficult spot”, the IMF said.

  14. From ABC News in Australia. “At barbecues across our great Southern land, there is one topic of conversation that defines Australian life: housing prices. Frankly it’s not surprising. In decades passed, simply buying a property in the right area and holding onto it for long enough could quite literally net an owner more in capital gains per year than they earned from working.

    “For decades, the Australian love affair with real estate and rising property prices has endured, finding a way to dodge the impact of crisis after crisis. But in the midst of the pandemic and the worst recession in almost a century, perhaps it has finally met the bullet it can’t dodge.”

    From Domain News in Australia. “The proportion of loss-making property sales is expected to rise in the coming months.”

    “Since June, some lenders had said distressed borrowers, particularly investors, should sell their properties before mortgage holidays ended, the report said. ‘This could see an increase in loss-making sales over the following two quarters, particularly in more high-risk, investor-concentrated markets.‘”

    – Hi Ben, thanks for the update on AU RRE.
    – What’s missing from the article is any acknowledgement that the AU housing market was financialized and converted from shelter to a speculative grade “investment.” This was due to AU government and central bank targeting. Pure and simple. AU is a snapshot or microcosm of the global economy, where financialized housing has replaced productive capacity, because the banks can generate huge profits from financialized RRE activity, and they have captured government via crony capitalism.

    A couple of references here:

    https://www.thestar.com/opinion/star-columnists/2019/04/22/the-film-push-shows-how-housing-has-become-a-commodity-for-the-benefit-of-the-wealthy.html
    Star Columnists | Opinion
    The film Push shows how housing has become a commodity for the benefit of the wealthy
    By Christopher Hume | Star Columnist
    Mon., April 22, 2019

    “Finance is an extractive sector,” notes Dutch-American sociologist Saskia Sassen in one of several on-camera interviews. “It might as well be mining.” Finance, she points out, exists to squeeze every last drop of value out of any given asset.”

    “This is not at all about housing,” Sassen explains. “Buildings function as assets.” Gentrification, she points out, is the least of it. “It’s much deeper than that,” she argues. It’s more a wholesale appropriation of cities and the accompanying displacement of the poor and the middle classes to make way for the wealthy.”

    “Sassen’s dire insights are echoed by economist, author and Nobel laureate Joseph Stiglitz, who also speaks on camera. As he said recently, since the 1980s, “…the income share of the top 0.1 per cent has more than quadrupled and that of the top 1 per cent has almost doubled, that of the bottom 90 per cent has declined. Wages at the bottom, adjusted for inflation, are about the same as they were some 60 years ago. Wealth is even less equally distributed, with just three Americans having as much as the bottom 50 per cent.”

    “As incredible as these figures are, what’s less obvious is governments’ role not only in allowing this massive shift of wealth, but enabling it. The 2008 financial crisis, for instance, was a disaster for millions of homeowners, yet it turned out a gold mine for large fund management firms. There’s no better example than Blackstone, a private equity company that controls assets worth $512 billion — more than half a trillion dollars. It acquired thousands of properties lost in the fallout of the subprime mortgage scandal.”

    https://www.theglobeandmail.com/report-on-business/rob-commentary/canadas-a-real-estate-country-just-waiting-for-a-crash/article31457558/
    Opinion
    Canada’s a real estate nation, just waiting for a crash
    Konrad Yakabuski
    Published August 18, 2016 Updated May 16, 2018

    “The real estate sector keeps setting new records. Indeed, it’s now Canada’s biggest industry, leaving Alberta’s oil patch and Ontario’s manufacturing heartland in the dust. Ongoing weakness in those latter sectors is generating talk of yet another rate cut, no doubt to the delight of the friendly neighbourhood broker who keeps urging you to sell.”

    “Hewers of wood and drawers of water, not. Canada is now a real estate nation, with little else to keep the economy from sinking into an even deeper funk. Gross domestic product shrank 0.1 per cent in May, and that’s after excluding the negative impact of Alberta’s wildfires on oil sands output. Yet, we’re still buying houses like there’s no tomorrow.

    “And there may not be a tomorrow for the suckers who buy in at the peak, whenever it comes.”

    “The so-called economic rotation from oil to manufacturing exports that rate cuts (and the related decline in the Canadian dollar) were supposed to produce has not only failed to materialize but policy makers have pumped helium into an already overheated real estate sector that is masking structural weaknesses in the economy and setting us up for a bigger fall.

    It’s “difficult to believe that any progress has been made in terms of economic rotation. Indeed, the opposite appears to be the case, given real estate’s increasingly large share of economic output,” TD Bank economist Brian DePratto noted in a Thursday report. “Rising home prices do have positive knock-on effects for consumer spending, but over-reliance on the real estate market is hardly the sign of a healthy economy.”

    The real estate sector’s share of GDP has grown 0.4 percentage points in the past two years alone, TD noted, while the share of everything else (including oil and manufacturing) has shrunk. Going back 10 years, to May, 2006, manufacturing output is down 11 per cent in real terms and mining (including oil) extraction is flat. But real estate’s contribution to GDP has surged 35 per cent since then.

    – This is a global trend and we’re in a global RRE bubble. This should be obvious, since central banks are a (nefarious) global pheonomenon.
    – Churning RRE among the populace is meant to instill a feeling of “wealth” and success. But it’s only a distraction and a hollow replacement for solid manufacturing jobs that were off-shored by globalist interests (read the wealthy and esp. banks). The financialization of RRE also enabled the banking cartel to reap handsome profits at everyone else’s expense.
    – Since governments also gain wealth and power from these crony relationships with the banking cartel, they’re certainly not against it.
    – I’m sure everything will work out just fine though. /s

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