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Standing Empty In What Is Anything But A Fairytale For Investors

A report from CKRM in Canada. “Across Canada, the downtown in the oil and gas sector has hit many hard. The impact has certainly been felt in Saskatchewan, perhaps no more so than the city of Estevan. ‘The housing prices have decreased about 20-25 percent now, as compared to 2014 before oil prices decreased, said Linda Mack, a realtor with REMAX Blue Chip Realty. ‘If things continue the way they are, people have been talking, it’s going to be pretty scary.'”

The Wall Street Journal on the UK. “Years of rapid price growth made homes in the British capital some of the most expensive in the world, and lured overseas investors eager to ride a wave of rising prices. Now, with uncertainty pulsing through the economy and the withdrawal of the U.K. from the European Union slated for the spring, the market is in reverse and some agents warn it faces a bleak future.”

“Prices are down 14% from their 2014 peak. There are 66,000 new units under construction in London, while just 4,200 sold in the third quarter, data firm Molior said. Many of the new projects are aimed at foreign investors. ‘The obvious market for which an awful lot of that stock was built has evaporated,’ said buying agent Henry Pryor. ‘I think we are entering what will be the darkest hour for the housing market.'”

From AFP on Turkey. “Deep in a provincial region of northwestern Turkey, it looks like a mirage — hundreds of luxury houses built in neat rows, their pointed towers somewhere between French chateau and Disney castle. Meant to provide luxurious accommodations for foreign buyers, the houses are however standing empty in what is anything but a fairytale for their investors.”

“‘Three out of four companies seeking bankruptcy protection or bankruptcy are construction companies,’ said Alper Duman, associate professor at Izmir University of Economics. ‘Whether we call it a construction bubble or a housing bubble, there is a bubble in Turkey.'”

“He pointed to unsold housing stock as the main indicator of this, with data showing in that over the past 16 years 10.5 million apartments have been built but only eight million have been approved for use. ‘There is a high risk this bubble will burst,’ he said.”

From Nine News on Australia. “First home buyers watching the decline of house prices in Australia’s biggest cities are unlikely to find bargains immediately, experts have warned. ‘I think [furthers price falls] are inevitable. Common sense tells you. Remember the Perth prices have been falling now for the best part of five years, Darwin prices the same as well,’ 9News Finance Editor Ross Greenwood told the TODAY show.”

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This Post Has 21 Comments

  1. ‘Remember the Perth prices have been falling now for the best part of five years, Darwin prices the same as well’

    It’s almost like this bubble has been popping for some time.

    ‘The housing prices have decreased about 20-25 percent now, as compared to 2014’

    ‘Prices are down 14% from their 2014 peak’

    Ahem…

    You know prices are sinking like a turd in a well all over the planet, but only in the UK are they blaming it on Brexit.

    1. 20-25 percent now, as compared to 2014’

      If iron ore prices are any indicator, you guys can expect another 50% off.

    1. Maybe they can somehow transport the unoccupied Disney houses to SoCal, to help alleviate our chronic housing shortage.

    2. Turkey is playing host to nearly 3 million Syrian refugees. How many could they house in those ghost towns?

    3. Row-castles.

      Separated by a few feet along a dirt road with miles and miles of empty land in every direction. Notably lacking any sort of carriage house. Sort of like the high rises without any elevator.

  3. The obvious market for which an awful lot of that stock was built has evaporated,’ said buying agent Henry Pryor. ‘I think we are entering what will be the darkest hour for the housing market.’”

    Au contraire, Henry. The harder shack prices crater, the more priced-out buyers will rejoice. The “darkest hour” will be illuminated by the bonfire of speculator get-rich-quick dreams.

    1. “Too much resistance in stock market for a ‘straight up’ recovery, according to Morgan Stanley strategist.”

      True, but nothing ever goes “straight up.” Still, that doesn’t mean we can’t get a near parabolic blow-off top care of the Fed and its asset pumping schemes.

        1. Oh no, not the dreaded ‘D’ word! Because it’s a terrible tragedy if prices ever become more affordable, according to central bankers, especially when everyone is leveraged out the wazoo and the value of the collateral is dropping faster than a turd in a well.

          Time to foam some runways again?

          China’s sluggish prices raise deflation fears
          By MarketWatch
          Published: Jan 10, 2019 2:12 a.m. ET

          BEIJING–Consumer and producer prices decelerated sharply in China last month, compounding the challenge for Beijing in boosting sluggish demand in a deepening economic downturn.

          Consumer prices rose in December at their slowest pace in six months, 1.9% from a year earlier by China’s benchmark index, while prices charged by producers increased by the lowest rate in two years, at 0.9%, according to official data released Thursday.
          …

        2. No worries on this announcement, as no U.S. job losses are mentioned.

          Ford to cut thousands of jobs in turnaround plan
          59 minutes ago

          Carmaker Ford has announced plans for a major shake-up of its operations in the UK and mainland Europe.

          It is expected to lead to thousands of job losses across the continent, although the immediate impact on its UK operations is expected to be limited.

          But Ford Europe boss Steven Armstrong said should the UK leave the EU without a negotiated deal, a further review of UK operations would take place.
          …

        3. The Financial Times
          Global Market Overview Markets
          European equities dip amid US shutdown fears
          Dollar rebounds after Federal Reserve signals more cautious approach to rates
          Kate Allen in London and Hudson Lockett in Hong Kong 46 minutes ago

          Wall Street is expected to follow European equity markets downwards as the positive glow from this week’s US-China trade negotiations fades and tempers fray in Washington over the ongoing government shutdown.

          The FTSE 100 is down 0.1 per cent after earlier trading down by as much as 0.6 per cent, and the Europe-wide Stoxx 600 is down 0.4 per cent after falling 0.7 per cent in early trading.

          Futures contracts suggest that the S&P 500 index will open 0.7 per cent lower.

          “The breakdown of talks on the US government shutdown has made investors worry a little,” said Paul Donovan, chief economist at UBS Global Wealth Management. “The emphatic way in which the talks fell apart may raise investor concerns about what the next two years in Washington is likely to look like.”
          …

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