Chinese Language Article Summarizing Canadian Housing Bubble Arguments

Chinese Language Article from Canadian Home

Canada's housing market needs deep rate correction, a more powerful indicator. In 2009, the proportion of GDP, residential investment accounted for 6.48%, slightly lower than 6.76% in 2008 and 2007 peak of 7.13%. The previous peak in 1976 and 1989, respectively, 7.26% and 7.18% of what we all know that the last century, the early 80s and early 90s how the Canadian housing market, the tragedy occurred. Percentage of GDP, residential investment peaked, the housing market collapse in a few years will be declared.

How do you say Danger! Danger! Will Robinson! in Simplified Chinese?

Note: there are some issues with numbers/currency getting translated later in the article. (Per Jesse in the comments: 1 million = 10,000.)

More information about CanadaMeet and Canadian Home Network: "Home network is the most popular Canadian immigration and Chinese Web sites, in Canada and China has millions of users.

Monthly unique users in Canada and China: 200 million (November 2010 Statistical Report)
For Canada and China: 55% traffic (110 million) from Canada, 45% (90 million) from China"

Hat Tip: Van MD at VCI

Australia Capital Cities down 2.1% on March Quarter Seasonally Adjusted

Houses down. Rents up.
30 April 2011 RP Data – Rismark Home Value Index Release

The latest RP Data-Rismark Home Value Index results show capital city dwelling values were flat in the month of March (-0.2 per cent s.a. and 0.0 per cent raw). However, over the March quarter capital city home values softened noticeably (-2.1 per cent s.a. and -0.4 per cent raw).

In the non-capital city regions the story has been similar. In the year to end March 2011, ‘Rest of State’ house values were relatively unchanged (-0.5 per cent s.a.). However, the March quarter was a weaker one, with house values declining by -1.8 per cent s.a. (-0.7 per cent raw).

At the end of the March quarter, in the capital cities the national median dwelling price was $455,000. For all regions across Australia, the national median dwelling price substantially lower at $410,000.

This is followed by lots of pixels being spilled praying for a soft landing.

“Clearance rates are bouncing around the low fifty percent mark each week, the number of homes being advertised for sale is almost 30 per cent higher than at the same time last year, and sellers are being forced to adjust down their price expectations. Before there is any real upwards pressure on home values there will need to be some absorption of effective supply and a return of sustained buyer confidence to the market,” he said.

Wait, where's the housing shortage?

“In contrast to the fall in home values, gross rental yields have been improving with apartments and houses now delivering a gross return of 4.9 per cent and 4.2 per cent, respectively, in March 2011 according to RP Data-Rismark’s estimates,” Mr Lawless said.

A normal recommended rental yield is 7%, absent capital growth potential. This doesn't include the tax benefits of negative gearing. Tolerance for low rental yields seems the norm in Australia. There's been noise about changing the negative gearing rules, but I doubt anyone would take such action at a time like this, given the shock it would cause to the market (rents are actually sensitive to supply and demand, so rents won't be the side of this equation to give if negative gearing is no longer favorable).

Teranet Data Is Up for February 2011

No surprises here. February's market was juiced by the announced changes in mortgage rules.
housepriceindex.ca

Up slightly or flat for all but Calgary, which continued the same slow slide.

Perth Prices Continue to Decline

Home prices declined nationally in March quarter: APM

Australia's sluggish housing market remained just that in the first three months of this year with prices falling 0.6 per cent nationally, according to the latest data.

The fall in house prices follows near-record levels of housing stock coming on the market, the period homes are advertised for sale has also lengthened considerably.

Nationally, prices are up 0.2% year on year.

Perth house, unit prices keep falling

According to Australian Property Monitors quarterly house price report, median prices for Perth fell by 1.1 per cent between the start of January and the end of March, and 4.1 per cent across the past 12 months (the second biggest drop nationwide), to $540,978.

Brisbane fell 2% for the quarter 4.3% year on year.
Hobart fell 2.3% for the quarter 1% year on year.
Adelaide fell 4.8% on the quarter 0% year on year.
Darwin fell 2% on the quarter
Sydney down 0.4% on the quarter
Melbourne at 0% on the quarter
Canberra up 0.2% on the quarter

(if I find more year on year numbers, I'll add them in. The ABS data is due out shortly, so it's academic anyway.)

Grantham: 25% Chance China Will Stumble by Next Year

China Stocks Drop for 5th Day, Post 2011’s Longest Losing Streak

Jeremy Grantham said there is a 25 percent chance that China will “stumble” by next year over imbalances such as too much capital spending, an overheating real estate market or accelerating inflation.

“You could have a financial stumble, a housing stumble, a stumble from rebalancing of capital spending, or any combination thereof,” Grantham, chief investment officer of Grantham Mayo Van Otterloo & Co., said in an April 26 interview in Boston.

Sydney's Housing Market Shifts Unexpectedly

Property sales are heading west as the east slumps

SYDNEY'S great property divide is being turned on its head, with the wealthy Eastern Suburbs suffering a shock 15 per cent slump in property prices, while values in the city's west continue to soar.

The most prominent indicator is new housing finance which is now 30 per cent below levels reached in the first-home buyers frenzy of 2009. This reluctance to buy is also shown in the numbers of first-home buyers looking for property - only about 96,000, compared to 190,000 at auctions in late 2009.

Housing sales have also tumbled. Ray White Real Estate said the value of the houses it sold in March was 16 per cent down on March 2010 figures. Agencies also believe the number of houses on the market is at the highest level ever recorded in the city.

Property monitors and analysts are stunned by the sharp reversal in fortunes in traditional real estate hot spots, claiming the nine-month plunge has wiped billions from the collective wealth of the city's richest homeowners.

ARGH! It's not wealth. Unrealized paper gains on real estate are not wealth any more than debt is wealth, although at least the debt can claim to be real.

Let's say there is a little town called Two Rivers. It has 100 houses, all alike. Houses sell for $100,000 in Two Rivers and have done so for years, making the collective valuation of the town come in at $10,000,000. But one day this nice lady in a big yellow hat drives through town and she sees this little street of houses lined with tulips. Yellow Hat Lady adores tulips. She offers $150,000 for two houses (one for her and one for her dog) and the owners sell. By the standard of real estate valuations, every house in Two Rivers is now worth $150,000 and the collective valuation is now $15,000,000.

Truly, is that rational? One crazy buyer, or handful of buyers, or a mortgage fraud ring, get to decide the value of an entire swath of property? Crazy Yellow Hat Lady doesn't have an econ degree, may not even be able to balance her checkbook, but because she has more money than sense she gets to decide, in one fell swoop, that Two Rivers is now $5,000,000 wealthier. Seriously. That's how real estate "wealth" works.

If you think the moment Yellow Hat Lady took hold of the keys to her two houses that $5,000,000 of wealth suddenly materialized in the town square of Two Rivers like it was beamed in by Mr. Scott's transporter, then sure, you probably also agree that Sydney lost "billions of collective wealth".

Nice Summary of Bubble Arguments in the Star

Housing prices to drop 25%, forecaster predicts

“The recent housing boom has resulted in the largest rises in house prices ever seen in Canada, which have been similar in magnitude to those during the recent boom in the U.S.,” said Capital Economics analyst David Madani in a report released Thursday. “Unfortunately, the subsequent falls in prices could also be just as severe as those elsewhere.”

And the bubble denier:

“The price run-up in Canada has been based on strong economic fundamentals and demand from owner-occupants, whereas in the U.S., housing production was in excess of the demand that was justified by economic conditions,” said Toronto housing economist Will Dunning. “There was a large element of speculation in the U.S. that has not been present in Canada.

Everyone said this in the U.S. too. Problem is, speculators holding houses hides the oversupply. As well, anyone who buys in fear of "being priced out forever" IS a speculator, whether they plan to live in the house or not.

As in the U.S., financial innovation and very low interest rates have allowed Canadian consumers to take on more debt, and house prices are high relative to income, says Madani.

Anytime you see the words "financial innovation" substitute "ponzi scheme". You'll do better.

China's Black Market in Forged Backgrounds for Immigrants to Canada

You know what really shocked me? Investigative journalism! More of this, please.

How China’s ‘crooked consultants’ help the rich enter Canada

He [the Globe and Mail's invented persona] has the required minimum of $1.6-million in assets. What he doesn’t have are the documents Canadian immigration officials want: neither banking and pay statements to show that his wealth has accumulated gradually and legitimately nor proof that he has paid taxes on it. He also doesn’t have the necessary two years’ experience in managing employees.

In China, however, manufacturing a personal history that will satisfy Immigration Canada is no problem for almost anyone willing to pay

An estimated 400 firms based in China offer their services to prospective immigrants. Of the 22 approached by The Globe’s fictitious client, no fewer than 18 advised fabricating documents to produce the required background.

Although many suggested he ask someone who owns a company to create the income and tax documentation, eight said they could produce the papers themselves. Two even offered to have a Canadian company speed the process by hiring the applicant, if only on paper.

The minister acknowledged that embassy officials struggle with the sheer volume of applications from China – which accounted for more than 32,000 of the 45,000 the program received in total last year.

Interesting, the consultants blame the system itself for being too choosy and competitive.

But a veteran consultant who divides his time between China and Canada argues that honesty has become a handicap. He said the investor system is now so rife with fraudulent applications that anyone who fails to add some “polish” almost certainly winds up at the back of the line.

- According to the state-run China Daily newspaper, about 2,000 of the applicants [in 2009] were from China and they transferred nearly $1-billion into Canadian banks.

Leveraged at 20:1, that's enough to cause some serious house price inflation.

Canadian Households In Trouble, or Not?

We've not heard anything out of CAAMP lately. Usually there is some kind of April/Spring report. This matters only because various blogs and outlets have been quoting the November 2010 report in support of those wise, highly cushioned Canadian households.

Ability to Afford Interest Rate Increases
Given that interest rates in Canada have been at very low levels for a prolonged period, concerns have been expressed that many home owners may be unable to afford their payments when rates inevitably rise.
. . .
This issue of CAAMP’s “Annual State of the Residential Mortgage Market” further explores the issue. It confirms, again, that a vast majority of Canadians have substantial capacities to afford higher interest rates. The survey asked mortgage holders to indicate “the amount at which, if your monthly mortgage payment increased this much, you would be concerned with your ability to make your payments”. The responses indicate:

• The average amount of room is $1,056 per month on top of their current costs.
• Just 2% indicated that they have no room (the affordable increase is $0).
• A further 2% indicated their room is $1 to $99.
• 5% indicated that their room is $100 to $199.
• 6% reported room in the range of $200 to $299.
• This leaves 84% whose capacity is $300 per month or more.
• Even for those who originated the mortgage within the past year, the distribution of answers is essentially the same.

There is a sizable minority (about 350,000 out of 5.65 million, or about 6%) who would be challenged by rate rises of less than 1%, and a further 225,000 (5%) have thresholds in the range of 1.00% to 1.49%.

I don't know why this report was seen as great news. 575,000 households are living on borrowed time. If expected rate increases pushed half of these households to sell, that alone would whack the market. Remember, real estate prices are set on the margin, a few percent out of line, up or down, sways a lot of valuations.

Now we have a survey done by TD, just out:Canadians struggling to save and pay off debt

In the report, 38 per cent of Canadians surveyed said they had no savings at all.
. . .
One-third of Canadians who responded to the recent online survey also said they didn't have enough money to cover living expenses like rent or food bills.

The survey found that 54 per cent of the 1,003 people who took part in the survey said it was a real struggle or impossible to save.
. . .
On the flip side, 30 per cent of respondents said they had enough money saved to cover living expenses for at least four months.

The fiscally healthy 1/3 aren't going to save you, by any means. In the U.S. roughly a third rent, a third own outright (this used to be true in Canada but has fallen to something around 25%) and a third own with a mortgage. That housing disaster in the U.S. was caused by a mere 1/3 of the households.

Back to the CAAMP survey. As to the $300 a month cut off. That applies to the average mortgage across Canada. If we take an average house price of 345,000 as a mortgage at 3.5% interest rate, that's $1550 a month. At 5% interest rate, that's $1850 a month. Sure enough, $300 with no margin for error in the interest rate hike. But Vancouver and Toronto are far above the average price. Under the same terms, at the average price, the jump in payments will be $700 in Vancouver and $380 in Toronto. $80 might not sound like a lot, but given that 225k households are pushed over the fiscal edge by an additional .5% interest rate hike, that higher average will accentuate the panic selling in those cities when households get into trouble.

China's Wealthy Less Interested in Property Investment

China's rich less enthusiastic about property investment in early 2011: report

Investment by the country's rich in the real estate market took up 14 percent of their overall investment portfolio in early 2011, 4 percentage points less compared to the same period last year, according to a report jointly released Wednesday by the China Merchants Bank and Bain & Company business consulting firm.

The report said the number of people with assets worth more than 10 million yuan in China reached about 500,000 by the end of 2010, up 22 percent compared to the end of 2009. This number was expected to rise to 590,000 by the end of this year.

60% of Toronto Condo Sales to Mainland Chinese

Why is Cam Good the only source for data? Or shall I say "data".

The new real estate protectionism is misguided

In the last two months, we've sold over 700 condos in Toronto. Sixty per cent went to Mainland Chinese buyers.

There is a rapidly growing middle class in China which is just now beginning to realize they can afford homes abroad.

Uh, yeah, and that middle class make $3000-$6000 per year. That doesn't put condos anywhere within budget. Since you talk to all of these Chinese buyers, why don't you ask them where the money came from? We're all quite curious to hear the answer.

For that, we should be grateful.

This from the guy who gets a percent of every sale. And a few boomers will time their escape, but what about everyone else who wants to buy?

But instead of gratitude, I see growing fear and resentment that foreign buyers are inflating prices and pricing "us" and "our children" out of the market.

You act surprised. "Please sir, may I have another?"

It's too late for protectionist measures anyway. There are so many Chinese here already.

Ha ha, he did say, "suck it up."

We are a nation of immigrants after all and Chinese Canadians are some of the best. I've got no tolerance for this kind of attitude. In fact, I would love to see the advocates of this nonsense debate their ideas with some native people. I think they would really enjoy the irony.

Assuming the argument has merit, which I honestly don't want to get into since Canadian culture isn't my culture. Addressing the logic only . . . Why would a repeat performance have more validity? This is your argument: that some people got pushed aside once, so they have no right to speak out if it happens again? Seriously weak tea.

Let's look at what this global trend is doing to benefit us: It's driving demand and creating a real estate industry that is the envy of the entire world.

OMG. You look at the U.S. and make this thoroughly specious argument? Dear mother of realtor lockboxes you are willfully ignorant.

Our land, homes and businesses have become more valuable

This is just like a fortune cookie, except you always add "on paper" to whatever a realtor (or banker) says. Valuable ON PAPER. The supply of future fools will run out. Every single bubble in history they have run out. Then and only then will Agent Weak Tea grasp the problem.

The argument for protecting our real estate from offshore investment is not economic, but emotional.

It is actually both. It's straightforward what happens when foreigners bring too much money to your shores: inflation. Brazil figured this out very early in this game, they were the only ones. In Canada, heads will roll.

Relax. Stop feeling sorry for yourself and pick up the phone to call a realtor or a mortgage broker, either of whom will be more than happy to show you how easy it can be to get your real estate groove on.

OMFG. OMFG. Seriously. I can't mock this. Satire is dead, long live satire.

Well, I'll give it a go, but it's going to be difficult. LOL.

Yeah. You there making 90k a year. Come on over and borrow 10 times that to buy a house. (cue Austin Powers) Yeah, baby. Get your groove on. What, you don't want to borrow ten times your income, you lazy, feeling sorry-for-yourself sap.

China Official House Price Numbers

Seems to be a bit of a discrepancy with other analysts' numbers.

More Chinese cities see home prices slip

Among major cities, Beijing prices were unchanged, while Shanghai saw a scant 0.2 percent rise, the statistics bureau said.

prices of new builds were lower in 12 of the 70 major cities tracked in March compared with February.
Eight cities had seen prices decline in February, while just three did so in January.

As for pre-existing home sales, 16 cities reported price declines in March, up from four in February. Prices remained unchanged in 10 cities.

From NBS directly

The number of cities with [new construction] sales price decreased amounted to 46, 16 cities more than the previous month. In March, the growth rate of sales price in 26 cities exceeded 5.0 percent, 2 cities more than that was in February.

More sign of speculation moving into the 3rd tier.

China Order More Stress Tests

China Orders Banks to Do More Stress Tests on Property Loans

Lenders should strengthen management of property-related advances and credit to local government financing vehicles, China Banking Regulatory Commission Chairman Liu Mingkang said yesterday, according to a statement on the agency’s website.

China has been getting a diminishing return on increasing investment in fixed assets. That would certainly hint at those loans to local government defaulting.

“Banks should prevent property loan risks and readily apply the various policies,” Liu said in a speech yesterday during the regulator’s internal meeting about the country’s economic and financial situation. “The sustainable development of China’s macro-economy faces uncertainties.”

And, looks like they may be aware of that. Of course, they could just bail the whole shebang out yet again. Fitch is aware:

There’s a “high likelihood of a significant deterioration” in banks’ asset quality after a record credit boom in the last two years, Fitch Ratings said April 12. More than half of Chinese banks’ 17.5 trillion yuan ($2.7 trillion) of new loans since 2008 were to either the property sector or local governments, both of which have “questionable repayment capacity,” according to the ratings company.

And a WT...?

He also repeated demands that banks ensure the growth rate of loans to small companies exceeds the average expansion of overall lending, while credit for the agriculture industry should increase from last year’s level.

Cutting agriculture off from credit when inputs are rising is going to do what to next year's harvest?

Sweden, Bubble Arguments Are the Same Everywhere You Go

The actual amortization periods for new Swedish home loans is now about 100 years for houses and nearly 200 years for tenant-owner apartments.

I just had to lead with that. You inherit your house outright from your great-grandparents, I guess. No great wonder the Swedes build to last.

The real bubble trouble is actually not the absolute household debt levels (Sweden is still below Denmark, thank you) but the recent sharp growth.

Swedish housing 'bubble' about to burst: agency

"Based on the fundamentals - such as income development and other factors - house prices are at unsustainable levels. We estimate that prices are around 20 percent above what they should be," Bengt Hansson said.

20%? Pikers.

You can read the whole thing. You could make a mad lib out of the article's key arguments and substitute any other bubble country.

Why did I look at Sweden today? Interesting story about that. I was looking at a list of countries' reserve requirements. The four countries without a reserve requirement: Australia, Canada, New Zealand, and Sweden. Coincidence?

Next up, the countries with a mere 2% reserve requirement. Hm, I wonder what's happening in South Africa . . . ?

Holy housing bubbles . . .

from clicks and mortar

Taiwan Election Issue High Real Estate Prices Addressed with Luxury Tax

New Taxes in Taiwan expected to pull down prices.

Taipei taxes luxury

Even the prospect of the tax changes had an impact before being approved by legislators, with the number of property market transactions plunging by double digits. New Taipei City, which mainly consists of suburbs and satellite cities surrounding Taipei, experienced a decline of as much as 30%. As a consequence, home prices dipped 3% to 6% in different parts of the island last month. Potential buyers expect house prices to drop much further, possibly by as much as 5% to 10% in Taipei City and by as much as 20% in New Taipei City.

According to Chang Chin-Oh, a reduction of residential property prices of 30 to 40% is reasonable, depending on the location in the island, which means a meaningful price reduction has yet to get underway. Homebuyers who actually want to move in as opposed to making profit out of their purchase should wait until at least the end of the year to see the actual effects of the new tax, he said.

hattip: Aussie Roy at greaterfool

Toward a "Subprime" Reset Chart for Canada

During the U.S. housing downturn the subprime reset chart was a much referenced tool for scoping out the future pain of overburdened homeowners. See example.

Canada badly lacks one of these. It also lacks a definition for "subprime". If there's one thing I love, it's a wide open field. The blank page is my favorite canvas.

But enough about me. Let's take a stab at a subprime reset chart.

Canadian "Subprime" Reset Chart - 35 and 40 year amortization renewals

I started with the CAAMP Surveys. These provide some nice information, such as: what percent of mortgages had activity, what percent were new originations, refinances and renewals. What percent were 35 year and 40 year amortizations. BUT (big caveat) this is survey data, not reality. For example, from what I can suss out, if you estimate the total mortgage debt based on the surveys you'll fall about 200 billion short of reality. But this kind of error means we're safe making some estimates from the surveys as they apparently underestimate mortgage debt.

I then turned to the Canadian Bankers Association Total Mortgages in Arrears to determine what basis to use for the percents from the CAAMP surveys.

Problem 1, CAAMP did not have lines on their survey in 2006 for 35 and 40 year amortizations (understandably, as who in the world would have imagined that). Also the survey was compiled before the change in insurance offerings, in any event. So I would have to guess at the numbers and I decided for this version to just leave it off. (More on how this might be estimated later.)

Problem 2, I don't know how many mortgages were closed/finalized each year. So the basis for the mortgage origination is simply the increase in the total number of mortgages from January to January when in theory some 1/25-1/30 of them were actually discharged that year and were replaced with new mortgages in the tally. (I decided this was minor given the other estimates going on.) But it might be causing a significant underestimation of the totals on the chart. Version 2.0 will make an attempt to address this.

Problem 3, I don't know whether the distribution of terms (1 year vs. 5 year vs. 7 year) is consistent across amortization schedules. I assumed it was. The percents used are:  1yr: 9%, 2yr: 5%, 3yr: 10%, 4yr: 5%, 5yr: 62%, 6yr: 4%, 7yr: 3%, 10yr: 2%.

Problem 1 Redux, Even though 35 and 40 year options was missing from the survey in 2006, some % (30% or so) have already been "reset" and are included in that more recent year's survey, so not all are missing.

Problem 4, The biggest estimation in this chart is the number of mortgages refinanced is computed from the CAAMP survey ratio of refinances to new originations multiplied against CBA reported total additional mortgages (computation as described in Problem 2).

What is "subprime"?

"Subprime" here has been defined here as any mortgage in excess of 30 years amortization. Why? Because anyone in a 35 or 40 year amortized mortgage is paying so little principal that to a first order approximation they are in an interest-only mortgage, and come reset time, it is definitely going to feel like an interest-only mortgage, depending on interest rates. Amortizations this long would not generally be considered the bastion of budget-wise households with a lot of extra monthly cash to spare, it strongly implies households that are stretching to meet affordability requirements. I'm sure some of these mortgages were issued to households who are highly responsible with their payments, are living well below their means, and just want payment flexibility, and 10 months out of 12 are actually making payments as if the mortgages are 15 year amortizations, but I'm willing to bet they are a small minority.

Validation

After making the estimates I went back to the CAAMP survey for 2010 and looked at the total percentage of renewals that year for 35 year and 40 year amortization mortgages. My estimates were 2% and .5% for 35 and 40 year respectively. The CAAMP survey indicated 5% and 3% respectively. Part of that shortfall in the chart are the missing data from 2006, part is possibly underestimation caused by using the survey data, as well as failing to take annual mortgage discharges into account. But, given that the numbers in the chart are lower than the only thing I could find to validate, I don't believe the chart is overestimating the situation. But the chart is still just that, an estimation.

This shortfall from the renewal numbers could be used to estimate 2006's 35 and 40 year amortization originations in a second version of the chart.

In Conclusion
Yes, this chart has flaws, but there isn't any other. If anything, I hope publishing a chart based on insufficient data will spur CMHC to issue an official one. This data should be public.

Chinese Buyers Abroad

An article from Qatar that fills in some of the gaps in the Mythical Chinese Buyer story.

Stymied at home, Chinese hunt for property abroad

But while Chinese buyers, or any buyers for that matter, may be welcome in severely depressed property markets such as those in the United States, the UK or parts of Europe, the inflows of Chinese money are causing headaches for economies elsewhere which are growing at a much faster clip.

To beat the rules, Sun, like many other Chinese, turned to her relatives for help. They pooled their annual quotas together to give her enough foreign currency to put a downpayment on the three houses, which were worth a total A$3m ($3.1m).

Kind of amazing that in a country with a long-term one child policy this person found 60 relatives to help him/her out with this little Yuan-export trick.

Others sneak their money out of China by disguising the funds as import bills. Such cracks in China’s capital controls will help feed demand for houses elsewhere. “We think that in a relatively short period of time and in a way that is measurable, Chinese buyers are going to account for something on the order of 10-20 percent of the London market,” said Gerald Allison, a director at global real estate agency DTZ in London.

China Reserve Requirements Up Again, Now 20.5%

China raises bank reserves again

Citi: Price drops of 34% in Beijing, 26% in Hangzhou

According to the Citi analysis, the decline is explained by shift in product mix.

Citi Price Drop Chart

Observations On The Chinese Real Estate Sector Following The Biggest Price Decline In 5 Years

We checked with the transaction details in the two cities, and the significant drop in March ASP was due to the change in product mix transacted in the period. For example in Beijing, in March, the number of high-end property units (ASP>RMB30K/sqm) transacted only accounted for 7.4% of total units transacted (25.2% in Feb), while low-end units transacted (ASP<RMB16K/sqm GFA) jumped to 36.5% of total units transacted (Feb of 9.9% only). Most of the other cities had similar situations. Local governments have kept strict pre-sale permit controls for high end projects while they encourage more launches of low-end projects, and the change in product mix should result in an ASP decrease.

I find this paragraph confusing. (ASP>RMB30K/sqm) is a price point not a housing sector. ASP<RMB16K/sqm GFA) GFA==Gross Floor Area? is just confusing. Both look like price per square foot declines on the surface, not necessarily product mix declines.

As to the numbers simply being fudged. My understanding of the new rules is the price of housing must track other economic growth numbers. That would leave room for a healthy rise in prices, if one were simply making up numbers.

So, what's next? The Chinese start dumping their cash into stocks and gold and silver instead? That is, until they have to cover their debts and then they start to panic-sell same?

China Maintains Ban on Property Developers Raising Funds

China upholds fundraising ban on property developers

To calm the property market, China has virtually suspended all fundraising plans by developers for over a year, whilst ordering banks to cut lending to real estate firms.

"All refinancing applications from listed developers have to be approved by the Ministry of Land and Resources," said Zheng Li, a senior official at the China Securities Regulation Commission.

They don't mention why off-shore fundraising is being tolerated.

In other, not fully implemented news, the total value of first quarter home sales rose 27% from the same quarter last year.

China Home Sales Rise in 1st Quarter Defy Intensified Curbs

“While these growth rates are below ones seen in early 2010, they remain high relative to what developers are reporting and what the policy tightening would have suggested,” Citigroup Inc. analysts including Ken Peng said in a report today. “We see this as a sign that the tightening probably has not yet been fully implemented at the local level. ”

Beijing House Prices Down 26% Month on Month

I don't know whether to believe this number. It's too crazy to contemplate.

Beijing Home Prices Drop for First Time in 19 Months in March

April 12, Prices of new homes in Beijing dropped 26.7% month-on-month in March, the first fall in 19 months, the Beijing News reported on Tuesday, citing unsourced data.

New home prices in Beijing averaged RMB 19,679 per square meter last month, down 10.9% year-on-year, the first annual drop since September 2009, the paper said.

A month earlier, home transaction volumes in Beijing slumped 70% m-o-m, thanks largely to the 15 new property rules unveiled in line with the State Council’s eight guidelines on the property market.

Okay, let's step back from this. There is enormous pressure from the central government to rein in prices. Maybe we're seeing paperwork tricks here, partly.

Inspectors probe real estate prices

"The central government was concerned that urban housing prices have affected the overall situation," Yun Xiaosu, the team's lead inspector and vice minister of Land and Resource, told government officials. Yun said the central government "vowed to vigorously fix the housing price issue."

The 16 regions are Beijing and Shanghai municipalities, Liaoning, Jiangsu, Zhejiang, Anhui, Fujian, Jiangxi, Shandong, Hubei, Guangdong, Hainan, Sichuan, Shaanxi and Gansu provinces, and Guangxi Zhuang autonomous region.

Back to the first article:

“The reduced transaction volume indicates the government’s policies have been effective in curbing speculative buying, and as far as I know, around 90% of the transactions were made by home buyers with actual demand,” a person from the Beijing Municipal Commission of Housing and Urban-Rural Development was quoted as saying in the report.

After the introduction of the home-buying restriction measures, the proportion of non-local buyers of second homes in Beijing dropped by more than 40% to only 7.6% of total buyers, the paper said.

The article says that the National Bureau of Statistics will release March's data on April 18th. So, we'll see more then.

When Banks Get Lax, Fraud Is to be Expected

Lax lending standards are a giant, neon, gold-ribboned, engraved invitation to commit fraud. The very nature of basing valuations on recent sales, rather than on the underlying economic value of the house based on rents, ensures that banks will lend into the teeth of a bubble. By doing so they leave the door wide open to fraud and money laundering.

To cash out significant money from the bank all one needs is a buyer claiming a house is worth more than the last sale in a neighborhood. The bank is ready and willing with cash. Then you turn around and three months later sell it again (inside your ring of associates) for even more money. Why is the house worth any of these sales amounts? Well, it isn't, really. In these cases it's not an arms-length transaction, but these transactions turn out to be indistinguishable from one inspired by raging house hormones. (In California, real estate agents sold properties within their own offices to inflate local prices and to generate cash flow.) How does the bank tell the difference? Well, turns out, they can't. And moral hazard helps make this sort of fraud a cakewalk. In the U.S. the moral hazard was securitization; Wall Street was screaming for any paper they could securitize and they paid cash without verifying a thing. In Canada it's partly securitizers (in the last three years), but mostly it's CMHC.

Defendants in massive mortgage lawsuit blame BMO for letting fraud happen

Hundreds of Albertans stand accused by BMO of being tied to 14 interconnected groups that allegedly inflated the value of homes and recruited "straw buyers" to assume liability for mortgages in exchange for payments between $3,000 and $8,000.

"The plaintiff was eager to loan money in a heated real estate market. As high ratio mortgage loans were fully insured, the plaintiff took no care whatsoever in approving loans or supervising those who had the authority to approve mortgage loans," reads a joint statement of defence submitted by Suneet Sharma, Rajesh Sharma, Anjna Sharma and several numbered companies.

"The plaintiff was wilfully blind in respect of the following: the fact that mortgage applicants were overstating the value of their assets; the fact that applicants were overstating their income; the fact that applicants were not intending to live in the properties being purchased."

The first is from the accusations in the suit. The second is from the defendants statement of defense. Neither have been verified, nor have charges been filed, but notice how they form perfectly matching puzzle pieces.

"Until then, the plaintiff's employees were praised for their high volume of mortgage loans," it reads. "The plaintiff knowingly participated in a conspiracy or scheme to make as much money as possible in a rising real estate market."

Plus ça change, plus c’est la même chose, which I'll translate as: Welcome to the next bubble level, Canada.

Australian Housing Market at 9.5 Months' Supply

RBA and government incentives hurt housing market

RP Data senior research analyst Cameron Kusher says that monthly sales stood at 37,500 in May last year, which was when prices peaked. By December, they were down to 27,500. So there is now 9 1/2 months' supply of houses on the market, up from 5 1/2 months' a year ago.

6.5 is considered stable.

A further finding is that variable rate mortgages destabilise housing markets, as people are encouraged to enter the market during periods of low interest rates without fully appreciating the interest rate risk they are taking on.

Fixed rate didn't save the U.S., but the rise of variable rate (because brokers earned more for writing them) certainly increased the pain. Proposals in the U.S. to shelve all but 30 year fixed have unfortunately gone nowhere. Keep beating this drum; it's important.

Canada's Safe Banks, The Myth, The Legend

When you talk to a Canadian they will assert that Canadian banks are wise and wondrous institutions. Where does this myth come from anyway? If they are so super-duper strong and perfect, why do they need bailouts at the first whiff of trouble?

Bailouts, you say? Never!

Canadian bank bailout total touches $186 billion (from december 2010)

It was about a year ago that I wrote a post about the $75 billion financial assistance program that the Canadian government provided to the Canadian banking fraternity between September 2008 and March 2009

That was CMHC taking on sour mortgages so those poor poor banks did not have to actually eat their bad loan decisions.

Yes, that tiny little decline of 8.9% necessitated a bailout of $75 billion dollars out of a total mortgage debt of ~$910 billion (average of 2008 and 2009 according to CAAMP). That would be a bailout on 8.2% of all mortgage debt, almost a one to one ratio. If we assume the same ratio applies again, that would mean a 35% correction on what is now in excess of $1008 billion in mortgage debt will require a bailout of $325 billion.

Admittedly, the growth in mortgages debt has been 90% in securitization, not the banks. That still leaves the taxpayers on the hook for the general bailout as they are the backstop for the mortgage insurance required for securitization.

The disclosure this week from the U.S. Fed is remarkable (via the Globe and Mail), and we’ve now learned that the U.S. government provided an additional $111 billion of financial assistance to Canada’s five largest banks.

[Related: Canadian Banks Use of the TAF]

Yes, they are totally safe banks. They just need a lot of bailout and liquidity help from not only their own government, but the Americans as well.

By the way, the TAF is now closed. If Canada decides to have a crisis entirely of their own making, that they cannot blame on their neighbors to the south, they will have to cough up their own emergency liquidity injections. If the Tea Party were not in charge of the house, the banks might get a warmer reception here, just to be neighborly, but I suspect they will get a nose thumbing next time around if there is no general crisis to hide behind.

Canadian 30 year olds are screwed

An investment advisor lays it on the line.
Canadian 30 Year Olds are Screwed

“Starter homes” in major Canadian cities can cost more than $500,000 today – prices that twenty years ago were considered only available to the wealthy. Now 30 year old kids making $60,000 a year are getting mortgage approvals to carry massive mortgages and think nothing about amortizing it over 35 years – ridiculous. Further, thirty five year olds think nothing about dropping $50,000 on a kitchen upgrade or a bathroom because, after all, it has to be done – we can’t live like this. On top of the monster mortgage, these kids are carrying sometimes six figure lines of credit as well. All these 30 somethings are leveraged to the hilt. No wonder the papers are full of stories of how Canadians now have some of the highest debt levels in the world – I have seen this happen over the last five years – my life has been full of dealing with everyone’s 30 year old kids.

Canada is full now of monster levels of mortgage debt for the average Canadian all financed at floating 1% mortgage rates as Canadians have taken advantage of the record low rates to buy homes the last few years. So, all the kids with the mega debt are floating in variable rates at 1%. What happens when (when, not if), mortgages rates return to traditional levels of 5% to 8% for a five year closed mortgage?

I've never ceased to be amazed by this. How the "safe Canadian banks" have been pushing what are in essence the same teaser-rate mortgages that sunk many buyers in the U.S.

You need to be mortgage free by age 50, 55 at the latest, to create extra cash flow to help the kids through school. That’s why 25, 30 and 35 year mortgages are insane. Twenty years max – or don’t buy the place because you can’t afford it.

30% of Chinese Homebuyers Shopping Overseas

The data are uncited, unfortunately. If anyone can get the video working, let me know. I tried five browsers on two operating systems with no luck.

Chinese people invest more in real estate abroad

Control measures on real estate have stimulated many Chinese people's interest in investing in real estate abroad. Because of current control policies, 30% of home buyers have turned their attention from the domestic market to overseas. Statistics show investors from the Mainland and Hong Kong account for 10.8% of the share in the market of new homes in the US. At this year's Beijing Spring Real Estate Trade Fair the number of overseas real estate projects accounted for 40%, an all time high.

In tangentially related news. China intent on keeping the Eurozone (and their all-important imports of Chinese goods) afloat.
China Premier Wen repeats vow to buy Spanish government debt

China is willing to buy more Spanish government debt, China Premier Wen Jiabao was reported as saying on China's state television on Tuesday, a reiteration of China's commitment to support the beleaguered euro zone nation.

Mish: Party in Australia Is Officially Over

Australian Home Sales Sink, Luxury Units Sell for Half Cost; New Home Loans at 10-Year Low; Australia Retailers in Deep Trouble; Party Officially Over

The buyer retreat comes as the stock of unsold houses mounts. Figures compiled by property analysts SQM Research show there are now 356,600 properties on the market, which is almost 50 per cent more than a year ago.

Please don't tell me it's different down under, and don't tell me there is a shortage of housing either. Skyrocketing inventory and falling demand says otherwise. Besides, it's a simple economic fact that home prices cannot sustainably rise above people's ability to pay for them. Nor can home prices sustainably rise several standard deviations above rental prices.

Look for the Reserve Bank of Australia to cut rates. It will not matter when they do. It was one hall of a party Australia, but the party is now officially over.

Heh, I said long ago that would be the real sign of the bust.

Next data releases of interest for Australia are the
Rismark Index from RPData which will be released April 30th
and the
Australian Bureau of Statistics, House Price Indexes: Eight Capital Cities, Mar 2011 which will be released May 2nd

Canadian Housing Bubble Draws Some Attention

I've been trying to avoid meta media posts, but this last week was busy enough on the general attention front that I'll make an exception.

The Canadian/Vancouver housing bubble got a lot of attention this last week.

Seeking Alpha

As the chart demonstrates, Vancouver home prices have surged far beyond total British Columbia GDP growth and personal income growth. In fact, for housing prices to revert back to the GDP growth rates by the end of 2011 (assuming the BC economy grows at 4% in 2011), we would require at least a 12% and up to a 31% correction in home prices. This of course assumes that BC’s GDP isn’t linked to a housing bubble bursting. In truth, the dependence on real estate to spur economic growth has been very apparent, especially in Vancouver, and therefore a deeper correction would actually be required to find a sustainable equilibrium.

The chart in question:

Globe and Mail

The current consensus is that Canada’s real estate market has achieved a “soft” landing and that prices will flat line but not decline substantially over the next several years. I disagree. The housing market in Canada is already in bubble territory. Average house prices have doubled in the last 10 years, while rents have risen by only about 30 per cent. The ratio of house prices to rent is now higher in Canada than in any other developed country.

Canadian Business Magazine

But amid this frenzied property chase, we've forgotten a crucial fact: the past decade has been far from typical for real estate. Between the late 1990s and 2006, the share of homeowners jumped four percentage points, to 68.4%. Now consider that it took from 1971 to 1996 for the ownership rate to increase that much. (Though Statistics Canada data are only available up to 2006, it's likely the next census will show the rate has risen further.) Prices nationwide have never appreciated like this before, and credit has never been so easy to come by, nor as cheap. For an entire generation of first-time homebuyers, these conditions are the norm. Their perceptions have been warped as a result.

"I've earned more from the increase in the value of my home than I have in my entire professional career as a writer," Ricci [award-winning novelist] says. "But the only way I can use that money is to run a credit line, and that's a dangerous habit to get into."

Still, a line of credit against the value of their home is how Ricci, his wife and two kids fund a portion of their admittedly frugal lifestyle, particularly when paycheques become sporadic. During especially tight periods, Ricci makes interest payments on the credit line with money from the line itself.

Evidence of Demand Pulled Forward in Vancouver

The closing of the window to obtain a 35 year amortization appears to have pulled some demand forward in the Vancouver market. This typically has two effects, it not only makes the months of demand look better before, it also starves the months after the event. Weekly numbers are a bit preliminary, so we won't know for certain what the rule change impact was until April's official numbers are released.

Agent Will kindly provides weekly stats from the REBGV, which I have charted below.

Weekly Sold Listings in Close-In Greater Vancouver Area

*Vancouver as defined on Agent Will's Website:

The numbers and chart you see above are generated from data provided by the Real Estate Board of Greater Vancouver. Areas included for the count are: Vancouver West, Vancouver East, Burnaby, Coquitlam, Port Moody, Port Coquitlam, New Westminster, Richmond, North Vancouver, and West Vancouver. South of Richmond, East of Port Coquitlam (Maple Ridge/Pitt Meadows), and North West of West Vancouver (Islands, Squamish, and Whistler) are not included.

One nice side-effect of the 18th deadlines is the sales impact should have percolated through the system by the end of the month.

Vancouver Juiced for Second Month

The market moves upward for a second month in a row after half a year of declining change in prices.

One possible explanation for the juice (much supported by anecdote, and some preliminary weekly data) is the high motivation for obtaining a 35 year mortgage imposed by a March 18 deadline. A lot of sales continued to trickle through the stats in the week after, btw.

April 3rd's numbers from Will's Weekly numbers at VCI indicate a sharp drop in sales two weeks after the rule amortization rule change. (Scroll down for second spreadsheet.)

If we assume the rule change was responsible for the leap in the market, what will prices look like if the previous trend returns in April?

REBGV HPI Projected Out April-Dec Based on Previous Trend

April should be informative on the reasons for the leap in February and March.

April will also be interesting on another front: 18th is the date after which CMHC will no longer insure HELOCs. I, personally, believe this is more significant as it will most likely shrink access to home equity for the BC residents who are using equity to remain afloat (BC has been at a negative savings rate for years).

China Raises Rates, Manufacturing Costs Force Factories to Move Out

China raises rates to tackle inflation

The central bank said the official one-year lending and deposit rates would be increased by 25 basis points from Wednesday, raising the deposit rate to 3.25 per cent and the lending rate to 6.31 per cent.

Analysts said the increase came earlier than many anticipated and suggested that price rises for March, to be published next week, were probably higher than expected. Consumer price inflation in China rose 4.9 per cent in February from a year earlier, the same as in January.

But politically sensitive food prices accelerated and producer prices increased 7.2 per cent, their most since October 2008. Even after the latest rise in official rates, the return on bank deposits in China is deeply negative once adjusted for inflation

As to the last line, join the club.

Not cheap or cheerful: south China's new paradigm

Some 30 to 40 percent of migrant workers didn't return to their factory jobs in Guangdong province's Pearl River Delta manufacturing heartland after the annual Lunar New Year holiday in February, said Stanley Lau, deputy chairman of the Hong Kong Federation of Industries. Typically the proportion is 10 to 15 percent.

"I don't know of any factory in China that can absorb both the raw material prices we have, the labor issues we've been looking at and the renminbi," China's strengthening currency, said Hubbs. The currency is also known as the yuan.
He's joining a wave of export manufacturers, big and small, that are moving from China's coastal manufacturing regions to cheaper inland provinces or out of the country altogether, in a clear sign that southern China's days as a low-cost manufacturing powerhouse are numbered.

The crash is precipitated by players heading for the exits.

The bubble is creating its own perfect storm.

Australian Banks' Usage of the U.S. TAF (Term Auction Facility)

The recent data dump (see below) contained data from Nov 3, 2008 to May 4, 2009

THE HEADERS ARE AS FOLLOWS

For the short lines:
ABA DISTRICT BANK_NAME AWARD_AMOUNT($MM) COUNTRY

For the long lines:
AUCTION_DATE ANNOUNCE_DATE AUCTION_QUANTITY SETTLEMENT_DATE MATURITY_DATE AWARD_RATE ABA BANK_NAME AWARD_AMOUNT($MM) COUNTRY

(Sorry for the mess, this literally is a data dump of emails and PDF snapshots of XLS attachments.)

The best way to read this is date, bank name, second to last column as millions of dollars. So the first line shows that on November 3 the National Australia Bank won an auction for $1.5 billion.

Auction Date 11/3/2008
11/3/2008 11/3/2008 $150,000 11/6/2008 1/29/2009 0.600 026007728 2 NATIONAL AUSTRALIA BK NY BR 1500 AUSTRALIA

Auction Date 1/26/2009
1/26/2009 1/26/2009 $150,000 1/29/2009 4/23/2009 0.250 026007728 2 NATIONAL AUSTRALIA BK NY BR 1500 AUSTRALIA

Auction Date 4/20/2009
026007728 2 NATIONAL AUSTRALIA BK NY BR 1500 AUSTRALIA

This data was released in accord with the Dodd-Frank Act. You can find the original (20,000 pages of) Discount Window Documents here

For more about TAF and the Discount Window try this: [PDF] TERM AUCTION FACILITY (TAF) – A KINDER, GENTLER DISCOUNT WINDOW

The TAF facility was closed on March of 2010. The is the only document I could find in the dump so this list is possibly missing borrowing by Australia. If you know of others, please let me know and I'll add it in.

Canadian Banks' Usage of the U.S. TAF (Term Auction Facility)

The recent data dump (see below) contained data from Nov 3, 2008 to May 4, 2009

THE HEADERS ARE AS FOLLOWS

For the short lines:
ABA DISTRICT BANK_NAME AWARD_AMOUNT($MM) COUNTRY

For the long lines:
AUCTION_DATE ANNOUNCE_DATE AUCTION_QUANTITY SETTLEMENT_DATE MATURITY_DATE AWARD_RATE ABA BANK_NAME AWARD_AMOUNT($MM) COUNTRY

(Sorry for the mess, this literally is a data dump of emails and PDF snapshots of XLS attachments.)

The best way to read this is date, bank name, second to last column as millions of dollars. So the first line shows that on November 3 the Bank of Nova Scotia won an auction for $2.8 billion.

Auction Date 11/3/2008
11/3/2008 11/3/2008 $150,000 11/6/2008 1/29/2009 0.600 026002532 2 BANK OF NOVA SCOTIA NY AGY 2800 CANADA
11/3/2008 11/3/2008 $150,000 11/6/2008 1/29/2009 0.600 113025765 11 BANK OF NOVA SCOTIA HOU BR 600 CANADA
11/3/2008 11/3/2008 $150,000 11/6/2008 1/29/2009 0.600 121026921 12 BANK OF NOVA SCOTIA SF AGY 100 CANADA
11/3/2008 11/3/2008 $150,000 11/6/2008 1/29/2009 0.600 026003243 2 TORONTO DOMINION BK NY BR 1000 CANADA
11/3/2008 11/3/2008 $150,000 11/6/2008 1/29/2009 0.600 026003243 2 TORONTO DOMINION BK NY BR 1000 CANADA
11/3/2008 11/3/2008 $150,000 11/6/2008 1/29/2009 0.600 026002558 2 CANADIAN IMPERIAL BK NY AGY 550 CANADA
11/3/2008 11/3/2008 $150,000 11/6/2008 1/29/2009 0.600 026002532 2 BANK OF NOVA SCOTIA NY AGY 200 CANADA
11/3/2008 11/3/2008 $150,000 11/6/2008 1/29/2009 0.600 113025765 11 BANK OF NOVA SCOTIA HOU BR 100 CANADA
11/3/2008 11/3/2008 $150,000 11/6/2008 1/29/2009 0.600 121026921 12 BANK OF NOVA SCOTIA SF AGY 100 CANADA
11/3/2008 11/3/2008 $150,000 11/6/2008 1/29/2009 0.600 026004093 2 ROYAL BK OF CANADA NY BR 300 CANADA
11/3/2008 11/3/2008 $150,000 11/6/2008 1/29/2009 0.600 026004093 2 ROYAL BK OF CANADA NY BR 1150 CANADA
11/3/2008 11/3/2008 $150,000 11/6/2008 1/29/2009 0.600 026002558 2 CANADIAN IMPERIAL BK NY AGY 420 CANADA

Auction Date 11/17/2008
026002532 2 BANK OF NOVA SCOTIA NY AGY 400 CANADA
113025765 11 BANK OF NOVA SCOTIA HOU BR 200 CANADA
026002532 2 BANK OF NOVA SCOTIA NY AGY 100 CANADA
026004093 2 ROYAL BK OF CANADA NY BR 250 CANADA
113025765 11 BANK OF NOVA SCOTIA HOU BR 100 CANADA
121026921 12 BANK OF NOVA SCOTIA SF AGY 100 CANADA
026004093 2 ROYAL BK OF CANADA NY BR 2650 CANADA

Auction Date 12/01/2008
026002558 2 CANADIAN IMPERIAL BK NY AGY 575 CANADA
026002532 2 BANK OF NOVA SCOTIA NY AGY 1500 CANADA
113025765 11 BANK OF NOVA SCOTIA HOU BR 100 CANADA
121026921 12 BANK OF NOVA SCOTIA SF AGY 100 CANADA
026003243 2 TORONTO-DOMINION BK NY BR 750 CANADA
026004093 2 ROYAL BK OF CANADA NY BR 160 CANADA
026002532 2 BANK OF NOVA SCOTIA NY AGY 100 CANADA
026002558 2 CANADIAN IMPERIAL BK NY AGY 5 CANADA

Auction Date 12/15/2008
026004093 2 ROYAL BK OF CANADA NY BR 200 CANADA
026002532 2 BANK OF NOVA SCOTIA NY AGY 500 CANADA
026004093 2 ROYAL BK OF CANADA NY BR 2700 CANADA

Auction Date 12/29/2008
026002532 2 BANK OF NOVA SCOTIA NY AGY 1800 CANADA
026004093 2 ROYAL BK OF CANADA NY BR 330 CANADA
113025765 11 BANK OF NOVA SCOTIA HOU BR 300 CANADA
121026921 12 BANK OF NOVA SCOTIA SF AGY 200 CANADA
026003243 2 TORONTO-DOMINION BK NY BR 1000 CANADA
026002558 2 CANADIAN IMPERIAL BK NY AGY 600 CANADA
026004093 2 ROYAL BK OF CANADA NY BR 700 CANADA
026003243 2 TORONTO-DOMINION BK NY BR 1000 CANADA
026002558 2 CANADIAN IMPERIAL BK NY AGY 5 CANADA

Auction Date 1/12/2009
026004093 2 ROYAL BK OF CANADA NY BR 140 CANADA
071004899 7 BANK OF MONTREAL CHICAGO BR 700 CANADA
026004093 2 ROYAL BK OF CANADA NY BR 2600 CANADA

Auction Date 1/26/2009
026002532 2 BANK OF NOVA SCOTIA NY AGY 2200 CANADA
113025765 11 BANK OF NOVA SCOTIA HOU BR 700 CANADA
026004093 2 ROYAL BK OF CANADA NY BR 300 CANADA
026004093 2 ROYAL BK OF CANADA NY BR 800 CANADA
026003243 2 TORONTO-DOMINION BK NY BR 1000 CANADA
026003243 2 TORONTO-DOMINION BK NY BR 1000 CANADA

Auction Date 2/9/2009
026004093 2 ROYAL BK OF CANADA NY BR 150 CANADA
026004093 2 ROYAL BK OF CANADA NY BR 2650 CANADA

Auction Date 2/23/2009
026002532 2 BANK OF NOVA SCOTIA NY AGY 1000 CANADA
113025765 11 BANK OF NOVA SCOTIA HOU BR 200 CANADA
121026921 12 BANK OF NOVA SCOTIA SF AGY 250 CANADA
026004093 2 ROYAL BK OF CANADA NY BR 225 CANADA
071004899 7 BANK OF MONTREAL CHICAGO BR 475 CANADA
026002558 2 CANADIAN IMPERIAL BK NY AGY 580 CANADA
026003243 2 TORONTO-DOMINION BK NY BR 750 CANADA
026003243 2 TORONTO-DOMINION BK NY BR 500 CANADA
026002558 2 CANADIAN IMPERIAL BK NY AGY 5 CANADA

Auction Date 3/9/2009
026004093 2 ROYAL BK OF CANADA NY BR 135 CANADA
026004093 2 ROYAL BK OF CANADA NY BR 2600 CANADA

Auction Date 3/23/2009
026004093 2 ROYAL BK OF CANADA NY BR 149 CANADA
026002532 2 BANK OF NOVA SCOTIA NY AGY 1500 CANADA
026004093 2 ROYAL BK OF CANADA NY BR 345 CANADA
113025765 11 BANK OF NOVA SCOTIA HOU BR 500 CANADA
026003243 2 TORONTO-DOMINION BK NY BR 1000 CANADA
026003243 2 TORONTO-DOMINION BK NY BR 1000 CANADA
026002558 2 CANADIAN IMPERIAL BK NY AGY 450 CANADA

Auction Date 4/6/2009
026004093 2 ROYAL BK OF CANADA NY BR 160 CANADA
026004093 2 ROYAL BK OF CANADA NY BR 2500 CANADA

Auction Date 4/20/2009
026002532 2 BANK OF NOVA SCOTIA NY AGY 1500 CANADA
113025765 11 BANK OF NOVA SCOTIA HOU BR 700 CANADA
026004093 2 ROYAL BK OF CANADA NY BR 270 CANADA
026003243 2 TORONTO-DOMINION BK NY BR 1000 CANADA
026003243 2 TORONTO-DOMINION BK NY BR 1000 CANADA

Auction Date 5/4/2009
026004093 2 ROYAL BK OF CANADA NY BR 800 CANADA
026004093 2 ROYAL BK OF CANADA NY BR 165 CANADA

This data was released in accord with the Dodd-Frank Act. You can find the original (20,000 pages of) Discount Window Documents here

For more about TAF and the Discount Window try this: [PDF] TERM AUCTION FACILITY (TAF) – A KINDER, GENTLER DISCOUNT WINDOW

The TAF facility was closed on March of 2010. The is the only document I could find in the dump so there is almost certainly missing borrowing by Canada. If you know of others, please let me know and I'll add it in.

Prices Continue to Rise in 82 of 100 Chinese Cities, Up 0.59% Month on Month

China March Residential Property Prices Up 0.59% Vs February - Data Provider

Residential property prices in 100 major cities in China rose 0.59% in March from February, faster than February's 0.48% increase, China Real Estate Index System said Friday.

...

China Real Estate Index System said property prices in 82 cities grew in March compared with the previous month, while 16 cities posted a decline in property prices over the same period. The remaining two cities posted no change. Seventy-four cities posted price increases of less than 1%, it added.

Beijing to Stabilize New Home Prices Like Other Cities

Beijing said it will stabilize new home prices this year and aims for a drop from 2010, the local government announced on its website late yesterday. Shanghai said on March 28 it will limit gains in new home prices to no more than the pace of economic growth and average income expansion.

About 40 Chinese cities said they will cap new home prices below annual economic and disposable per-capita income growth after local governments were ordered to submit home price control targets by the end of March.

Among the cities that announced targets, most connected home prices with the cities’ economic and income growth. Shanghai forecast in January that the city’s economy will expand 8 percent in 2011. It grew 9.9 percent last year from 2009, while average incomes jumped 10.4 percent.

If they are going to use averages to make their targets there is no worry. Although, this will create some new tension if rumors of large amounts of unreported income are true. Local governments are going to be ferreting those out to make their targets, given that it will be more profitable to report larger wage increases than to control property prices.

Australian Clearance Rates for March 27, 2011

The data are getting rather noisy, especially for Sydney. Not sure what's going on there. Fickle bunch or something. At any rate, I smoothed the chart this time so it's actually meaningful again.

Australian Clearance Rates Mar 27, 2011, smoothed over 4 months

The holiday was reduced to a single data point which was replaced with a rolling average number for the graph above.

Chinese Ban "Luxury" in Advertising

This is slightly old news, but when I saw the article in Pravda, I could not resist the Great Pull of Irony.

The rich must be hidden from the eyes of the poor

The authorities of Beijing have recently decided to ban the advertising of luxury goods in the capital not to hurt those who can never afford diamonds and pearls. The billboards displaying such words as "elite," luxury", "royal", etc can only foster feelings of hatred among the poor, Chinese officials believe.

The housing boom is all about stability; it's about keeping the masses employed. Watching the politburo (if I may) suffer the uncontrollable, almost Sorcerer's Apprentice style, knock-on effects of wealth concentration, unfair land grabs, institutionalized graft, and Tulip Condo Mania by the rich is all so fascinating.