Seriously, is there ANY issue that isn't seen as real estate related in Australia?

Will Google Glass change the face of real estate in Australia?

In the last 20 years, technology has been a major driver of change in Australia’s real estate industry. But will Google Glass really make a difference to the way we see property?

Record gap between Canadian and U.S. house prices

Canada-U.S. House Price Gap Hits A Record High: BMO Is there a fundamental reason why Canadian prices would be 50% more expensive, or is it just offsetting cycles?

The graph from the article says it all.

Top calls on Canadian Real Estate from Bank Economists

"Boom times are over for Canada’s housing sector" Canadian real estate and housing boom may be ending, Scotiabank warns

Housing has generated a staggering $1.7 trillion in net new wealth for Canadians since 2000.

I find that claim a bit misleading. Because housing is priced at the margin (i.e, one person in a neighborhood of 100 houses sells for 10k more and suddenly collectively the neighborhood is a million dollars richer. Are they really? They can't all access that wealth through selling, as that would tank the market. Unless there is a real structural change, locally, say, a company headquarters moves into town.

If everyone accesses that wealth through refinancing, that's not real wealth either as you've still got debt on the other side of the balance sheet which is sticking around no matter what the price is when you sell. And if you sell and move up the street, overpaying by 10k to get back into the market, then that's not real wealth either, that's a shell game.

· That investment increased, on average, by 4.2 per cent between 2000 and 2012, almost double the GDP growth rate of 2.2 per cent, and accounts for almost 7 per cent of overall economic output, the highest among the G7 countries and double the rate of the U.S.

· Forty-five per cent of that boost to the economy comes from new construction, 37 per cent from renovation and 18 per cent from real estate transaction and transfer costs.

Did you know that inefficiencies in a system could constitute economic "boost"?

· The total spent to create all those granite-clad kitchens and Euro-style bathrooms, and boost the value of Canada’s housing stock, ...

UGH. There is only so much in wages that can be spent on shelter, over the long term. Granite or no granite. The rest is an economic sinkhole. Now, if you actually invested in efficiency, or healthfulness, that might come back as a return. Granite? Not so much. By the way, don't forget to seal those shiny new counters annually, or you will have to replace it a lot sooner than you think.

Australia Survey: 1 in 5 home buyers getting help from parents

19% of all buyers, 42% of all first time buyers.

Mum and dad help one in five home buyers

The report found parental assistance is most pronounced in NSW and in Victoria, but is hitting other parts of the country as well. “Affordability is a growing issue in Queensland as well, but it’s a problem across the board,” she said. Of the about 1,200 people surveyed, the report found more than 30 per cent felt they could not afford the mortgage repayments required to get into the market, a similar amount (32.7 per cent) had been renting for five or more years and 50 per cent couldn’t afford a home deposit.

And how many of these parents are dipping into their own housing equity to provide help? Refinances are rising and how scary is it that the money could be just turned back around into housing again. Bubbles are pernicious like that.

Chart of Housing Finance from RP DATA Blog
http://blog.rpdata.com/2014/04/housing-finance-data-february-2014/

These longer running bubbles are drawing more victims in. In the U.S. there was a bit of a generational wealth transfer due to the percent of downsizing retirees during the bubble. And banking shenanigans made asking parents for money less necessary. The dot com bubble that preceded the housing bubble had the advantage of smaller reach, hence a faster recovery from the resulting correction. The more players in the game at the time of the correction, the longer and harder that correction will be.

Globe and Mail's Canada House Price Correction Calculator

How badly would you be hurt in a housing market price correction?

Ottawa home prices are down 2.5 per cent on a year-to-date basis, according to the Teranet – National Bank National Composite House Price Index. Montreal is off 1.0 per cent, Quebec 1.2 per cent and Halifax 2.6 per cent. “The next markets that will crack are the Prairies outside of Alberta,” said Mr. Rabidoux, president of market research firm North Cove Advisors Inc.

link to the calculator

 As you play with the % downturn buttons, note that bubble corrections tend to be shark-fin shaped. Like this chart of the Dow Jones

China's money supply rose 12% last year. That's low for them, and credit is scarce.

Reform is hard. As Credit Dries Up, Smaller Companies in China Feel the Pinch

At first glance, it seems extraordinary that anyone in China would have trouble finding credit, given how much money is already sloshing around the country. China’s broadly measured money supply passed that of the United States in August 2009, and it has been soaring ever since. China now has two-thirds more money than the United States, swirling through an economy that is a little over half the size of the United States’.

The central bank has been gradually pushing up open-market interest rates, in the hope that competition will start playing a greater role than political influence in deciding who can borrow money. That policy could help small and medium businesses obtain loans in the long term, but it has had the short-term effect of pushing up borrowing costs.

A guide to South Africa's economic bubble and coming crisis

A guide to South Africa's economic bubble and coming crisis

Unsecured loans, or consumer and small business loans that are not backed by assets, are the fastest growing segment of South Africa’s credit market and are essentially the country’s own version of subprime loans. Unsecured loans have grown at a 30 percent annual compounded rate since their introduction in 2007, when the National Credit Act was signed into law. Unsecured lending has become popular with banks because they are able to charge up to 31 annual interest rates, making these riskier loans far more profitable than mortgage and car loans in the low interest rate environment of the past half-decade. The unsecured credit bubble is estimated to have boosted South Africa’s GDP by 219 billion rand or U.S. $20.45 billion from 2009 to mid-2013.

Like U.S. subprime lenders from 2002 to 2006, South Africa’s unsecured lenders target working class borrowers who have limited financial literacy, which has contributed to the country’s growing household and personal debt problem. A 2012/2013 report from the National Credit Regulator showed that South Africa’s 20 million citizens carried an alarming 1.44 trillion rand or U.S. $140 billion worth of personal debt – equivalent to 36.4 percent of the GDP. In addition, household debt now accounts for three-quarters of South Africans’ disposable incomes.

Sadly, they seem to have stopped updating the data behind this widget, but for an illuminating chart, here is the old Clicks and Mortar from the Economist for South Africa.

Interestingly, house prices don't look alarming at relative to average incomes. Since this isn't a graph based on the median, it's possible that income disparity AND a credit bubble are making this chart look rational. South Africa's income disparity is among the highest in the world.

Foreign buyers buying and demoing habitable homes in violation of rules

Outcry over house demolitions breaching Foreign Investment Review Board rules

But Mr Raimondo said: “There’s certainly heritage-featured homes that are quite habitable that are being bulldozed for huge French provincials selling for multi, multi-millions, three million.

“It may well be that some of that doesn’t comply with the FIRB rules.

“It’s been going on for some time now.’’

He said it was “obvious the majority of buyers in a certain area (are) doing this”.

Chinese, Canadians, U.S. and Singapore big buyers of Australian Real Estate

Locals priced out by $24b Chinese property splurge

Wealthy Chinese buyers have purchased $24 billion of Australia housing in the past seven years, and over the next seven years an additional $44 billion will be spent on residential property, Credit Suisse estimates.

Chinese top the list of foreign investors in Australian residential property. Chinese top the list of foreign investors in Australian residential property. There was $17.2 billion worth of approved residential property investment coming in from overseas in the year June 30 2013, down from $19.7 billion in the previous period, according to the Foreign Investment Review Board.

Foreign money is roughly 5% of the entire market. Deutsche Bank economist pins high costs on low interest rates and domestic buyers. But first time buyers appear to be feeling the squeeze.

First-time buyers in February comprised less than 10 per cent of all mortgages processed by mortgage broker AFG for the first time since June 2010.

The article goes on to list the ways foreign investment could be avoiding FIRB approval.

Moving money from Shenzhen to Hong Kong on the black market

Inside China's Underground Black Market Banks

“We have a relative in Hong Kong who does business in Mainland China,” one of the Zhous said. “Once a week, he visits us to pick up Renmenbi for his import business, and in return he maintains a pool of Hong Kong Dollars for us across the border. He is family, so we trust him. We all avoid the official exchange rates, and everyone is happy.” Unless a client makes an extraordinarily request, this exchange involves about $500,000 per week, though it could be up to fivefold that amount if it is a public holiday, like during Golden Week in October.