17 Countries with Housing Bubbles

According to Nouriel Roubini, cheap credit is driving up prices in some smaller (and not so small) markets. These 17 countries may have housing bubbles. If they pop, God help us all.

Roubini sees housing prices getting out of whack in quite a few small and mid-sized nations that are well-governed and managed to avoid the worst economic effects of the financial crisis: Switzerland, Sweden, Norway, Finland, France, Germany, Canada, Australia, New Zealand and the London metropolitan area in the U.K. He adds some key emerging markets that show the same dynamic: Hong Kong, Singapore, China and Israel, and major urban centers in Turkey, Indonesia, India and Brazil.

Hat Tip: 4SlicesofCheese at Vancouvercondo.info

Toronto Condos Skewing National Data

CMHC Preliminary Housing Start Data Graph of Absorption of Condo units.

The absorption rate has yet to be impacted, and if there are enough wealthy foreigners, perhaps it won't ever be, but the market has yet to be tested. This is quite a bubble of inventory coming in the pipeline, starting to build at around 17 months ago. Assuming 18-22 months is the shortest time from breaking ground to delivery, we have a few more months before people are going to have to get full financing or do a re-assignment, or bail, depending up on their circumstances. 

55% of First Time Buyers worry about affording their home with higher interest rates

First-time homebuyers wish they had a second chance: report

Two-thirds of first-time buyers in the province admit they’re worried about affording their home if interest rates go up, the survey found.

. . .

New mortgage rules were brought in last month that shorten the maximum amortization to 25 years from 30, which was expected to deter some first-time homebuyers, although that doesn’t appear to be the case. Although sales are slowing in Vancouver, The Sun reported earlier this month that the Real Estate Board of Greater Vancouver’s president Eugen Klein said the decline appears to be caused by a drop off in investment buyers, and not declining numbers of first-time buyers.

Chart of Rate from Bloomberg Five year bond rates have been climbing recently but they are still rock bottom.

The original report is here

Home ownership takes a major financial commitment beyond the down payment and monthly mortgage payment. Many first time buyers admit they overlooked some of the additional costs: 29% say they didn’t budget for on-going costs such as maintenance and utilities, 13% overlooked some of the one-time fees associated with buying a home, such as inspection fees and land transfer costs, and 6% didn’t budget for anything beyond the down payment and monthly mortgage payment.

More than half of first time home buyers with a mortgage (55%) said they were worried about affording their home if interest rates increase.

No idea how the article above go 2/3 out of 55%

Hat tip: Dimitri Tishchenko commenting at VREAA