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Have to wonder how much of this is occupant-driven vs how much is foreign speculation (like Chinese investment in the Canadian property market). That prices ar

Have to wonder how much of this is occupant-driven vs how much is foreign speculation (like Chinese investment in the Canadian property market). That prices are getting so out-of-whack relative to local incomes in so many places suggests some sort of international aspect...

phatfish 10y ago
Oh there absolutely is. In London we welcome anyone with cash to offload, no questions asked. There is plenty of building going on in London, none of which will help anyone on an average wage. It's simply about money. The government loves it because they get a nice payout from stamp duty, estate agents love it because they get to close £1,000,000+ sales, the foreign buyers love it because they can offshore their assets. The only people who don't love it is everyone else.
sprafa 10y ago
I keep wondering whether negative interest rates and QE have made real estate a very attractive purchase for international investors. I'm trying to track down evidence that asset managers have started moving "safe money" investment in that direction to get higher returns than they do from Treasury etc. Which is where that money used to park. It's too widespread of a problem at this point. lisbon, porto, london and Berlin and many other cities like Vancouver are seeing prices explode.
- kjksf 10y ago
  Presumably those boogeyman foreign investors are rich enough to buy in cash so interest rates have no bearing on their decisions, especially US interest rates. It's not like Chinese peasants get million dollar loans to buy a property in London or that Russian walks into Wells Fargo and gets million dollar loan for a house, even if he's rich in Russia.
Tiktaalik 10y ago
It's likely investor driven, foreign or otherwise. Toronto for example is in the midst of an incredible real estate bubble, but a professor found that there's more than enough supply being created to keep up with population growth. The problem is extra demand from speculation. http://www.theglobeandmail.com/real-estate/toronto/demand-fuels-toronto-house-prices-not-lack-of-supply-study-finds/article34279980/ http://www.theglobeandmail.com/real-estate/toronto/demand-fu...

phatfish 10y ago

Oh there absolutely is. In London we welcome anyone with cash to offload, no questions asked. There is plenty of building going on in London, none of which will help anyone on an average wage. It's simply about money. The government loves it because they get a nice payout from stamp duty, estate agents love it because they get to close £1,000,000+ sales, the foreign buyers love it because they can offshore their assets. The only people who don't love it is everyone else.

sprafa 10y ago

I keep wondering whether negative interest rates and QE have made real estate a very attractive purchase for international investors. I'm trying to track down evidence that asset managers have started moving "safe money" investment in that direction to get higher returns than they do from Treasury etc. Which is where that money used to park. It's too widespread of a problem at this point. lisbon, porto, london and Berlin and many other cities like Vancouver are seeing prices explode.

kjksf 10y ago
Presumably those boogeyman foreign investors are rich enough to buy in cash so interest rates have no bearing on their decisions, especially US interest rates. It's not like Chinese peasants get million dollar loans to buy a property in London or that Russian walks into Wells Fargo and gets million dollar loan for a house, even if he's rich in Russia.

Tiktaalik 10y ago

It's likely investor driven, foreign or otherwise. Toronto for example is in the midst of an incredible real estate bubble, but a professor found that there's more than enough supply being created to keep up with population growth. The problem is extra demand from speculation. http://www.theglobeandmail.com/real-estate/toronto/demand-fuels-toronto-house-prices-not-lack-of-supply-study-finds/article34279980/ http://www.theglobeandmail.com/real-estate/toronto/demand-fu...