Daily Real Estate News - Home Source for Canadians

Canada’s Own "Subprime" Borrowing Slapped In The Face

July 10, 2008 – 11:20 pm
CALGARY REAL ESTATE BUBBLE BLOG I don't have much time to blog but I'd like to just quickly put up a post regarding today's news. This might be redundant, as most of you have already heard (in the MSM or on other blogs), the federal government is tightening mortgage lending practices. A slap on the face, if you will. Not extreme but it is certainly a step in the right direction.According to the Finance Department announcement, the following changes will be made to the rules of government guaranteed mortgages:Fixing the maximum amortization period for new government-backed mortgages to 35 years;Requiring a minimum down payment of 5% for new government-backed mortgages;45% maximum TDS ratio (Total debt service ratio - % of gross annual income required to cover payments associated with housing and all other debts and obligations, such as car loans and credit cards)Establishing a consistent 620 minimum credit score requirement; ...

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Canada Wakes up….Is it too late?

July 10, 2008 – 11:20 pm
Alberta Bubble As posted in the comments section(h/t to bad) and noted at other places, the Canadian government has finally woken up and is trying to do away with the 40 year mortgages, as well as the zero down mortgages that are backed by the government (via CMHC and others). They'll also enforce more rigorous documentation standards.They specifically mention that this is being done to "reduce the risk of a U.S.-style housing bubble developing in Canada." If you ever wanted a classic example of reactionary measure taken by bureaucrats, this could be it. The time to do this was in 2005 and 2006 when the mad rush was already reaching its zenith in Alberta and BC. Or even in 2007 when the frenzy was near its peak in Saskatoon/Regina. But in 2006, they were cheer leading the 'affordability paradigm' and passing laws to provide 40 year mortgages with zero ...

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Marketing Synergy

July 10, 2008 – 11:19 pm
Alberta Real Estate Watch The city of Edmonton teaming up with Rohit, Landmark and the Edmonton Journal to build and market townhouses for stretched wage earners in a program called First Place Edmonton. The prices aren't terribly cheap at $266,710 for a two bedroom townhouse in Millwoods. The land is valued by the city at $30,000-35,000 so Rohit could end up with $235,000 to build the structure of a two bedroom 906sqft townhouse with no garage and an unfenced yard. In the same area of Millwoods some townhouse prices appears to be competitive to these values. For Example:This townhouse is fairly close to the development in Greenview. It is built in 1989 but unlike the City of Edmonton/Rohit townhouse it has an attached garage and a third bathroom. It has quite a bit more space (1345 vs 906 sqft) for a similar asking ...

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New Money Laundering Regulations - How It Affects You

July 10, 2008 – 11:19 pm
FindCalgary.com Blog New changes were introduced on June 23rd to the federal money-laundering legislation that is administered through FINTRAC.  This will affect how real estate transactions are conducted in Canada. Can I see some ID please? The most notable ammendment that will affect the public is that now, whether buying or selling, Realtors are required to ID their customers, keep identification records and report regularly to FINTRAC. Why do I have to show ID now when I’ve never had to before? Real estate offices are now required by law to ask for ID.  By providing this information when requested, you will ensure that financial institutions and others (including myself) can meet their legal obligation, and “support the fight against money laundering and terrorist financing.”  Types of ID Permitted The following types of ID can be used: Birth certificate, driver’s licence, passport, record of landing, permanent resident card or other similar document, Alberta health card.   The document must have ...

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Breaking News - No More Zero Down, 40 Year Mortgages

July 10, 2008 – 11:19 pm
Edmonton Real Estate Blog We interrupt the current programming to bring you this breaking news.  According to CTV news the Federal government is making significant changes to some controversial lending protocols in Canada.  The main change is the elimination of the 40 year amortization, the second amounts to the elimination of O% down mortgages being eligible for mortgage insurance. To be completely honest this has sideswiped me somewhat as I was not even aware these changes were being contemplated.  My first thought is right policy, wrong timing.  My second thought is what impact will this have? Apparently, according to CTV, the impetus for this is to prevent a U.S. style melt down.   If that’s their motive for these changes then Its probably too late. I personally like the changes, I'm just a little uncertain as to the timing - why wasn’t it sooner in the year when the housing cycle was beginning its ...

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Letter To The Editor

July 7, 2008 – 6:51 pm
CALGARY REAL ESTATE BUBBLE BLOG Recently, CREB released it's June summary package for the city of Calgary. In conjunction, Mario Toneguzzi released his June housing report.********RE: "Calgary home sales continue decline, prices hold steady," July 2, 2008Dear Editor,I am disappointed at Mario's inability to gather facts with prudent responsibility concerning accuracy of information. Provided that he writes articles where information is disseminated to the masses, journalistic integrity should be of utmost priority. This should be done to circumvent further financial entrapment of unprepared, unqualified and uneducated home buyers. The article does not challenge the facts presented by an association that's main goal is to market the real estate market in an eternal positive light for only one reason, profit. It would have been deemed more efficient and similar in purpose if Ed Jensen had wrote the article himself.CALGARY - Calgary's residential real estate market in the first half of this year ...

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Fairy Tales

July 7, 2008 – 6:51 pm
Alberta Real Estate Watch The first tale is that of "stabilizing prices" as described in the Calgary Herald article Calgary home sales continue decline, prices hold steadyCalgary's residential real estate market in the first half of this year has been marked by declining sales, increasing listings and stabilizing average sale prices compared with a year ago.Stabilizing is present tense and indicates that prices are continuing to stabilize. Taking a year-to-date average of prices 2008 is comparable to 2007:And the average sale price in both markets is close to a year ago - up by 0.20 per cent for single-family homes ($472,163) and down by 0.76 per cent for condos ($312,460), according to statistics released by the Calgary Real Estate Board on Wednesday.However looking closer look at the trend prices are decreasing compared to a year ago not stabilizing. From CREB statsYOY Average price change:Jan: SFH +5.18% condo +8.33%Jun: ...

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Buyer’s Guide: Condo Documents, Get Them Reviewed!

July 7, 2008 – 6:51 pm
FindCalgary.com Blog When purchasing a condo, it’s as though you’re buying into a business or corporation.  If you were planning on purchasing a business, you would do your due diligence and find out everything you can about the company.    What is its income?  How much are the operating expenses?   Are there any upcoming large expenditures?  Any pending lawsuits?  The same applies to buying a condominium. When purchasing your condo, along with your Property Inspection, it’s important to get the Condo Documents professionally reviewed. The review of the Condo Documents is actually an automatic condition of sale when purchasing a condo in Alberta.   This provides the buyer an opportunity to review the following documents: (The seller needs to provide the following documents to the buyer before conditions can be waived.  If you are thinking of selling, make sure you have the following documents, or request them from your Property Management Co.) —– 1. Copy of bylaws of the corporation 2. ...

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Just How Does MLS.ca Work?

July 7, 2008 – 6:51 pm
Edmonton Real Estate Blog Occassionally we get phone calls from home owners asking why their home doesn't have photos on MLS.ca, or why their listng doesn't have the same information as another in their area - apparently some people think WE are the MLS! I can assure you we are not the MLS, we are just a small brokerage in West Edmonton. That being said, we do have a very good understanding of how the MLS works and would like to clarify a few things. First off, MLS.ca has just been replaced by Realtor.ca! The old URL will still work but it will redirect you to the new site. There are some significant improvements on the new site, including interactive, searchable maps - yes, you can now search by map! You can also search by address and MLS number and more. But just how does your listing in little old Edmonton ...

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Weekly Update on the Edmonton Real Estate Market

July 7, 2008 – 6:51 pm
Edmonton Real Estate Blog Here is our update on the Edmonton real estate market. (Previous week's numbers are in brackets). For the past 7 days: New listings: 550 (558, 686, 627)# Sales: 273 (321, 310, 257)Ratio: 50% (58%, 45%, 41%)# Price changes: 522 (563, 693, 628)# Expired Listings: 787 (72, 74, 202)# Canceled/withdrawn/terminated listings: 158 (163, 290, 62)Net loss/gain in listings this week: -668 (2, 12, 106)Active listings for single family homes: 4183 (4457, 4415, 4382)Active listings for condos: 2882 (3094, 3111, 3105) The monthly stats just came out yesterday so I'm going to keep this brief. That's the biggest drop in inventory all year, and the highest number of expired listings. I guess people don't have a big imagination when it comes to expiry dates. I would expect we will see a lot of those come back on the market, but I also am hearing a lot about sellers trying to ...

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Edmonton Real Estate Market: Has Inventory Peaked?

July 7, 2008 – 6:51 pm
Edmonton Real Estate Blog The numbers are out for the Edmonton real estate market for June 2008. You may remember back in April we predicted inventory would peak by June and it looks as though it may have peaked in May. The number of new listings in June was down from May by 7% to 3985 which had more of an impact on inventory than the flat-lining sales: Prices are also holding fairly steady at $341,376: Single family home average prices dropped 0.5% while condo prices rose 0.5% over May, while single family homes are up .25% since the beginning of the year and condos are down 3%. As you can see inventory remains above the normal levels for Edmonton, this means buyers have a lot to choose from and sellers have a lot of competition: So I thought I'd throw in a new chart this month: Supply vs. Demand. A lot of ...

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Calgary - Stampede Lunch List

July 3, 2008 – 1:17 pm
Centuria on the Park Stampede Lunch Website: www.lpdi.ca When: Saturday July 5th, 12pm - 4pm. Notes: Most convenient to park behind the casino in the Impark lot. Please come and enjoy our live music, food beverage, and great company. Waterfront Anthem Properties - Stampede Lunch Website: www.waterfrontcalgary.com When: Wednesday, July 9th, 12pm - 4pm Notes: invitation  BREAKFAST SCHEDULE 2008        Breakfast time 9AM- 11AM. Thursday, July 3rd CBC Annual Stampede Breakfast CBC Building -1724 Westmount Boulevard N.W. 7 AM - 9 AM - Note special time!         Saturday, July 5th Marlborough Mall Memorial Drive and 36th Street    Points West Shopping Center # 200- 5th Ave West  Under the Giant Canadian Flag Cochrane Alberta        Sunday, July 6th Petro Canada Family Fun Day Breakfast Calgary Stampede Grandstand From 7:00 AM - 10:00 AM Admission to Stampede Park -  Free Until 9:00 AM   Monday, July 7th Beddington Town Centre 8120 Beddington Blvd N.W.   North Hill Shopping Centre 1632 14th Ave. N.W.   Tuesday, July 8th Market Mall Shopping Centre Corner of 32 Ave and Shaganappi Tr NW  Westhills Town Centre 300 Stewart Green Way S.W.    Wednesday, July 9th Dalhousie ...

Posted in Calgary | 1 Comment »

Frog and Scorpion - A Realtors true motive

June 30, 2008 – 7:26 pm
Alberta Bubble It is difficult to get a man to understand something when his salary depends upon his not understanding it" - Upton Sinclair And yet, people expect realtors to give a ‘fair’, ‘balanced’ or unbiased perspective on the current market situation. It just can’t happen. It’s not unlike the old fable of Frog and Scorpion. No matter what the ‘realtor’ says, his or her motive is only one- to make the sale. And you can’t blame them. To not sell would mean to go out and look for another calling. So beware of the advice you get from those whose only interest is to sell more houses for commission. On the market front, things are going almost as per the expectations. Demand and supply effect is now showing up in the statistical metrics for prices. Prices have resumed their fall once again, at least in Calgary and in Edmonton condos. Even though ...

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Weekly Update on the Edmonton Real Estate Market

June 30, 2008 – 7:26 pm
Edmonton Real Estate Blog Here is our update on the Edmonton real estate market. (Previous week's numbers are in brackets). For the past 7 days: New listings: 558 (686, 627, 757)# Sales: 321 (310, 257, 280)Ratio: 58% (45%, 41%, 37%)# Price changes: 563 (693, 628, 617)# Expired Listings: 72 (74, 202, 625)# Canceled/withdrawn/terminated listings: 163 (290, 62, 62)Net loss/gain in listings this week: 2 (12, 106, -210)Active listings for single family homes: 4457 (4415, 4382, 4287)Active listings for condos: 3094 (3111, 3105, 3061) Chalk this one up as the best week Edmonton home sellers have seen all year! The most sales and the fewest listings in a week in 2008 adds up to a sales to new listings ratio of 58% which could be the only seller's market we see this year. The question is, is this a blip or has the market pendulum started to swing the other direction? Personally, I ...

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arriVa Welcomes Olives Restaurant - Opening July 4th!

June 26, 2008 – 2:45 pm
As you may have heard, the TORODE Group of Companies have recently increased our commitment to supporting public art in Calgary by commissioning a $1 million sculpture for the flourishing arriVa community. On Thursday June 5th, the successful finalist of the international invitational competition was announced and the winning sculpture concept was unveiled. Entitled “HALF K,” this incredible sculpture is a 500m long metal line drawing by acclaimed Canadian artist Micah Lexier and will be installed September 2009. It will serve as a signature piece for arriVa's residents and as a new landmark for the people of Calgary. Read more on this exciting story here or visit www.arrivacondos.com or www.torode.com. Conceptual design of HALF K by Micah Lexier The winning artist Micah Lexier with Mayor Dave Bronconnier We are also very excited to welcome the newest member of the arriVa community, Olives Restaurant. Olives is the third restaurant to be ...

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$10M Calgary penthouse breaks price record

June 25, 2008 – 10:18 am
Last Updated: Tuesday, June 24, 2008 | 4:48 PM MT CBC News  http://www.astoriaon10th.com/ ~35 storey mixed use condo tower ... A luxury penthouse condo is on the Calgary market for an unprecedented price of $10 million, propelling the city into a lofty real estate realm. The west-facing, two-storey, 4,400-square-foot unit is part of the Astoria on Tenth Tower under construction in Calgary's Beltline neighbourhood. The sticker price makes the 34th- and 35th-floor condo the priciest ever in Alberta and the third most costly in Canada, after listings in Toronto for $25 million and Vancouver for $18 million, Arcus Developments said Tuesday. A second penthouse, which faces east, has already been sold to a private buyer for an undisclosed amount, according to Caren Crisp, the company's marketing and communications manager. "The Astoria on Tenth penthouses are a sign we've arrived as a city," said Gerry Mendyk, president and director of Arcus. "The city's never seen anything like ...

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High Energy Prices and Inflationary Pressures

June 24, 2008 – 11:13 pm
CALGARY REAL ESTATE BUBBLE BLOG Bank Of Canada Jolts Economists With Stand-Pat Rate Decision Amid Inflation Risk"Holt said one possible explanation is that the Bank of Canada and the U.S.Federal Reserve are co-ordinating policy in an effort to bolster the Americandollar and "take the froth" off of commodity prices."Back in March I blogged about Serfdom Life and the continuing risk of interest rate slashing in the US and it's influence on Bank Of Canada to do the same. Times have changed. From the housing bubble evolved the food bubble and now the energy bubble. Some bullish real estate "investors" were in the mindset that in the new financially reformed 21st century, it would be impossible for interest rates increase as we now live in a "credit society." Those who can't realistically afford an object of desire could purchase on credit.In the big picture, the pendulum which swung the way of big ...

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Small Pool of Buyers Remaining

June 24, 2008 – 11:13 pm
CALGARY REAL ESTATE BUBBLE BLOG According to Statistics Canada's 2006 Census of Population and Housing, 73.1% of Albertans own there "dwellings."What does this mean?It translates into the fact that the pool of remaining buyers in Alberta's real estate market is small. During the boom years of 2006 and on, many Albertans were "hyped up" to purchase properties to catch the fad of eternal property appreciation. It was a vacuum phenomenon, pushing home ownership levels to new highs. The real estate marketing machine was huffing and puffing, sucking in all buyers, qualified or not.Now that the market is softening, speculators are in a state of debt shock. For sale signs are sprung up in a weed like fashion to attract potential buyers. The problem is the negative sentiments realised by the public towards home ownership. Reality has set in. House prices do increase forever and ever.With sales already down 30%-50% yoy, and ...

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Here Is What $320k Will Get You

June 24, 2008 – 11:13 pm
CALGARY REAL ESTATE BUBBLE BLOG Real Estate Type : Single FamilyBuilding Type : HouseBedrooms : 1Bathrooms : 1Interior Floor Space : 925.70 sqftStoreys : BungalowBuilt in : 1926Land Size : W:8.840m D:36.580m Shape:RECTitle : FreeholdLocation : 112 9 Av NECalgary, AB T2E 0V2MLS®: C3322995Aren't post grow-op properties supposed to be a good deal?This is more evidence that the Calgary real estate market is out of touch with reality. The seller of this property is looking for $320k for a post grow-op establishment. The house is most likely extensively damaged and is currently being evaluated by the Calgary Health Region. The MLS listing makes reference that the purchase would be more land motivated (even though the lot is in an ambiguous location).It's still astonishing to see the level of denial that still exists in the marketplace. Go to Source

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Bullish Hopes Sputtering

June 24, 2008 – 11:13 pm
CALGARY REAL ESTATE BUBBLE BLOG Chicken soup won't help. Not doom and gloom but rather reality.Calgary inventory at all time record highs (7127 SFH + 3373 Condo), sales/new list ratio in the tank, sales down yoy 30%-50%, median price down yoy, average price down yoy, days on market up yoy.As of May 16, 2008 there are 10500 properties on sale, sacrificial offerings from many financial tight rope walkers who are losing balance. Sellers are in a mixed progression mode from fear, desperation and panic. Capitulation soon to follow this summer when sales are further reduced as stressed out Calgarians partake in $ummer vacation$ and the $tampede. The financial arithmetic no longer computes in purchasing real estate in Calgary, unless the "low ball" technique is engaged. Yet, there are still a few suspended in a perpetual state of denial - hoping."I'm standing my ground on this one. There is no subprime lending ...

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Bold Predictions

June 24, 2008 – 11:13 pm
CALGARY REAL ESTATE BUBBLE BLOG We're almost approaching the midway point of 2008. With the spring rush come and gone, will the following bold predictions hold true till the end of the year?Here is a compilation of predictions for the Calgary real estate market made at the beginning of this year. Keep in mind, some of these predictions seem formulated with an absence of supply-demand economic fundamentals (severely weakened sales and record high inventory)."Jan 30It speaks to the amazing strength of the Calgary economy that in spite of decreased sales and increased inventory, the price is remaining stable, or even rising slightly. If prices stay where they are now, and I fully expect them to, within a +/- 5% range, the buyers will appear. People have been waiting to see what would happen in January and now they know. My phone is busy, and many other realtors I've talked with, ...

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False Sense Of Affordability

June 24, 2008 – 11:13 pm
CALGARY REAL ESTATE BUBBLE BLOG This might be old elementary news, but over the last couple of years during the inflation of the Calgary real estate bubble many home buyers were "tricked" (yes, I dare say it) into affordability.A conventional and financially rational mortgage would follow a 25 year amortization period. A down payment requirement of 25% would be a solid foundation. In addition, a single income stream would the norm.Since February 2006, CHMC has introduced 30, 35 and 40 year mortgages to allow prospective buyers a chance into the real estate market. In conjunction to low interest rates, a well oiled real estate marketing machine, and a booming economy this created the present bubble dynamic.Recently, the essence of 40 year mortgages has been questioned."Canadians are flocking to 40-year mortgages, often without a down payment, and the rapidly developing trend is beginning to ring alarm bells for policy makers in Ottawa.Both ...

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Offending Economists Around The World

June 24, 2008 – 11:13 pm
CALGARY REAL ESTATE BUBBLE BLOG The preceding graphic was the housing market in the US where prices eventually crashed. Early symptoms included a decrease in sales and high inventory levels.Notice the very "shocking" similarities to the trend of the Calgary real estate market. In Calgary, home sales are plummeting 30%-40% YOY. Inventory has risen to all time record highs (~7000 city SFH, ~3200 city condos). By exhibiting the same symtoms, it seems that the Calgary real estate market will suffer the same illness. According to this article, CREA is forecasting the resale market in the province will drop by 18.9 per cent to 57,900 units this year and experience a further five per cent drop in 2009 to 55,000 MLS sales. Interesting to note, the report says the average sale price in Alberta will rise by 4.7 per cent to $373,000 while it will only go up by 2.8 per cent ...

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More Negative Equity On The Horizon

June 24, 2008 – 11:13 pm
CALGARY REAL ESTATE BUBBLE BLOG The much anticipated "spring rush" has been a complete disaster in Calgary's real estate market. This is well documented in the MSM these days. It was during this period that sellers were hoping to unload their anvils of debt to unsuspecting greater fools. The hope and anticipation were met with retreating buyers. In analyzing historical trends, sales should dwindle further during the next coming summer months propagating further price declines.In July 2007 we saw the peak for Calgary SFH market hit an average price of $505,920 and median price of $439,000 (achieved in June 2007). This was followed by months of declining prices. The year ended in December 2007 with an average price of $444,769 and a median price of $406,788. Summer buyers would already owe more on their mortgage loans than the value of their homes. Suffice to say, we may start seeing month-over-month ...

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City Vacancy Rates Jump to 4%

June 24, 2008 – 11:13 pm
CALGARY REAL ESTATE BUBBLE BLOG The once white-hot Calgary real estate market boasted a vacancy rate of 0.5% back in 2006. According to this article, alot has changed in the past 2 years. Inventory has slowly built up to uncontrollable levels and property sales have dissipated. This has resulted in rising vacancy rates in Calgary to as high as 4%. Earlier this month, CHMC had forecasted the vacancy rate to be at 2%. It's currently double the forecasted level. With so much inventory available, the "bitter" renter has more options to choose from.The pendulum is clearly swinging the other way. With vacancy rates much higher than anticipated, many landlords will have to be competitive (ie. lower rents) in order to attract tenants. By lowering rates, their carrying costs are adversely increased with reduced rent revenue. A quick peak at rentfaster.ca/calgary.php will reveal a plethora of rental listings.The augementing vacancy rate is ...

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Inflationary Scenario

June 24, 2008 – 11:13 pm
Alberta Bubble Quite a lot has happened in macro economic world since I wrote the ‘deflationary scenario’. While there are still quite a number of deflationary proponents holding there ground, the mainstream economists and pretty much all the central banks are getting perturbed over rising commodity prices. And for once, their words have some meaning as demonstrated by Bank of Canada holding interest rates steady, increasing the probability of rate increases in future. Just a couple of months ago such a scenario would have been unthinkable amidst all the talk of the global credit crunch. Clearly, Central bankers in Canada, UK and the US are afraid of 1930s style deflation, but they are also not comfortable with the 1970s style stagflation. I guess they are stuck at a Morton’s fork point- raising rates will further worsen the housing market and create problems but keeping status quo will further raise ...

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Back to Fundamentals

June 24, 2008 – 11:13 pm
Alberta Bubble I've been silently watching the "blog drama" that has been going on for the last few days. I really have nothing to say on it, except that everyone should be polite and when not in agreement, respectfully disagreeable.Also, there were some false 'spam flags' on this blog causing it to be locked out. That's why there were no new postings in the last few days. And google blogger takes its own sweet time to manually review the blog(over a week in this case). Perhaps a lot of people clicked on the 'report objectionable' button at the top of this blog! There are may be quite a few people who want this blog to be shut down.Closer to the real topic, inventory is gradually inching upwards while the statistical measures (median, 'special case median' etc) have moved slightly downwards. But bulls are still clinging to their original stories of "we’ve ...

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Okay, the market kind of sucks, but how about some spin!

June 24, 2008 – 11:13 pm
Alberta Bubble If you enjoy the headlines at the realtor sites, you'll probably not like the one I've used.But I guess when your bread and butter depends on making an earnings by selling homes, you've got to master the art of seeing the positive in the sea of negative news.So what if we have inventory that's close to all time high and it's only the end of April.So what if have sales that are amongst the lowest in the last several years.So what if we have the key benchmark price used by EREB and CREB down noticeably since last year.So what if at the peak of buying season we have got dismal sales to new listings ratio.....We will still hold on to our fantastic interpretations of data. Because it suits us.We cannot possibly go on and say with a straight to all the people who bought at the peak last year ...

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Is housing influenza infecting Calgary?

June 24, 2008 – 11:13 pm
Alberta Bubble No, no and No, as per this Calgary Herald article. Of course, MSM is losing its relevance with every passing day and such senseless rehashing of REIC perspective will only hasten their demise.“I don't see a lot of price decline on a year-over-year basis in Calgary. I think we're still a pretty healthy economy and still a pretty healthy housing market," says Legge.By which metric, one has to wonder. Median prices. Down. Average Prices. Down. Median price for condos, down? Pick any metric and it is down YOY.Can they actually find a property that has increased in value since last summer?All I see is a glut of inventory and a lot of reductions in prices.Someone has to tell them that it wasn't the healthy economy that drove prices to stratosphere. It was the worldwide credit bubble abetted by the local tales of 'we are different here' that drove prices ...

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Fantastic Hopes

June 24, 2008 – 11:13 pm
Alberta Bubble Spring is here, at least in the real estate context. But the spring hasn’t quite sprung sales wise. Inventory continues to pile up and the pace of new construction is still frantic. The bulls claim that everything is perfectly fine except for a little ‘inventory problem.’ If only we could get rid of the excessive homes, things will be all fine. This is not unlike the problems in the US. If only they could get rid of excessive inventory in Phoenix, Miami, California and pretty much most of the US, there will not be a housing crisis. But the more fundamental questions are never raised, at least in the ‘bull’ or even realist camps. Why do we have such excessive levels of inventory? Did we over build based on speculator driven demand? Did we build assuming tremendous rises in rent? Did we over build based on an unending supply ...

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