In Case You Thought Our Bubble Was Due To Special Local Factors…

“Johan and Alejandra are the kind of Swedes the IMF has been warning about – piling up debt to keep up with an ever-rising property market and fund a lifestyle of travel, maids and nights out.
The couple plan to buy a flat in Stockholm for 5 to 6 million Swedish crowns ($724,000 to $869,000), initially with an interest-only bank loan, among other spending plans.
“I may travel, I may want to invest in a new business,” said Alejandra, who runs a cafe in the city centre.
Less than a month away from a general election, there are no votes in campaigning to stop the credit flowing, but there are fears that such Swedes could be the Achilles heel of a country that boasts a coveted AAA score from credit rating agencies Fitch and S&P.
Four in 10 mortgage borrowers in Sweden are not paying off their debt, and those that are repaying the principal do so at a rate that would on average take nearly a century.
Swedish property prices have nearly tripled in just two decades. In July, home prices rose at a double-digit pace from a year ago – the first time in more than four years.”

– from ‘Swedish household debt soars as poll nears’, CNBC, 24 Aug 2014

“In the capital the latest full-year figures show that the average wage is £39,920, while the average house price is about £400,000.
Prices are therefore 10 times greater than wages.
But in South Buckinghamshire, in towns like Amersham and Beaconsfield, the average home is worth 20 times as much as the annual local salary.
Outside the South East, the place where houses are least affordable is the Cotswolds, where they cost 19 times wages.
The countryside may be scenic, but that is little compensation when the average worker, putting a third of his or her salary into a mortgage, would need over 60 years to pay it off.” …
“”I shall be disappointed if I only get £550,000 for it,” says Mike Golding, as he shows me into a two-bedroom, first-floor flat he is selling. It has no garden, few proper windows, and no view to speak of.
But such prices are not excessive in Stow on the Wold, a pretty market town in the Cotswolds, where the undersupply of affordable housing is matched only by the oversupply of Barbour jackets, local organic brie and bow-windowed tea shops.
One such tea shop is run by Anna Wright and her mother.
She and her boyfriend have been looking for a house to buy, but, faced with prices like the above, they have given up looking in Stow.
“We have been priced out of the market,” she says.
“You are privileged to grow up in the Cotswolds, but there’s never an expectation of buying a house here,” she tells me.
A few doors down, 21-year-old shop worker Nicola O’Driscoll is in the same position.
She has been forced to look for a flat in Cheltenham, no less than 18 miles away.
“It’s really unfair. I feel like they don’t want youngsters to live around here. Because there’s no way they can,” she says.

– from ‘The 62 areas where houses are less affordable than London’, BBC, 18 Aug 2014

Too-cheap money has caused many speculative bubbles in housing, and perverted the relationship between income and housing prices. – vreaa

25 responses to “In Case You Thought Our Bubble Was Due To Special Local Factors…

  1. Yeah, but it’s special there…..


    • next stop is vcc

      I really do wonder what sort of “Water, Mountains and a Border on three sides/best place on earth/HAM” equivalent arguments people use in those other part of the world to justify why housing has gotten so expensive.

  2. CanuckDownUnder

    These interest-only loans are quite the rage. Only 35% of Australian mortgages are interest-only but with 43.2% of new loans going this way we’ll get there soon enough!

  3. Come on people!
    I know these are the lazy hazy days of summer.
    But I’m sure there must be some juicy Vancouver RE anecdotes that you may wanna share.
    This blog has become waaay toooo serious.
    I’m predicting a hot fall market, with many sellers who’ve been sitting on the sidelines joining the fray.
    The new slogan will be: “Sell now or be left holding the bag forever”.

    • In the interests of Levity&RevolutionaryAccordionists everywhere… we are pleased to temporarily interrupt VREAA’s regular programming with a brief clip from our CairoBureau:

    • UBCghettodweller

      Welp, there are quite a number of properties in Point Grey South of 4th ave that were put up for sale in the spring, for sale signs came down in june, and now they’re back up. I’m not sure if that’s vreaa worthy though. Never seen that many properties get re-listed before though.

  4. It’s not fair, but OTOH I was never drafted.

  5. It seems there are many Best Places on Earth. I propose Vancouver step it up to Best Place in Universe.

  6. Vancouver is going in the same direction for years. I mean we are people who live in the first world, we should not be complaining. But when you realize what is happening to us, we will sooner be on the same level as people from India. Housing is a terrible business, which has to be regulated way more in the future…

  7. Find out how you can protect yourself and avoid the wrath of Tai Sui, Grand Duke, Three Sha, year breaker, 3 killings, Sui Po, Three Killings and all other Feng Shui Annual afflictions in the year of the Yang Wood Horse (Jia Wu) in 2014…

  8. Virgin Atlantic dumps Vancouver in favor of Detroit

    business in vancouver..

    but but but…. the Motor City never had a winter olympics like the marijuana city ….

  9. Breaking news…

    BC Govt folds in summer long dispute with BCTF due to (1) mounting pressures from Chinese Gov’t (as per Patti Bachus) and (2) a potential conflict with Christy Clark’s holiday schedule.

    As expected, just the same old nonsense we have been accustomed to seeing time and time again.

    Most importantly, it IS all about RE all the time in this town (in case anyone thought otherwise)

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