The economic miracle in China has led to the creation of many ‘fake’ replica cities; Paris, London, Jackson Hole, etc. Despite features like a 1/3 replica of the Eiffel Tower, a modified Tower Bridge and Route 66 these ‘duplitecture’ cities are missing something according to this piece over at ABC Nightline.
Is it Joie de vivre? Culture? or simply population? Apparently if you build it, they won’t necessarily come right away.
Tianducheng, or “Sky Capital City,” is a real estate development modeled after the city of lights, right down to a version of the Eiffel Tower that is one-third the height of the real one.
“I think [it’s] a little strange,” Rachel Ni, who moved to Tianducheng six years ago, told ABC News’ “Nightline.” “I don’t like it here.”
Unlike the real Paris, laundry hangs in full view everywhere in Tianducheng, even on trees, and the fountains are dry. Many apartments are empty, and few stores are even open for business.
“I live here because it’s cheap. In Hangzhou, this is very, very cheap,” said Ni. “The environment is good, especially for the baby.”
Is it jealously that made ABC find a negative angle on this? Replica theme park cities sound great, think of the savings on travel budget! Just imagine if we could have a replica Interlaken in Stanley park, a tiny NYC on the east side or Honolulu in Poco… Read the full article and view the video here.
Mark Carney (why does that name sound familiar?), The Current Head of the Bank of England is speaking out against negative interest rates.
While defending ‘monetary stimulus’ he points out that negative interest rates haven’t done much to improve economies and is instead a game of hot potato where everyone loses:
So negative interest rates are effective in only one way: via the exchange rate – or as he says, “via beggar-thy-neighbor” – which might be “an attractive route to boost activity” for an individual country. “But for the world as a whole,” this “transfer of demand weakness elsewhere is ultimately a zero sum game.
Read the full article over at business insider.
Every so often it’s fun to play a game of compare and despair with the price of Vancouver real estate.
Buzzfeed has just discovered this and posted a list of 9 castles that cost less than a Vancouver condo.
I’m betting none of those castles is walking distance to a coffee shop.
Channel 4 in London has done an experiment on estate agent reactions to potential buyers using obviously ill-gotten gains. The results were predictable:
In a documentary called From Russia With Cash, to be broadcast on Wednesday, two undercover reporters pose as an unscrupulous Russian government official called “Boris” and his mistress “Nastya” whom he wants to purchase an upmarket property in London for.
The couple – Russian anti-corruption campaigner Roman Borisovich and Ukrainian investigative reporter Natalia Sedletska – view five properties ranging in price from £3m to £15m, on the market with five different west London agents, in Kensington, Chelsea and Notting Hill.
Despite being made aware they are dealing with ill-gotten gains, the estate agents agree to continue with a potential purchase. In several instances the estate agents recommend law firms to help a buyer hide his identity.
One estate agent names a “very, very good lawyer … the last person I put them was another minister of a previous Soviet state” in a deal worth £10m.
The estate agents suggest that in the capital secretive purchases of multimillion pound houses are common. One claims that 80% or more of his transactions are with international, overseas-based buyers and “50 or 60%” of them are conducted in “various stages of anonymity … whether it be through a company or an offshore trust”.
Read the full article here.
The term ‘Dutch Disease‘ refers to an increase in natural resource based economy crowding out manufacturing and other sectors. It’s also a stand in descriptor for taking all your winnings in a booming market and re-investing them in the same market.
When Oil prices were high, both the province of Alberta and the country of Norway benefited from a petroleum based economy, but they approached the future in different ways.
Brian Ripley over at CHPC summarizes Bruce Campbells take-away of the differences between these two economies approach to oil wealth:
Alberta’s so called “progressive” conservative governments; 7 consecutive iterations since 1971, have squandered their provincial energy resources leaving their treasury with a CAD 12 billion dollar debt and a 500 million dollar deficit.
Norway, a county of 5.2 million people (Alberta’s population is similar at 4.2 million), began their first successful North Sea oil drilling in 1971 and by maintaining sovereign control and creating partnerships with the private sector “… now sits on top of a CAD ONE TRILLION DOLLAR pension fund established in 1990 to invest the returns of oil and gas. The capital has been invested in over 9,000 companies worldwide including over 200 in Canada. IT IS NOW THE LARGEST SOVEREIGN WEALTH FUND IN THE WORLD”
Read the full article over at CHPC.
After housing markets slumped around the globe governments and central banks did what they could to reinflate them, driving down the cost of debt.
Well it worked.
The US market is down a bit from their precrash highs, but Canada is sailing high. What’s the endgame?
With global monetary conditions so loose, governments are using regulatory tools to cool overheated housing markets. In Canada, for example, the maximum term of the riskiest mortgages has been lowered from 40 to 25 years. Regulators in both Hong Kong and Singapore have repeatedly raised stamp duties and tightened lending restrictions. The measures seem finally to be working, especially in Singapore, where prices are now falling.
So as potential home buyer on planet earth, what’s your next move? Do you go with low interest rates forever as a way to keep prices up, or do you stand back and wait for a price correction?
As an aside its interesting to note one nation whose market isn’t doing so well is Japan, where they’ve had rock bottom interest rates for a really long time.
Did you know you could buy nine mansions in France for the price of one boarded up Vancouver tear down?
Of course you might have to live in closer proximity to fresh baked croissants if you choose the French route, but at least one of them comes with 400 acres of land which should give you some buffer if you find that scent offensive.
PriceyPads ran this comparison and includes some beautiful pictures in their post.
Of course this is Vancouver so that’s an ‘asking price’, which may or may not bear some some relation to reality.
Just like craigslist rents, sometimes we get carried away with our asking prices.
You might remember the story of the extremely expensive listing in West Van with pictures of an imaginary house in the listing.
The asking price on that one was just south of $38 million. That was the asking price. The selling price was a bit less, well nearly $30 million less actually.
Are empty homes bad for a city?
Some people think so, and in parts of London they’ve decided to heavily tax owners of empty property:
Camden council, a Labour-run authority in north London, which covers Primrose Hill, wants to charge owners of homes that have been empty for more than two years double the normal council tax in a bid to return vacant properties to use.
The scheme has already had some impact, with owners of empty properties being charged 50 per cent extra, but the council has now suggested a further increase could bring back almost 200 homes to use. Since the council introduced a 50 per cent extra charge last year, the number of long term empty houses has fallen from 248 to 162.
Read the full article over at the Telegraph.
Spain is the latest real estate bubble country to consider giving extra residency privileges to foreigners who buy property.
If they go ahead with this plan they would join Portugal, Hungary and Ireland.
Greece is also considering a similar measure.
The Spanish proposal is the cheapest so far, requiring only a $200k real estate purchase:
The Spanish government is considering offering residency to foreigners who buy property worth about $200,000 or more. With discounts as deep as 50% along the Mediterranean, a 1,100-square-foot three-bedroom beachfront apartment in Alicante goes for $130,000. Or how about a 1,200-square-foot four-bedroom with a view of Barcelona’s skyline for $175,000? A few miles inland, a two-bedroom house goes for $90,000.
The idea is to attract buyers for an estimated 700,000 empty homes scattered across Spain’s landscape, the remnants of the nation’s dramatic housing boom-and-bust. The offer is aimed at Chinese, Russians and Americans, who are usually limited to a three-month tourist visa in most parts of Europe.
Full article in the LA Times.