Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Gold & Silver Begin New Advancing Cycle Phase - 6th May 21
Vaccine Economic Boom and Bust - 6th May 21
USDX, Gold Miners: The Lion and the Jackals - 6th May 21
What If You Turn Off Your PC During Windows Update? Stuck on Automatic Repair Nightmare! - 6th May 21
4 Insurance Policies You Should Consider Buying - 6th May 21
Fed Taper Smoke and Mirrors - 5th May 21
Global Economic Recovery 2021 and the Dark Legacies of Smoot-Hawley - 5th May 21
Utility Stocks Continue To Rally – Sending A Warning Signal Yet? - 5th May 21
ROIMAX Trading Platform Review - 5th May 21
Gas and Electricity Price Trends so far in 2021 for the United Kingdom - 5th May 21
Crypto Bubble Mania Free Money GPU Mining With NiceHash Continues... - 4th May 21
Stock Market SPX Short-term Correction - 4th May 21
Gold & Silver Wait Their Turn to Ride the Inflationary Wave - 4th May 21
Gold Can’t Wait to Fall – Even Without USDX’s Help - 4th May 21
Stock Market Investor Psychology: Here are 2 Rare Traits Now on Display - 4th May 21
Sheffield Peoples Referendum May 6th Local Elections 2021 - Vote for Committee Decision's or Dictatorship - 4th May 21
AlphaLive Brings Out Latest Trading App for Android - 4th May 21
India Covid-19 Apocalypse Heralds Catastrophe for Pakistan & Bangladesh, Covid in Italy August 2019! - 3rd May 21
Why Ryzen PBO Overclock is Better than ALL Core Under Volting - 5950x, 5900x, 5800x, 5600x Despite Benchmarks - 3rd May 21
MMT: Medieval Monetary Theory - 3rd May 21
Magical Flowering Budgies Bird of Paradise Indoor Grape Vine Flying Fun in VR 3D 180 UK - 3rd May 21
Last Chance to GET FREE Money Crypto Mining with Your Desktop PC - 2nd May 21
Will Powell Lull Gold Bulls to Sweet Sleep? - 2nd May 21
Stock Market Enough Consolidation Already! - 2nd May 21
Inflation or Deflation? (Not a silly question…) - 2nd May 21
What Are The Requirements For Applying For A Payday Loan Online? - 2nd May 21
How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part1 - 1st May 21
INDIA COVID APOCALYPSE - 1st May 21
Are Technicals Pointing to New Gold Price Rally? - 1st May 21
US Dollar Index: Subtle Changes, Remarkable Outcomes - 1st May 21
Stock Market Correction Time Window - 30th Apr 21
Stock Market "Fastest Jump Since 2007": How Leveraged Investors are Courting "Doom" - 30th Apr 21
Three Reasons Why Waiting for "Cheaper Silver" Doesn't Make Cents - 30th Apr 21
Want To Invest In US Real Estate Market But Don’t Have The Down Payment? - 30th Apr 21
King Zuckerberg Tech Companies to Set up their own Governments! - 29th Apr 21
Silver Price Enters Acceleration Phase - 29th Apr 21
Financial Stocks Sector Appears Ready To Run Higher - 29th Apr 21
Stock Market Leverage Reaches New All-Time Highs As The Excess Phase Rally Continues - 29th Apr 21
Get Ready for the Fourth U.S. Central Bank - 29th Apr 21
Gold Mining Stock: Were Upswings Just an Exhausting Sprint? - 29th Apr 21
AI Tech Stocks Lead the Bull Market Charge - 28th Apr 21
AMD Ryzen Overclocking Guide - 5900x, 5950x, 5600x PPT, TDC, EDC, How to Best Settings Beyond PBO - 28th Apr 21
Stocks Bear Market / Crash Indicator - 28th Apr 21
No Upsetting the Apple Cart in Stocks or Gold - 28th Apr 21
Is The Covaids Insanity Actually Getting Worse? - 28th Apr 21
Dogecoin to the Moon! The Signs are Everywhere, but few will Heed them - 28th Apr 21
SPX Indicators Flashing Stock Market Caution - 28th Apr 21
Gold Prices – Don’t Get Too Excited - 28th Apr 21
6 Challenges Contract Managers Face When Handling Contractual Agreements - 28th Apr 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Looking at Real Estate Prices in Major World Cities

Housing-Market / US Housing Apr 07, 2018 - 05:16 PM GMT

By: Harry_Dent

Housing-Market £593,369 – the average price of a house in London in January! (That’s about $829,000.)

$1 million plus – what 400 square foot condos go for in Vancouver!

$1.5 million – the cost of a median house in San Francisco!

$20 million – for a 2,000-square foot penthouse condo with a view of Central Park!

Who the hell can afford prices like these?


And the situation isn’t much improved in the less glitzy suburbs. Home prices have increased twice as fast as income growth.

It can’t, and won’t, go on like this for much longer.

In my five-city tour in Australia in February, I kept asking the audiences: Why do you think super-high real estate prices are good for your economy? After all, it raises the costs of office space and salaries for businesses. It forces households to spend more of their incomes on mortgages and rents, leaving less for everything else.

In a recent poll, 49% of adults said they would never be able to afford a home in Australia.

How can that be a good thing?!

Aging Baby Boomers are sitting on their real estate to milk every last drop of price appreciation out of it that they can (keeping inventory off the market in the process). And Millennials can’t afford to buy what homes are available.

Who is more important to our future? Rising workers or retiring and dying people?

Here’s how kooky it’s gotten out there…

There are 66 square foot “closet” condos – I’m talking starter homes – in cities like Hong Kong and Shenzhen in China. That’s basically a bed and a toilet… or a prison cell!

Is Hong Kong so great it’s worth living in that small a space??

I was there earlier this year and I say NO!

A few years ago, I was in Vancouver – my favorite city in North America. It’s also the favorite city for the affluent Chinese who are busy laundering their money out of China into major English-speaking cities around the world.

Not long ago, the trend was to pay $1 million for a 400 sq. ft. condo. That’s got to be $1.2 million plus by now. That means an everyday, young person or couple must pay $3,000 per square foot to get a small studio with only enough room for a fold down bed!

Is Vancouver that great?!

Luxury condos in Manhattan now typically cost $3,000 to $4,000 a sq. ft.

While hunkering down after Hurricane Maria, we saw a 560-sq. ft. apartment that was renting for $4,000!

560 sq. ft.

That’s smaller than a comfortable two car garage.

In fact, that’s less than half a volleyball court!

And people are paying $4,000 a month to rent that!!

That’s insane!

Then there’s San Francisco, home to the biggest real estate bubble in the U.S. thanks to foreign buyers and Silicon Valley. There the median house is going for $1.5 million. The median 2-bedroom apartment costs $3,040 per sq. ft.

Mark my words: something’s got to give.

And it may already have started…

Prices are slowing or backing off on the high end. Hot markets have gone from $10 million plus to $5 million plus. Manhattan condo sales have plummeted to a six-year low. The biggest drops are in the high-end townhouses that foreign buyers most prefer.

The number of landlords offering incentives on leases rose from 25% in August 2017 to 50% in December as the number of new leases dropped from 7,500 to 4,200.

In January, house prices in London fell 2.6% year-over-year, while the posh, centrally-located Wandsworth borough fell 14.9%. That’s the fastest rate of decline since the financial crisis.

And in the fourth quarter of 2017, San Francisco lost more people than any city in America.

Forty-nine percent said they could consider moving out of that $1.5 million median home. It would take a $303,000 annual income with a $300,000 (20%) down payment to afford that.

How many people have that kind of income, even in high-income San Francisco?

Only 12% of residents can now afford that.

When does the bubble end, when only 1% can afford the median home?

This is nuts and simply not sustainable. And the cracks are starting to show in the high end of most major markets.

The next real estate crash will be the opposite of the last one where it started at the low-end with subprime defaults. This one will work from the super overvalued high-end and work its way down to Homer Simpson.

Harry

http://economyandmarkets.com

Follow me on Twitter @HarryDentjr

Harry studied economics in college in the ’70s, but found it vague and inconclusive. He became so disillusioned by the state of the profession that he turned his back on it. Instead, he threw himself into the burgeoning New Science of Finance, which married economic research and market research and encompassed identifying and studying demographic trends, business cycles, consumers’ purchasing power and many, many other trends that empowered him to forecast economic and market changes.

Copyright © 2018 Harry Dent- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Harry Dent Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in