The Animal Spirits in North America
The release of the latest S&P case Shiller Home price index caught my eye because of the 34-36% increase in the U.S. real estate market (prices) since the last major bottom in 2012.
It's a big move all right, but just to make the perspective a bit sharper, the Vancouver single family detached house market has prices zooming nearly 41% in a similar time period.
Ellen's Got Real Estate Tips
More Humour From British Columbia
“...it is great news that the premier is looking at measures to improve affordability. Just a few months ago, Christy Clark (Liberal Premier of BC) told CTV that if people are concerned about housing affordability they should move to Fort St. John or Prince Rupert,” he (David Eby, NDP housing critic) said. “It is a sign to me that the pressure we are putting on them is working.”
But the premier also blamed local governments for contributing to the high cost of new housing and said they can do more to cool the market.
“Local governments, city halls, load in some cases over $100,000 per unit in taxes and charges on to every single new home. There is a lot local government can do to reduce the cost of new homes by reducing the taxes and fees they levy on them,” she told reporters.
That’s a hollow argument, according to Geoff Meggs (chair of Vancouver’s finance committee), who said there is no evidence that fees the city charges developers for required community services are to blame.
“I think the price of housing is set by the marketplace. And if we reduce our (community amenity contributions) there will be increased profits to the developer but the price won’t come down,” he said. “The private sector does not operate on a charity basis, so if there is money from the sale of a house they will take that as a return on investment, not dutifully pass it back to the taxpayer to reduce the cost of housing.”
The value of credit today is make-believe and not a result of a free market.
ITEM: Canadian banks earn $96 million a day in 2015, TheStar.com December 3, 2015.
I would say that's a happy charity.