The Unassuming Economist

On cross-country:

• Our cities house-price index suggests the property market is slowing – Economist
• Global House Price Index – Economist
• Planning rules are driving the global housing crisis – Financial Times
• Opinion today: Demented by the housing crisis: Simply comparing the number of households to dwellings gives a foolishly misleading idea – Financial Times

On the US:

• Our Shrinking Supply of Low-Cost Rental Units – Joint Center for Housing Studies
• Who Owns a Home in America, in 12 Charts – Citylab
• Does Homeownership Influence Political Behavior? Evidence from Administrative Data – Stanford University
• The effects of housing supply restrictions on partisan geography – Political Geography
• Redfin doubling down on direct home buying, plans expansion of Redfin Now – HousingWire
• Housing market has hit a ‘significant slowdown’ in recent weeks, Redfin CEO says – MarketWatch
• New housing construction doesn’t fuel SF evictions, claims report – Curbed
• Hosing Homebuyers: Why Cities Should Not Pay For Water and Wastewater Infrastructure with Development Charges – D. Howe Institute
• Seattle’s Socialist City Council Member Thinks Housing Is a Human Right—Unless it Comes at the Expense of Music Venues – Reason
• Highest Share of Homeowners Likely to Move in Q3 2018 in Chicago, DC, Orlando, Tampa, Atlanta – ATTOM

On other countries:

• [China] China’s new home price growth hits two-year high as small cities boom – Reuters
• [Germany] Creating Permanent Housing Affordability: Lessons From German Cooperative Housing Models – Urban Institute
• [New Zealand] New Zealand bans sales of homes to foreigners – BBC
• [Singapore] Singapore Home Prices Won’t Pop Without More Migrants – Bloomberg

Photo by Aliis Sinisalu

From the EIU report:

“The results of the Global Liveability Index 2018 reveal that Vienna has displaced Melbourne as the world’s most liveable city. This ends a record seven consecutive years at the head of the survey for the Australian city.

This year’s Index also finds an improvement in the scores of the top-ranked cities, reflecting improvements in safety and stability across most regions. Other key findings include:

• Canadian cities outperform cities in the United States, with three Canadian cities making this year’s top ten
• Manchester, Paris and Copenhagen have seen the biggest ranking improvements among western European cities over the past year
• Osaka and Tokyo have climbed up the ranking to enter to top 10 for the first time”

On cross-country:

• Housing Policy and the Changing Tenure Mix – National Institute of Economic Review
• A Tale of Two Countries: Comparing the US and Chinese Housing Markets – The Journal of Real Estate Finance and Economics

On the US:

• Both renters and homeowners could benefit from better housing policy – Brookings
• Will The Mortgage Market Impact The Midterm Elections? – Forbes
• Pricey Housing Markets in West Are Cooling Off Most Quickly – Wall Street Journal
• America’s Housing Crisis Is Forcing More People To Live In Vehicles – Huffington Post

On other countries:

• [Canada] Housing market dynamics and macroprudential policies – Bank of Canada
• [India] Too slow for the urban march: Litigations and real estate market in Mumbai – Brookings
• [Netherlands] The Big Problem With Investing in Amsterdam’s Hot Housing Market – Bloomberg
• [United Arab Emirates] Dubai Builder Sees Property Slump Lasting for Years – Bloomberg
• [United Kingdom] History dependence in the housing market – Bank of England

Photo by Aliis Sinisalu

From the IMF’s latest report on Hungary:

“Hungarian housing prices have increased rapidly since 2014, but from a low level. House prices began to increase in the Budapest area, but have spread to other cities and more recently to municipalities. According to the MNB’s and European Systemic Risk Board’s (data for the latter are as of Q3 2017) estimates, average prices are not yet excessively overpriced compared to fundamentals. The number of transactions has begun to stabilize, possibly due to labor shortages and increasing construction costs, which, according to market observers, frequently delay the completion of new dwellings by 6–12 months.

The housing boom has been driven by many factors other than credit. Delayed purchases following the global financial crisis as well as fiscal initiatives have contributed to the boom. For instance, (i) young families committed to have three or more children can receive a grant and a subsidized loan to purchase a home; and (ii) the VAT rate on sales of certain new dwellings has been temporarily reduced from 27 to 5 percent during the 2016–2019 period. Moreover, low interest rates have made real estate investments more attractive. The MNB’s mortgage bond purchase program may have further supported the market. Finally, the MNB-certified consumer friendly housing loans introduced in 2017, has helped level the playing field, lowered borrowing costs, and encouraged fixed-rate lending. The stock of loans for house purchases increased by 6.8 percent (y-o-y) in May 2018. Nevertheless, according to market observers, only about 45 percent of transactions involve borrowings. Moreover, household debt in Hungary remains low compared to peers. It is also almost completely denominated in local currency, but a substantial share remains variable-rate loans.

The MNB has preventatively tightened macroprudential policies, but the booming housing market needs to be closely monitored. The various macroprudential measures seem to be working, as only about 20 percent of new lending have variable-rates or a fixed rate up to one year. Already in 2016, the calculation of the payment-to-income (PTI) ratio was changed to not discourage fixed-rate borrowing. In April 2017, the mortgage funding adequacy ratio (MFAR) was introduced to encourage banks to issue longer mortgage bonds. These ratios will be further refined to discourage interest rate risk for households in October 2018, while there are no plans thus far to change the loan-to-value ratios. However, given the fact that the boom thus far has mostly been driven by strong disposable income and fiscal incentives rather than credit and low interest rates, there is also a need to review these fiscal incentives as well as supply constraints that appear to be contributing to the boom.”

On cross-country:

• Housing, Debt and the Economy: a Tale of Two Countries – University of Oxford
• The End of the Global Housing Boom – Bloomberg
• Housing Costs and Regional Income Inequality in China and the U.S. – Federal Reserve Bank of St. Louis
• Charlemagne: the backlash against Airbnb – Economist
• ¿Es posible alquilar en la ciudad sin dejarse el sueldo en ello? – GQ
• Prime price growth drift lower across global cities – Knight Frank

On the US:

• The Scar From Which The Construction Workforce Has Yet To Recover – BuildZoom, Wall Street Journal
• Eyes Wide Shut? The Moral Hazard of Mortgage Insurers during the Housing Boom – NBER
• What is driving America’s housing crisis? A long-read Q&A with Lynn Fisher – American Enterprise Institute
• Fixing Public Housing: A Day Inside a $32 Billion Problem – New York Times
• Blackstone Makes First Bet on Manufactured Housing – Blackstone
• The Urbanist Case for Trailer Parks – CityLab
• The U.S. Housing Market Looks Headed for Its Worst Slowdown in Years – Bloomberg
• A Greater Share of Rentals Are Out of Reach for Blacks, Hispanics – Zillow
• Buying a Home Is Less Affordable Than It’s Been in Almost a Decade – Zillow
• Homeownership Aspirations: The Enduring & Evolving American Dream – Zillow
• Non-Resident Foreigners Sell for Twice Median U.S. Home Value – Zillow
• When Rent Growth Signals Stability, Not Stress – Zillow
• The Real Reasons Millennials Are Struggling to Become Homeowners – Zillow
• Housing’s Headwinds Are Getting Stiffer – Bloomberg
• Nation’s housing market may be headed for biggest slowdown in years – Seattle Times
• As Affordable Housing Crisis Grows, HUD Sits on the Sidelines – New York Times
• MLS Information Sharing Intensity and Housing Market Outcomes – The Journal of Real Estate Finance and Economics
• New York City Sues Airbnb to Force Compliance With Subpoena – Bloomberg
• Best Neighborhoods for Real Estate Buying and Investing – ATTOM

On other countries:

• [Australia] Australia House Prices Fall the Most in 7 Years – Bloomberg
• [Canada] Canada Risks Creating ‘A Permanent Generation Of Middle-Class Renters’: Industry Group – Huffington Post
• [China] China Toughens Housing Policy as Shenzhen Imposes More Curbs – Bloomberg
• [Poland] Disequilibrium in the real estate market: Evidence from Poland – Land Use Policy

Photo by Aliis Sinisalu