Bubbles around the world

[Ragnarök_62]

Let's start out with a doozy:

http://www.news.com.au Wrote:

WANNABE property investors now have another option for getting a toehold in the booming Sydney property market. A new company is selling houses just one brick at a time.
There’s no need to attend a single open inspection or auction, pay stamp duty, or deal directly with tenants.
And you can do it all in 10 minutes, online, and sell whenever you want.
The BrickX investment scheme which launched officially today is billed as Australia’s first stock exchange for residential property, offering part ownership via buying single ‘bricks’, which start at $67, under a system called ‘fractional ownership”.
While it’s open to anyone, since it’s soft launch a month ago, the bulk of the earliest stakeholders are those in the under-34 year old age group.
BrickX CEO Anthony Millet said it’s early days, but the investor breakdown so far indicates 60 per cent of those buying in are in that age group: the one most likely to be feeling frustrated at not having the funds to get a foothold in the market.
Alyssa Raymundo, 20, of Blacktown, is one of them.
She graduated from university last year, is now working full time and can’t afford to move out of her parents’ home “anytime soon” and had no idea how to get into the market,.
“I just know that if I want to, I have to start now”.
She found out about BrickX via a Google search.
“I’m a first-time investor and I had no idea really about the whole housing market or investing and I had no idea how to go about it,” she said.

Alyssa Raymundo Googled ‘first homebuyer’ and ‘investment property’ and ended up buying her first bricks. Picture: SuppliedSource:Supplied
Like any tech-savvy 20-year-old worth her salt, she typed “first homebuyer” and “investment property” into a Google search, and BrickX came up in one of the results.
Her investment in three bricks — costing a total of about $300 in two properties in Mosman and Annandale — was completed online, and while it’s modest to say the least, she says it’s a start as she tries to get the feel of the market.
“I am saving for an investment property — I wasn’t to own my own, and this is a start,” she said.
“I just got out of university so I don’t really have a stable savings account — there are things like car payments and a uni loan to take care of, so this was a way to put just a little bit away.”
“I’m not expecting a huge return. To me it is a set and forget kind of thing, I’ll buy some more bricks when I can and it’s a way of learning about the market. So it’s a learning curve and savings account as much as anything,” she said.
BrickX works by buying a property, then splitting it into 10,000 ‘bricks’. Prospective investors can go onto their website to check out the properties (currently there are five, including in Sydneys Enmore, Mosman and as of last week, Double Bay, and Melbourne’s Prahan, and the aim is to have 100).
“We provide as much information as we can to empower investors to choose what they want to buy into,” said Millet.
Bricks start at less than $100. Investors can buy and sell whenever they like, and can own up to a maximum of five per cent of any single property’s bricks.
Investors get a proportional share of any monthly net rental income.

One of BrickX’s first properties was this sone in Parriwi Road, Mosman. Picture: SuppliedSource:Supplied
Until recently the scheme was open only for wholesale investors under the Corporations Act, but has now received approval from ASIC to open to regular “mum and dad investors”.
As for BrickX’s cut: “When you buy in you pay 1.75 per cent and when you sell you pay 1.75 per cent,” said Millet.
“There are no funds under manage. The only other expenses are the specific expenses that would relate to any standard property. like strata, water, council rates etc, and these are administered before investors get their dividend.”
“We also revalue the bricks every six months so people can follow what us happening with their capital returns.”
The scheme was inspired by crowd-funding models, with the aim of tackling what have become the biggest hurdles to buying into property: Affordability, big initial costs, loan requirements, exit and commission costs and long investment periods.
Asked why would-be owners wouldn’t just keep saving a deposit or invest in shares, Millet said “without comparing this to shares, I wouldn’t say whether this is any better or worse. they’re just different”.
“This can provide a way for investors to get their foot on the ladder, to it could be an interesting tool for saving a deposit because you are investing in line with there housing market.
“We have a mix of investors from first-timers dipping into the water and getting comfortable with investing to the sophisticated investors who are putting in larger amounts and enjoy the ease of getting into this without the traditional hassles of investment properties.
“What this does is it doesn’t over-complicate things. you invest where when and how much time you want to invest for.”

That makes S California look sane, man.

[Ragnarök_62]

Speaking of SO Cal.  , well here's one.    

Dr.  Housing Bubble Wrote:uying a home without seeing a property in person is like marrying a person by only viewing their Tinder profile.  But house horny people are ready to hump away their savings and lock into a 30-year mortgage matrimony.  It is a bit surprising but not all that shocking that nearly one in five home buyers are making offers on homes without even viewing a property, according to new research.  When bidding wars ensue and rental Armageddon is all the rage, buying a crap shack may seem like the most reasonable decision.  And the psychology behind this is interesting.  People will spend hours debating what restaurant to go to on Yelp but are itching to buy a home without even seeing it?  This is the manic market we are living in.  And in the Bay Area, things continue to get nuttier.  The Full House home recently sold for a nice amount of money.  Given the occupations of the fictional inhabitants, they would likely live in tents behind a tech incubator instead of that place.

Bidding with a blindfold
What you find as well is many foreigners are buying homes without viewing the place.  Take a look at the research:

Quote:“(Redfin) While Jason’s story may seem unusual, new survey data shows that 19 percent of people who bought or sold a home in the past year made a bid on a home before viewing it in person. The survey of more than 2,000 who bought or sold a home in the past year was conducted by SurveyMonkey Audience and commissioned by Redfin. A similar survey conducted last year found that 21 percent of recent homebuyers had made offers sight unseen.
Buyers of high-end homes were almost twice as likely to have made offers on homes sight unseen. Thirty-nine percent of people who bought homes for more than $750,000 made offers without seeing homes in person.”

$750,000 will get you a crap shack in many parts of SoCal and the Bay Area.  It isn’t surprising though that 39 percent of “high-end” crap shacks are making bids, sight unseen.  Just go to some of the areas targeted by foreign money and they’ll bus people in, largely from China.  And the data aligns with the above:

I suppose if you are buying a new million dollar home, what is the need to view the place?  But this is certainly atypical of your regular buyer, especially those overpaying for shoddy construction and homes that are in mediocre markets.  But of course, everything in SoCal is prime.
Fuller House Prices
Remember the show Full House?  Well the home sold in August:

The place sold for more than $4.1 million and has some serious renovation work done:

But based on their jobs, it is very unlikely that they would be able to afford this place today.  Then again, income doesn’t matter.  They could easily go for a PoppyLoan and go zero down.  Maybe they can do a zero down loan and buy sight unseen.  Why not right?  After all, the show is back on Netflix.  The old is new again.

Man, Eric's sitting on a gold mine.  I think he should sell now and high tail it to Leadville. Co.

[pbrower2a]

...And what happens when there is no further buyer?

Here's my suspicion: some countries are getting scarier than most of us believe. China may be a prime example: its authoritarian regime may have kept the lid on dissent for about 25 years, but it has solved none of its political problems. China has fostered an internal bubble to divert people from political reality; it has diverted people from political distress with a speculative boom. I have seen some of the 'cities of the future' that yet to have population; the only way in which those places get settled is if overseas Chinese must relocate due to persecution.

But the reverse has happened, too: Chinese citizens connected to the political and economic elite might have a revolution to fear, with nasty consequences for themselves if they should not get out fast enough. The United States is the epitome of political stability.