This week’s news: Adult kids living at home is perfectly natural — and a troubling sign

The price of real estate is far too high for a young adult in 2017, and staying at home with their parents seems like the most viable solution.
The price of real estate has proven far too high for the average young adult in 2017, and many find themselves staying at home with their parents.

Toronto

Adult kids living at home is perfectly natural — and a troubling sign (Toronto Star)

This month, Washington Post writer Jonathan Coppage made a statement that surprised no one: “Kids are living with their parents longer.” But Coppage took this idea one step further into territory few are willing to go.

“It’s a good thing” that adult kids are living with parents longer, he argues. Kids and parents can pool their resources, and mark life’s milestones together. Not only is it a good thing, he writes: “it’s downright natural.” Why? “Historical data suggests that the wholly independent nuclear-family household may be the aberration — that patterns of close familial support are the more natural arrangement.”

Toronto’s luxury condo sales surge despite market, Sotheby’s International says (CBC News)

Greater Toronto Area home sales may have hit a slump but a new report suggests Toronto’s luxury condominiums are being gobbled up faster than ever by wealthy buyers willing to shell out over $1 million for apartments in the sky.

Brad Henderson, president and CEO at Sotheby’s International Realty, says there are different subsets of buyers responsible for the 98 per cent spike in luxury condo sales.

‘Correction’ to soften Toronto home prices: Report (Toronto Star)

One of the country’s biggest real estate companies is predicting an 18.5 per cent year-end price increase in the Toronto housing market this year, compared to a 13.8 per cent national year-over-year rise.

Given the significant gains of the first half of 2017, the company expects a year-end home price average of $862,264, up from $837,232 at the end of the second quarter.

Canada

Uninsured mortgages biggest risk for Canadian financial institutions, DBRS warns (Financial Post)

Uninsured mortgages, a new target of federal regulators, represent the greatest risk to the financial industry, especially Canada’s largest banks, according to a report out Monday from DBRS Inc.

The credit ratings agency says about 46 per cent of total mortgages in Canada are now uninsured with the big six banks holding 32 percentage points of that total. Credit unions have eight percentage points and six percentage points are held by small to medium-sized institutions, including mortgage investment corporations.

Bank of Canada hikes key interest rate to 0.75%; next increase could be in October (Global News)

The Bank of Canada has hiked its benchmark interest rate to 0.75 per cent from 0.5 per cent, its first increase in nearly seven years, amid expectations of stronger economic growth this year.

Such a move is bound to increase the costs of mortgages, home equity lines of credit and other loans linked to the big bank prime rates.

Increased interest rates could mean higher Vancouver rental prices, expert says (CBC News)

The Bank of Canada has raised its key interest rate to 0.75 per cent from 0.5 per cent, which could lead to more people looking to rent rather than own in Metro Vancouver, says a University of British Columbia economist.

The Bank of Canada’s move affects those with debt and also makes it likely consumers will pay more for variable-rate mortgages and lines of credit.

USA

Renewing tenants can save money by staying put in the US, new analysis suggests (Property Wire)

Renewing a residential tenancy lease instead of moving to a new home can mean major savings for renters in the United States, new research shows.

Those who moved in the past year paid an average of $3,946 or $329 per month more in 2015 on rent than renters who stayed in the same property for the past five or more years, according to an analysis of official rental data from real estate firm Zillow.

New Homeowners Are Strong Boost to Overall U.S. Economy (World Property Journal)

According to new consumer spending analysis from the National Association of Home Builders, newly minted homeowners are helping drive a healthy U.S. economy. In their first year of ownership, new home buyers spend about $10,601 on appliances, furnishings and home improvement projects – 2.6 times as much as other home owners in a typical year.

NAHB economists studied the U.S. Bureau of Labor Statistics Consumer Expenditure Survey to help quantify the wave of activity – and cash – spent to install new refrigerators, buy couches and make other improvements as new owners personalize their homes.

Pending home sales fall again in the US, plagued by lack of supply (Property Wire)

Supply shortages that are propping up home prices in many metro areas in the United States but pending property sales fell in May for a third month in a row, the latest index shows.

The pending home sales index, a forward looking indicator based on contract signings from the National Association of Realtors, fell by 0.8% and is now 1.7% below a year ago, which marks the second straight annual decline and the most recent since November and December of last year.

International

UK is top for wealthy individual global commercial real estate investors (Property Wire)

The UK is the top country that private property investors are most likely to buy commercial real estate as more and more wealthy people consider it as an investment asset.

Overall private investors are already a strong presence in the commercial market and as a result are becoming an increasingly important force in the global real estate marketplace, according to the latest report from Knight Frank.

Hong Kong’s Stamp duty is beating the wrong heads and does nothing to lower property prices (South China Morning Post)

Let’s get rid of one misperception right away – this business of “and from abroad”, which has so many people believing that it is foreign speculators who are driving prices up.

In a letter to the editor barely two months ago, the Principle Assistant Secretary for Transport & Housing, Joyce Kok, in a vain boast of victory over speculators, made it plain that she cannot blame foreigners.

Home approvals and building activity falls in Australia (Property Wire)

The number of home approvals in Australia fell by 1.9% in May 2017, having fallen for three months in a row to 18% below the peak of May 2016, the latest official data shows.

Approvals fell by 8.2% in the Australian Capital Territory, by 3.9% in Victoria, by 3.7% in Western Australia and by 2.6% in New South Wales, according to the figures from the Australian Bureau of Statistics (ABS).

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