Liquidity Is Also Causing Global Real Estate Prices To Rip

Hangzhou city in China. The government has banned the sale of new houses there. No turning around in Hangzhou … [+] The massive liquidity and historically low interest rates are fueling a global market for property sellers.

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It’s not just about low interest rates and low inventory levels, it’s about global liquidity.

That means if you thought buying a home was a major prepandemic and you felt expensive, they have done absolutely nothing for you in the past few months. It’s a sellers’ market. Not just in Florida and Massachusetts, but in most of the world.

I have a friend who is renting a house in Panama. And while Panama has always been pretty expensive because it’s dollars, the two bedroom rent was twice my mortgage.

My brother is looking for a house in Massachusetts. I went with him a few days ago to watch an open house. There were at least five couples waiting to check it out. The realtor tells me it will cost at least $ 25,000 and it was less than 1,000 square feet and the master bedroom had no bathroom and … no closet! What is it, New York City? Tokyo? San Francisco?

In a world of liquidity and bitcoin riches, everyone is currently buying real estate just to keep their money somewhere. Many of the buyers are second home investors.

Low inventory levels here and elsewhere are also driving rents up at exactly the wrong time.

“In Sao Paolo, rental apartment prices rose by an average of 3%, the largest increase over the previous year in almost five years,” said Oleksiy Lubinsky, CEO of Rentberry, in an email.

Last month, on the Rentberry website, the average rent for a studio apartment in New York – locked down and faced with protests that recently ended – rose 8% to $ 2,150. The average rent for a one-bedroom apartment in a city where nothing happens rose 6% to $ 2,490.

Rentberry, real estate prices, housing market, sellers market

Ukrainian entrepreneur Oleksiy Lubinsky is the CEO of Rentberry. He says house prices and rents … [+] Not only rising in the US It’s a global phenomenon almost everywhere.

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“Miami has also seen a predominantly upward trend in the rental market,” says Lubinksy, adding that one-bedroom rental is up 2.3%. Overall, rents in Miami continue to rise, making the city the eighth most expensive rental property, according to Rentberry. The site is like a global rental and residential / commercial property search engine worldwide.

If you wanted to know, the rent in St. Petersburg has increased by 8.7%. No more masks. It is now like the Florida of Russia in terms of the look of its real estate market and its attitude towards SARS2.

Here at home, property prices have risen during the pandemic. That’s fine for those looking for or selling equity loans. It has helped raise people’s wealth to record highs as housing construction is always an integral part of an American’s core wealth. All of this points to a strong economic recovery in 2021, but it’s not a good sign for renters and home hunters whose price is set.

According to the National Association of Realtors, the price of the average single-family home in the US has increased a little more than 15% in less than 12 months.

“A typical 2020 homeowner, as a homeowner alone, would have amassed around $ 24,000 in home ownership,” said Dr. Lawrence Yun, senior economist with the National Association of Realtors, quoted by ABC News last week.

Worldwide demand is booming due to low interest rates. That’s another thing that drives prices up.

No house flipping in China

According to the subscription service of Caixin Global, a Chinese daily newspaper, people in several major Chinese cities signed more leases than usual during the New Year break.

The total number of leases in 18 cities reached a six-year high.

Average monthly rents in cities rose to 61.7 yuan ($ 9.53) per square meter, up 6% from the previous week. The 18 cities include the country’s four largest municipalities – Beijing, Shanghai, Tianjin, and Chongqing.

Some Chinese cities are taking restrictive measures to combat property speculation in the face of soaring property prices. People have so much money that they don’t know where to put it other than in the third and fourth houses.

The housing authorities in the east Chinese city of Hangzhou banned new residential property buyers from selling within five years. Despite a number of restrictions, house prices in China started at record highs in 2021.

In Brazil, the residential property market has rebounded over the past four years due to low interest rates for home buyers. As a result, according to a report from Imeri Capital, builders have successfully entered the capital markets for resources that are now being deployed in new homes that are focused on the upper-middle segment of southeastern Brazil.

Haute Living and Ulysse Nardin celebrate World Cup Champion Blaise Matuidi at 57 Ocean Miami

Maskless in Florida. Thousands of people move to Florida every month to avoid higher taxes and taxes … [+] higher costs in the northeastern US. The trend is driving property prices to record highs. Footballer Blaise Matuidi in Miami on February 20, 2021. (Photo by Romain Maurice / Getty Images for Haute Living)

Getty Images for Haute Living

I actually want to go shopping in the southern state of Santa Catarina. Brazil is great right now for expats and foreigners looking for tropical vacation homes. You can buy half a million dollars in real estate for less than $ 150,000. To do this, however, you need to speak the language and deal with the local brokers and sellers, otherwise you will be soaked in “gringo prices”.

Unprecedented low inflation and interest rates provide real estate investors with a macro backdrop that favors real assets. The real estate markets have recovered faster than the rental markets, even in heavily affected economies such as Brazil, but have not yet reached a peak. Cap rate spreads remain high despite the economic slowdown and restrictions in Brazil and elsewhere.

One of the biggest highlights in the opposite direction was India. They have been hardest hit by the pandemic and their real estate market has performed poorly.

Property sales in India’s eight largest cities fell 54% year-over-year to a decade-low, according to Knight Frank. The number of newly built homes in these cities also fell by 46% to 60,489 units, although this is now gaining traction. These numbers from Knight Frank are from July. I suspect India will turn the corner and join the party.

If you are looking for a location in Mumbai, Rentberry has a 2,390 square foot 3 bedroom, 3 bath home.

I’m taking Les Pelicans in Miami for half the price. On the other hand, it’s half the size.

Forbes real estate agent Ellen Paris says the past few months have been like Groundhog Day for real estate.

US home price growth ended 2020 at the fastest pace in eight years. The results round off the record year for the real estate market, which despite the pandemic Amanda Fung of Yahoo! Finance reported on February 23.

S&P CoreLogic Case-Shiller’s national property price index rose 10.4% year over year in December and 9.5% year over year. The 20-City Composite rose 10.1% in December from 9.2% in November. That exceeded the consensus estimates.

Rentberrys Lubinksy says that when you look out the window of their San Francisco offices, it’s the old, tired tale of Silicon Valley wealth that prices the riff raff.

“The steady increase in technician incomes is key to an overall surge in house prices and sales in the Bay Area,” he says. “Based on the data we have, we forecast house price growth of 5% in the US in 2021. The correlation between the strong stock market and the sustained rise in house prices is currently a global phenomenon,” says Lubinksy.

For example, global real estate investors looking for rental properties will provide the same liquidity to prime real estate in countries across America, making it difficult for new families to buy a home as price spikes are endless. A stronger dollar will help American buyers, but that window could be closing in Brazil and elsewhere. And even though it’s coming to an end, I don’t expect the Brazilian currency, for example, to rise to four to one anytime soon. It’s still trading above 5.30 against the dollar.