
China’s Covid Zero Policy Is an Anchor on Commodities Prices
Industrial commodities prices in China have regained some of their poise after Shanghai issued a road map for opening up and the central bank cut interest rates on long-term loans.
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Industrial commodities prices in China have regained some of their poise after Shanghai issued a road map for opening up and the central bank cut interest rates on long-term loans.
Get ready for a fresh slump in the world’s most-watched stock index, as economic growth fears spiral and the Federal Reserve embarks on its biggest policy-tightening campaign in decades.
Asking prices for UK homes rose to a new record for a fourth-straight month, though there are signs the market is starting to ease.
Hong Kong is counting on a former cop to address its growing list of headaches. Just don’t expect the new leader to solve the housing crisis -- even though Beijing has blamed the problem for social unrest, analysts say.
Hisayuki “Deko” Idekoba isn’t really impressed by his own first-year results as chief executive officer of Japan’s Recruit Holdings Co., owner of the world’s top job finder.
Dec 18, 2018
Bloomberg News
,After a three-year non-stop party, Toronto’s condo market is likely to settle down in 2019, some of the city’s biggest developers say.
“I can’t, for a minute, imagine that we’re going to continue to see the increases that we’ve experienced,” said Jim Ritchie, executive vice president of sales and marketing at Tridel. “Do I think there’s still room for growth? Yes, but not what we’ve seen in the past three years.”
Ritchie joined representatives from Menkes Developments Ltd., CentreCourt Inc. and Diamond Kilmer Developments for a round table discussion at Bloomberg’s Toronto offices on the outlook for the city’s condo market last week. Together, the closely held companies have built more than 100,000 condo units, including Menkes’ Harbour Plaza and Tridel’s Ten York by the waterfront.
Toronto condo prices have surged 50 per cent in the past three years to a record high of $570,764 in September, according to research firm Urbanation Inc. The segment soared amid the housing frenzy in the first half of 2017. While price gains have eased since then, they remain buoyant compared with the single-home segment which has been hit by harsher mortgage lending rules and rising interest rates.
“We have hit the peak and I think prices will probably stay flat, for, I would even say the next two years,” said Jane Renwick, vice president of marketing and sales at Diamond Kilmer Developments, a joint venture between Diamond Corp. and Kilmer Brownfield Equity Fund. The group is developing its first project of about 250,000 square feet of housing in mid-rise condos and townhouses that will include a mix of market and affordable units.
Shamez Virani, president at CentreCourt, added: “There is, for the first time in a little while, at least in the last 24 months, signs of resistance, signs of certain projects not being able to break barriers on pricing.”
Additional condo cancellations are also likely due to rising construction costs that could offset revenue from presales and pressure margins, the developers said. Costs have increased across the board, including steel, due to tariffs, labor, municipal charges and land.
This year, 15 buildings with more than 4,500 units have been canceled, Urbanation said. That compares with 1,678 for 2017 and 379 for 2016.
“We’ve seen cost inflation in the construction space being in the range of 10 percent this past year, which is something we hadn’t seen previously,” Virani said. “The theme of 2019 is about protecting your market, about ensuring that you’re really being thoughtful about the timing and the allocation of costs, and selling and building in the same market environment so you don’t get caught in that situation where you’re forced to cancel a project.”
While the developers may be cautious short-term, all are confident that prices will continue to rise longer term due to supply constraints and Toronto’s growth prospects. Gross domestic product in the city of 2.8 million people has been running at about 3.4 per cent for the past three years, above its population growth of 1.6 per cent, according to a city report.
Jared Menkes, executive vice president of high-rise residential at Menkes Developments was unwavering for the future. “There’s a lot of red tape that’s slowing down bringing more product to market,” Menkes said. “I promise you, pricing is going up.”
Below are additional insights on what to expect in 2019:
Jared Menkes on condo sales outlook in 2019:
Shamez Virani on shift to suburbs:
Jim Ritchie on condo price growth opportunities
Jane Renwick on affordable housing