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 Post subject: Re: Ominous signs in Australia
PostPosted: Wed Sep 06, 2017 9:20 am 
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http://www.abc.net.au/news/2017-09-06/g ... 17/8877618

Quote:
The ABS said some of the strongest growth was spending on food, clothing and household furnishings.

But this spending came out of a dramatic decline in the household savings rate, which fell to 4.6 per cent from 5.3 per cent in the March quarter.



Quote:
Australia's economy grew 0.8 per cent in the three months to June, and 1.8 per cent over the past year, according to the official gross domestic product numbers from the Bureau of Statistics.

On the face of it, incomes appeared to rise — "compensation of employees" increased 0.7 per cent in the quarter.

However, that was entirely driven by an increase in employment, with earnings per employee down 0.1 per cent.

The population increase contribution to economic growth was highlighted by per capita GDP growth that was half the headline rate at 0.4 per cent.

There was also a slight decline in nominal GDP growth over the quarter — that is a measure of how much Australia earned for what it produced, not just how much it produced.

This was the result of a fall in commodity prices wiping 6 per cent from Australia's terms of trade
................................
The combination of falling national incomes and strong population growth saw real net national disposable income per capita — the bureau's preferred measure of living standards — plunge 1.4 per cent during the June quarter after five quarters of growth.
.......................

Treasurer Scott Morrison said the Federal Government's infrastructure and defence spending helped boost growth.



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Over the past decade, the Australian economy has grown by 2.5% a year. Per capital growth was just 0.9%

https://twitter.com/CallamPickering/sta ... 04/photo/1


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Quote:
Household savings rate pretty much in freefall now at 4.6% as weak income growth fails to sustain spending

https://twitter.com/IFM_Economist/statu ... 01/photo/1


Real GDP per capita is negative, benefits from increased population is completely gone.
The GDP is based on fiddling numbers where the prelude LNG ship counted in construction figures for the quarter and wasnt amortised as per ABS norm and THEN further to this not counting is on the import figures. The government also boosted spending, unsure as to how sustainable the boosted level is.

From the ABS website:
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Quote:
The Australian economy grew by 0.8% in seasonally adjusted chain volume terms in the June quarter.
Household final consumption expenditure increased 0.7% and government final consumption expenditure increased 1.2%.
Exports of goods and services rose 2.7% for the quarter.
Compensation of employees increased 0.7%.
The terms of trade fell 6.0% in the quarter.

This is where the public expenditure hugely skews the numbers - see South Australia
http://www.abs.gov.au/ausstats/abs@.nsf ... num=&view=

A once off event..............could there be an election soon?


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 Post subject: Re: Ominous signs in Australia
PostPosted: Wed Sep 06, 2017 9:31 am 
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oh and also in the news today:

Quote:
BankWest, a subsidiary of Commonwealth Bank of Australia, is cutting rates for new interest-only property investors but will next month increase interest-only rates for existing investors.

Rates are falling by up to 30 basis points for new investors in September and rising 35 basis points for current interest-only occupier borrowers in October.

Read more: http://www.afr.com/real-estate/cbas-ban ... z4rsy977cI
Follow us: @FinancialReview on Twitter | financialreview on Facebook



Quote:
It comes as lenders roll out their best offers to attract borrowers for the beginning of spring property market sales, traditionally the busiest time of the year for real estate sales.

Lenders are lowering rates, raising loan-to-value ratios, waiving fees and launching lucrative promotional offers in a bid to attract lower risk property buyers, which are typically those with a big deposit, regular income, good credit record and wanting a principal and interest loan.

Westpac Group, which includes Bank of Melbourne, St George and BankSA, has announced it is cutting rates by up to 85 basis points on special promotions and reducing fees on some products.

Others, such as Australia and New Zealand Banking Group, are targeting specific buyers, such as qualified medical practitioners, looking for interest-only investment loans, or wanting to top up existing interest-only investment loans, by halving deposits to 10 per cent.

BankWest is cutting interest-only investment loans despite regulators encouraging principal and interest loans that have borrowers paying down loan principal and lessening financial vulnerability to rate rises.

Read more: http://www.afr.com/real-estate/cbas-ban ... z4rsyNaepE
Follow us: @FinancialReview on Twitter | financialreview on Facebook


:roll: :shock: XX


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 Post subject: Re: Ominous signs in Australia
PostPosted: Wed Sep 06, 2017 12:58 pm 
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https://tradingeconomics.com/australia/personal-savings

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Household spending is growing faster than household income, and has been for five quarters; the longest unsupported boom in spending since before the global financial crisis.

http://www.smh.com.au/business/the-econ ... ybpqu.html


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 Post subject: Re: Ominous signs in Australia
PostPosted: Thu Sep 07, 2017 10:19 pm 
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http://www.dailytelegraph.com.au/news/n ... 6bd6ed3ff5
Quote:
POLICE have established a crime scene in Sydney’s west this morning following a fire in an under-construction luxury apartment block, which damaged four storeys, overnight



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 Post subject: Re: Ominous signs in Australia
PostPosted: Sat Sep 09, 2017 12:23 am 
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Interesting.......talk of increased builder/developer bankruptcies
https://www.propertychat.com.au/communi ... ies.25926/


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 Post subject: Re: Ominous signs in Australia
PostPosted: Mon Sep 11, 2017 5:07 am 
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Quote:
Mortgage fraud: $500b of 'liar loans' in Australia, warns investment bank UBS

Given the average turnover of home loans in Australia, UBS has estimated that around $500 billion worth of outstanding home loans contain misstatements about incomes, assets, existing debts and/or expenses.

With just under $1.7 trillion of mortgage debt outstanding, that means home loans based on inaccurate or fraudulent information account for 29 per cent of the total, and 18 per cent of all private sector debt in Australia.

http://www.abc.net.au/news/2017-09-11/5 ... bs/8892030


Quote:
Pre-auction sales jumped 33 per cent on the weekend to 145 sales up from 109 in the previous week according to Domain.

The most expensive property in Sydney that sold on the weekend sold prior to auction due to the lack of bidders.

Read more: http://www.afr.com/real-estate/more-pro ... z4sLZ4yCit
Follow us: @FinancialReview on Twitter | financialreview on Facebook


Quote:
Seedy sex-for-rent ads highlight affordability crisis

FOR Aussies across the country struggling with skyrocketing rents, these landlords have an offer — but it’s not pretty.

AUSTRALIAN landlords are taking advantage of skyrocketing rents to prey on students, low-income earners and even homeless people by offering “sex for rent” arrangements on popular classifieds sites.


Have a look at the link below, loads of examples like this
Image

http://www.news.com.au/finance/real-est ... 9794ca6111

Billionaire Sydney apartment developer (this guy practically owns Sydney, well a large % of it) Harry Triguboff calls the crash and demands a bailout:
Quote:
The number of new apartments sold had dropped and prices had fallen about 10 per cent over the past six months, the founder of Meriton Group told The Australian.

“The falling prices will have a big impact on the economy,” said Mr Triguboff, who called on the federal and state governments to review their policies on taxing foreign investors and to expand ­policies on accessing superannuation for housing.


Quote:
“The big question is whether the government will allow prices and volumes to go down before they start helping,” Mr Triguboff said.

“Australians could lose an enormous amount of wealth.”

Encouraging people to move to capital cities other than Sydney and Melbourne would help ­affordability and national economic growth.

“People want to live in big cities where there is more opportunity, more variety, more fun,” Mr Triguboff said. But cities like Brisbane needed to attract more people to spur economic growth.


Forgive me if I think this guy is vermin. This is the guy who said that if prices fell that *HE* would simply bring in more migrants.

http://www.theaustralian.com.au/busines ... 274bcf6658

Australians are starting to see the 300,000 or thereabouts inward migration per year for what it is. It is resulting in stagnating wages and a dropping standard of living.

Quote:
Take the national accounts we got for the June quarter last week. We were told the economy grew by 0.8 per cent during the quarter and by 1.8 per cent over the year to June.

Allow for population growth, however, and that drops to 0.4 per cent and a mere 0.2 per cent. So, improvement in living standards over the past financial year was negligible.

Over the past 10 years, more than two-thirds of the growth in real gross domestic product of 28 per cent was accounted for by population growth, with real growth per person of just 9 per cent.

It's a small fact to bear in mind when we compare our economic growth rate with other developed countries'.

We usually do well in that comparison, but rarely admit to ourselves that our population growth is a lot higher than almost all the others.

Our population grew by 1.6 per cent in 2016, and by the same average rate over the five years to June 2016. This was slower than the annual rate of 1.8 per cent over the previous five years, but well up on the 20-year average rate of 1.4 per cent.

So in the past decade we've been relying more heavily on population growth – read, increased immigration – to bolster economic growth and make the improvement in our material prosperity seem greater than it is.


http://www.smh.com.au/business/the-econ ... l#comments


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 Post subject: Re: Ominous signs in Australia
PostPosted: Wed Sep 13, 2017 9:47 am 
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Quote:
More than half the money Australian households spend on goods and services per week goes on basics - on average, $846 out of $1,425 spent – according to the 2015-16 Household Expenditure Survey (HES), released today by the Australian Bureau of Statistics (ABS).

“We can broadly think about household spending as either being for ‘basics’ or for ‘discretionary’ purchases – with basics covering essentials such as housing, food, energy, health care and transport,” ABS Chief Economist, Bruce Hockman said.

Today’s release shows that a growing portion of weekly outlays is spent on basics. Spending on basics accounted for 56 per cent of weekly household spending in 1984, growing to 59 per cent in 2015-16.

“The survey also shows that since 1984, the pattern of household spending has changed considerably,” explained Mr Hockman.

“In 1984, the largest contributors to household spending were food (20 per cent), then transport (16 per cent) and housing (13 per cent).”

"Jump forward to 2015-16, and housing is now the largest contributor (20 per cent), followed by food (17 per cent), and transport costs (15 per cent).”

More recently, since the last survey in 2009-10, the biggest increases in spending on goods and services by households have been in education (44 per cent), household services and operations, such as cleaning products and pest control services (30 per cent), energy (26 per cent), health care (26 per cent) and housing (25 per cent).


http://www.abs.gov.au/ausstats/abs%40.n ... enDocument

Quote:
In the four years between 2003-04 and 2007-08, average weekly household income grew by $213 in real terms to $982. In the following eight years to 2015-16, it grew by only $27 to $1,009.

http://www.abs.gov.au/ausstats/abs%40.n ... enDocument

Not great after a mining boom which only seemed to have generated a property bubble and huge indebtedness in its wake, and potentially terrible considering Australia may yet have a property crash.
Quote:
Perth was one of our most over-indebted capital cities. Over half (55 per cent) of Perth property owners were over-indebted, and owed on average $574,000 per household in property debt.

However, Darwin was the capital city with the highest rate of over-indebtedness among property owners at 69 per cent. Darwin households held on average $581,000 in total property debt.

Sydney and Melbourne had the highest actual number of property owners who were over-indebted. Over-indebted households with a property in Sydney owed an average of $765,000, which was $269,000 more than the average property debt of their Melburnian counterparts.


http://www.abs.gov.au/ausstats/abs@.nsf ... %20Release)~104


The bureau of statistics is on a roll today


Quote:
Food and non-alcoholic beverages were the largest component of household expenditure in 1984, accounting for $19.70 out of every $100 spent on household goods and services. By 2015-16, the largest component of household expenditure was current housing costs, claiming $19.60 of every $100 spent.

Housing costs had the largest actual increase in expenditure since 1984, where it represented $12.80 of every $100 spent by households. Household furnishings and equipment on the other hand had the largest decrease, falling from $7.70 out of every $100 spent in 1984, to $4.10 from every $100 spent in 2015-16.

In terms of relative changes, household expenditure on education more than tripled between 1984 and 2015-16, increasing from 90 cents out of every $100 spent by households in 1984, to $3.10 in 2015-16. By comparison, expenditure on clothing and footwear more than halved, falling from $6.50 out of every $100 spent by households in 1984 to $3.10 of every $100 spent in 2015-16.


http://www.abs.gov.au/ausstats/abs@.nsf ... %20Article)~100


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 Post subject: Re: Ominous signs in Australia
PostPosted: Thu Sep 14, 2017 7:05 am 
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Sentiment has turned...
Quote:
Confidence in Australian real estate has dropped to its weakest level in over 40 years, with just 10.5 per cent of people now seeing property as the wisest place to put savings.

https://www.domain.com.au/news/sentimen ... 13-gygkom/


Quote:
Issuing new loans against unrealised capital gains has created an Australian ‘house of cards’

THIS very common tactic used by investors in Australia could spell big trouble for our mortgage market “house of cards”.

THE Australian mortgage market has “ballooned” due to banks issuing new loans against unrealised capital gains of existing investment properties, creating a $1.7 trillion “house of cards”, a new report warns.


The report, “The Big Rort”, by LF Economics founder Lindsay David, argues Australian banks’ use of “combined loan to value ratio” — less common in other countries — makes it easy for investors to accumulate “multiple properties in a relatively short period of time despite high house prices relative to income”.

“The use of unrealised capital gain (equity) of one property to secure financing to purchase another property in Australia is extreme,” the report says.

“This approach allows lenders to report the cross-collateral security of one property which is then used as collateral against the total loan size to purchase another property. This approach substitutes as a cash deposit.

“This has exacerbated risks in the housing market as little to no cash deposits are used.”

The report describes the system as a “classic mortgage Ponzi finance model”, with newly purchased properties often generating net rental income losses, adversely impacting upon cash flows.

“Profitability is therefore predicated upon ever-rising housing prices,” the report says. “When house prices have fallen in a local market, many borrowers were unable to service the principal on their mortgages when the interest only period expires or are unable to roll over the interest-only period.”


http://www.news.com.au/finance/economy/ ... 730b6ed2c9


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 Post subject: Re: Ominous signs in Australia
PostPosted: Thu Sep 14, 2017 10:55 am 
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so is the crash finally happening or just pockets of Aus such as mining towns?


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 Post subject: Re: Ominous signs in Australia
PostPosted: Thu Sep 14, 2017 12:16 pm 
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TheJackal wrote:
so is the crash finally happening or just pockets of Aus such as mining towns?


At this point only Perth and Darwin are going down. Sentiment across the country has turned. Brisbane will follow (likely already happened but stats will catch up soon when released) these cities as prices have been flat over winter and an apartment glut is about to hit.
http://www.theaustralian.com.au/busines ... a449780f0e
https://www.domain.com.au/news/brisbane ... er-winter/

Auction clearance rates are dropping in Sydney. At this point only Melbourne is looking 'good'.


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 Post subject: Re: Ominous signs in Australia
PostPosted: Tue Sep 19, 2017 4:09 am 
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Quote:
The typical over-indebted household in Sydney is carrying a hefty $765,400 in total property debt
"Growth in debt has outpaced income and asset growth since 2003-04," the bureau said

http://www.smh.com.au/business/the-econ ... ygud6.html


Quote:
Australians' average weekly household income grew by $213 between 2004 and 2008. Since then, it's increased by a total of just $27

http://www.smh.com.au/business/the-econ ... yk1o2.html

2.20pm entry:
Quote:
Melbourne has a tight residential vacancy rate of 1.7 per cent and that will fall lower by 2019 as new housing supply slows due to less investment by local and foreign buyers, SQM Research says.

But while vacancy rates in Melbourne and Sydney (2 per cent) were unchanged in August from July
......................
"Dwelling completions should peak in early 2018. And given the pronounced year-on-year declines in building approvals, we believe rents will likely rise at a faster pace in 2018 than what has been recorded in 2017, thus far. We now have mounting concerns for significant rental shortages in 2019 for Sydney and Melbourne."

Brisbane, already suffering a glut of apartments, also saw a tighter vacancy rate in August, down to 3.1 per cent from 3.3 per cent in July.

Industry group Urban Development Institute of Australia supports the argument of an undersupply. A report it published last month argues that new housing construction estimates based on dwellings approvals numbers regularly overestimate the number of new homes that will actually be created because the development of sites in established areas involves the demolition of at least one existing dwelling.

http://www.smh.com.au/business/markets- ... yjcsv.html


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Quote:
Economists are parsing the ABS housing data out this morning, where Sydney housing prices grew 2.3 per cent in the second quarter, compared to 3 per cent in March.

Overall growth across the capital cities came in at 1.9 per cent in the quarter and 10.2 per cent over the year.

Here's CBA's Michael Workman: There is likely to be a widening gap between price growth for detached houses and apartments. Apartment price growth should be lower given the large amount of new stock coming onto the markets over the next few years. Oversupply issues, for new apartments, are more apparent in parts of Brisbane and Perth than in Melbourne and Sydney.

JPMorgan's Tom Kennedy: This moderation is consistent with the softer tone to Australia's other housing related data (for example, auction clearance rates, building approvals) since the introduction of enhanced macro-prudential measures in late March. While the cycles do not line up perfectly, house price dynamics in Auckland and Sydney have maintained a decent correlation in recent years. Given the RBNZ introduced their most recent round of prudential tightening roughly six months ahead of Australian regulators, there is a case to be made that price dynamics in Sydney and Melbourne will keep cooling in coming months.

Capital Economics' Paul Dales: The 1.9 per cent q/q rise in non-seasonally prices (consensus forecast 1.3 per cent ) meant that the annual growth rate held steady at 10.2 per cent. The 3.0 per cent q/q rise in prices in Melbourne trumped the 2.3 per cent q/q gain in Sydney. These figures are somewhat dated, though, with the more up-to-date CoreLogic series showing that house price inflation slowed further in July and August.

12:53pm entry
http://www.smh.com.au/business/markets- ... yk38d.html


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 Post subject: Re: Ominous signs in Australia
PostPosted: Wed Sep 20, 2017 8:14 am 
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https://www.betashares.com.au/insights/ ... gifQ%3D%3D

Quote:
while national house prices are well above previous peaks as a percent of average after-tax household income, average mortgage servicing costs* remain close to long-run average levels (at least since 2004) – thanks to very low mortgage rates


Image

Quote:
The picture at the capital city level, however, is quite disparate. As seen in the chart below, mortgage servicing costs are already well above average in Sydney, despite today’s low interest rates. Indeed, mortgage servicing costs are now around the previous peak levels in the early 2000s – suggesting affordability constraints might soon start to slow the market even without the RBA needing to lift interest rates.


Image

Quote:
The only other capital city, however, where mortgage servicing costs are currently above average is Melbourne. This suggests other cities appear better placed to withstand higher interest rates over the next few years. In particular, the Perth market already appears to have corrected a long-way following the mining downturn, and seems to offer reasonable value.


Image


Interesting to see the average price to income ratio in Sydney V Perth in the 1990s. I keep hearing how higher denser populations are better for the economy yet in the 1990s Perth was better value for money than Sydney. Maybe I`m simplifying it but I don`t think Manhattan, Central London and Sydney are accessible places to live for the average person. More population is supposed to make public transport more viable but the London tube, New York subway and Paris metro are all subsidised and tickets are not cheap.

Lessons for Dublin?

I digress........back to Aussie house prices....they have boxed themselves into a corner and its hard to see a good result.


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 Post subject: Re: Ominous signs in Australia
PostPosted: Wed Sep 20, 2017 9:48 am 
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Central banker economist says nothing to see here move along

Quote:
Fears an apartment glut will spark a decline in Sydney property prices are overblown, according to a senior Reserve Bank official.

After a long period of under-supply, it was true that growth in the building of new Australian homes had been outpacing population growth, according to the central bank's assistant governor of economics, Luci Ellis.


Quote:
"Similarly, population growth remains fairly strong in Sydney, so it's not clear to me that we end up with a serious problem here."


Quote:
According to Ellis: "Housing and apartment markets have slowed a bit in both Sydney and Melbourne - more so in Sydney than Melbourne - but prices are still rising at a relatively rapid clip nonetheless."

According to a CommSec analysis of the Bureau's data, the median price of houses transacted in Sydney in the June quarter was $1.02 million, $110,000 more than a year ago.

http://www.smh.com.au/business/apartmen ... yldyw.html


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 Post subject: Re: Ominous signs in Australia
PostPosted: Wed Sep 20, 2017 12:14 pm 
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Australian retail sales came in flat in July, according to official data by the ABS, ending a solid recovery in spending during the June quarter.

However, after stalling in July, spending may be about to get significantly worse.

According to the National Australia Bank’s (NAB) Cashless Retail Sales Index, a measure of retail spending by NAB’s customer base, there was a pronounced, broad-based slowdown recorded during August.
...........................
this month’s decline is particularly pronounced.”

..................

retail spending — using cash, cards and online payment portholes — fell heavily during the month.

“Based on movements in the NAB cashless spending index and our data mapping techniques, ABS retail trade is expected to decline by 0.5% in August which would be the weakest monthly growth rate since March 2013,”


https://www.businessinsider.com.au/this ... ust-2017-9

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 Post subject: Re: Ominous signs in Australia
PostPosted: Fri Sep 22, 2017 4:12 am 
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less than a third of the lights are on in the apartments in Melbourne's Docklands. Most shops and restaurants are closed. The only people passing through seem to be on their way elsewhere.

These "ghost towers", as the high-end residential property with three-bedroom apartments costing almost $1 million have been dubbed

Agents say many properties are only temporarily empty, waiting for children to attend university or a family member to be able to move in. They also raise questions of fairness.

"What next?" said Monika Tu, the Sydney-based director of Black Diamondz, which specialises in high end property sales to mainly Chinese buyers. "Shall we tax people who buy new shoes and don't wear them?''

Australia's moves are part of a growing global trend, primarily in response to the massive amounts of capital that have poured out of China and into real estate around the world. Additional taxes targeting vacant homes are already in place in Vancouver and some London boroughs, with Toronto and Dublin mulling similar moves.

In Vancouver, officials have used social media to blast the public with reminders that secondary residences be occupied at least six months of the year or else they'll be subject to the tax, and that they must file declarations in December to determine it. Violators can incur fines of as much as $C10,000 a day.




http://www.smh.com.au/business/property ... ymo2m.html


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