Police in west Michigan handcuffed a real estate agent, his client and that man’s 15-year-old son after a neighbor wrongly reported that the three Black people were breaking into a home.
The agent, Eric Brown, told WOOD-TV that the police response Aug. 1 in Wyoming, including two out of five officers who drew their guns, felt aggressive and “threw me back.”
“I feel pretty anxious, or nervous or maybe even a little bit scared about what do I do to protect myself if I’m going to show a home and the authorities just get called on a whim like that,” Brown said. “Am I just automatically the criminal? Because that’s pretty much how we were treated in that situation.”
The Wyoming Police Department defended the officers’ actions and said they followed protocol for responding to a reported home invasion. The department said in a statement that Chief Kimberly Koster reached out to the three offering to meet with them and any other family members.
Roy Thorne, Brown’s client, called the experience in the Grand Rapids suburb “traumatizing” for him and his son.
The department released body camera footage that shows officers handcuffing them. One of the officers had his weapon out and pointed it at Thorne as he left the home in response to police commands.
Thorne said that officer apologized, “but at the same time, the damage is done.”
“My son was a little disturbed, he hasn’t seen anything like that … he’s not going to forget this,” he said.
The footage also shows police put Thorne in the backseat of a squad car with the door open after handcuffing him.
“Definitely not buying this place,” Thorne says on the video, after explaining that he was visiting the home with his real estate agent.
Brown used his cellphone to show police that he scheduled an appointment online to take Thorne to the house and had an access code to get inside. Thorne’s son was put in the backseat of another squad car briefly before the officer accompanying him was told to uncuff the teenager.
Another Black man with a similar car to the real estate agent’s vehicle was arrested after he went into the house without permission July 24, police said. That person also told police that he was interested in purchasing the house but was not with a real estate agent and didn’t have the homeowner’s permission to go inside.
A neighbor saw Brown’s car parked in front of the house on Aug. 1 and called police, wrongly reporting that the intruder had returned, the statement said. Brown’s car is the same color as that first person’s but a different make and model.
“Somebody dropped the ball somewhere,” one of the officers can be heard saying to another after Brown and Thorne explained why they were at the house.
In markets, being right early is the same as being wrong. Fortunately for FT Alphaville, the same rule doesn’t apply to journalism.
Back in 2018, FT Alphaville took a look at Evergrande — China’s largest property developer — and its ballooning balance sheet, which included 408,000 car parking spaces, a land bank the size of Malta, and a curiously low yield on its rental properties.
Three short years later, Evergrande is facing a liquidity crisis. In a normal economy, this wouldn’t be such a big deal. But in China, where real estate is estimated to account for up to a quarter of GDP, this is slightly more of a concern. It doesn’t help that the property developer also has some $300bn of outstanding obligations to pay. And it’s crunch time: two interest payments on its long-suffering bonds are due Thursday.
So the question now is: how contagious would an Evergrande default be for the global economy? Chinese property stocks have started the week by already taking a battering, with Hong Kong listing Sinic Holdings crashing 87 per cent during trading on Monday, and the bonds of other developers sinking to distressed levels. Via UBS:
European equities this morning are also showing signs of suddern concern, with the FTSE 100 falling 1.6 per cent, and the Stoxx 600 off 1.8 per cent in midday trading. The basic materials sector is leading the charge, with the sector in the UK off 4.5 per cent, led by Anglo American’s fall of 8.6 per cent. In Europe, it’s a similar story, with steel company ArcelorMittal, as one example, down 6 per cent. (European banks also seem to be taking a battering, we should add.)
But why commodities? Well, the obvious answer is that real estate tends to use a lot of them — whether it’s steel for the structure or copper for wiring.
With that in mind, you might be wondering about just what level of exposure to the business of digging stuff out of the ground we are talking about here. Well, not to worry, because Tom Price at Liberum did a quick back-of-the-napkin estimate on what a Chinese real estate crunch might mean for commodities, and . . . it’s not too pretty.
Here’s the key blurb from his note this Monday morning:
bearish commodities? yes.
looking narrowly at the direct/first-round impact on commodities, this event threatens a slowdown in China’s property sector – 1-of-2 very large, broad-based commodity-consuming sectors of this economy (i.e. the other = infra).
it’s generally well known (among resources sector investors, at least) that China’s share of global commodities consumption = 40-70%.
but what share of global consumption is China’s property sector? Of China’s total commodity supply, its property sector consumes:
40% of steel flow (380Mtpa = 20% of global total);
20% of copper (2.7Mtpa = 20% of global)
15% of aluminium (6Mtpa = 9% of global)
15% zinc (0.7Mtpa = 5% of global)
10% nickel (0.2Mtpa = 8% of global)
ANSWER: China property = 5-20% of global commodity supply. – so yes, Evergrande’s potentially a big deal to Commodity World.
Yep, Chinese real estate accounts for a fifth of all global and copper steel supply. Blimey.
We don’t have a whole lot to add on top of those eye-opening stats, bar a passing thought that if you were an economy which depended on commodity sales for a large chunk of your output — say, Australia — you might be concerned that the fourth quarter is going to be a touch more difficult than expected.
New arrivals may further stress Canada’s already tight housing markets
Author of the article:
Just when you thought you could catch a break from pandemic-fuelled housing madness, experts are predicting the reopening of the U.S.-Canada border, and Canada’s commitment to boost immigration, could fuel even higher levels of demand. All those new arrivals, students and family members rejoining loved ones will need places to live. And Canada’s housing supply is tight.
“If you think it’s expensive now, just wait,” says Tom Storey, a real estate agent with Royal LePage in Toronto. “The numbers tell us that prices should go up because there’s a lot of people coming here and we’re not building enough new properties.”
Canadian government raising immigration targets
Exactly when new arrivals will impact housing markets is vague. Border entry is limited to those who can show they’re fully vaccinated.
But, once the pandemic’s threat has largely passed, the U.S. and Canadian governments have both expressed hopes that border traffic will return to normal.
Likewise, while Canada’s immigration goals call for 401,000 new permanent residents this year (reaching 1.2 million by 2023), dates aren’t specific and COVID-19 will continue to delay things in the short term.
Canada’s borders have been closed to most immigrants for much of the pandemic. But as the country’s population ages, economic immigration from workers and employers who ultimately become permanent residents has become more important.
“The key to both short-term economic recovery and long-term prosperity is immigration,” Marco Mendicino, Canada’s Minister of Immigration, Refugees and Citizenship, said at a news conference where he revealed the country’s goals through 2023.
The newcomers will put pressure on housing — either as homebuyers or renters.
In addition to new permanent residents, the number of international students in Canada is also rebounding. Those numbers were rising sharply before the pandemic, growing to 402,500 in 2019 — a 15 per cent increase from 2018, according government data.
Those with temporary work permits will also grow the population. Almost 70,000 more people were issued work permits in 2019 (a total of 404,000) and 63,020 people with temporary work permits were granted permanent residency.
Newcomers will need housing
Home prices were rising pre-COVID-19, due to a lack of housing supply combined with low mortgage rates and strong consumer demand.
Amid the new immigration policies, a growing student population and a proposed childcare system that’s expected to give families room to save more of their income, demand for housing will only grow, according to a recent report from Scotiabank.
Yet, home construction hasn’t kept up with demand for several years.
This year, as fewer newcomers have entered the country, the ratio of home completions to population has improved slightly. That’s likely to worsen as the government meets its immigration targets, the report says.
To avoid a continued rapid acceleration in home prices, experts argue immigration targets should align with housing policies that help meet the demand.
“Our federal government’s decision to raise immigration targets today without making the corresponding supply-side housing policy changes needed to increase supply is a decision to inflate home prices out of reach of most Canadians tomorrow — including many of our newest fellow citizens,” John Pasalis, the president of Toronto-based Realosophy Realty, says in a recent market report.
Immigration to impact the resale and rental markets
While Canada’s major cities have seen double-digit home price growth in recent years, the market overall appears to be calming.
July sales slipped 3.5 per cent on a month-over-month basis, according to the Canadian Real Estate Association, and sales are down a cumulative 28 per cent from a March 2021 peak.
Home sales in Canada fell a significant 14 per cent year over year in August, the Canadian Real Estate Association (CREA) said Sept. 15. Still, the association says, home sales in this country remain historically strong. And a lack of supply of homes for sale is pushing prices to record levels in Canada’s most populous cities.
The rental market, too, has been down from its high — in part due to restrictions on Airbnb units, which released bundles of short-term rentals into the traditional leasing market.
“When the borders open and [people] go back to university, you’re going to see an increase in the rental market,” Storey says. “Then it will flood into the sale market.”
But analysts say the property market is facing headwinds — namely inflation and the specter of rising interest rates.
And many of the Canadians who wanted to buy a home in order to get more space amid the pandemic, or even downsize, have already done so, says Adil Dinani of the Dinani Group for Royal LePage West in Vancouver. That may help cool off prices in the months to come.
Building more housing also will help.
“Supply is the common denominator in most of these major markets,” Dinani says. “There’s a shortage of quality inventory.”
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
The Evergrande Group or Evergrande Real Estate Group logo of a Chinese real estate company is seen on a smartphone and a PC screen.
SOPA Images | LightRocket | Getty Images
China’s “highly distressed” real estate companies are at risk of collapse as the country’s highly indebted developer Evergrande is on the brink of default, warns AllianceBernstein’s Jenny Zeng.
Speaking with CNBC’s “Street Signs Asia” on Friday, the co-head of Asia fixed income at AllianceBernstein warned of a “domino effect” from a potential Evergrande collapse.
“In the offshore dollar market, there is a considerable large portion of developers (who) are implied to be highly distressed,” Zeng said. These developers “can’t survive much longer” if the refinancing channel remains shut for a prolonged period, she added.
The financial position of the other Chinese property developers also took a hit following rules outlined by the Chinese government to rein in borrowing costs of the real estate firms. The measures included placing a cap on debt in relation to a company’s cash flows, assets and capital levels.
While the struggling developers are tiny individually, compared to Evergrande, they make up about 10%-15% of the total market on aggregate, Zeng said. She warned that a collapse could result in a “systemic” spillover to other parts of the economy.
“Once it starts, it takes much more from a policy perspective to stop it than to prevent it from happening,” she added.
On its own, a managed default or even messy collapse of Evergrande would have little global impact beyond some market turbulence.
Senior Global Economist, Capital Economics
Taken on its own, the financial or social risks associated directly with Evergrande itself are actually “reasonably manageable,” Zeng explained. She cited the fragmentation of the Chinese property market as a reason behind this.
“Despite Evergrande’s size – we all know it is the largest developer in China, probably the largest in the world – [it] still accounts for only 4% and now it’s even less of the total annual sales market,” Zeng said. “The debt, particularly the onshore debt, is well collateralized.”
China’s ‘Lehman moment’?
Some economists have warned that the collapse of Evergrande could become China’s “Lehman moment” – a reference to the bankruptcy of Lehman Brothers as a result of the subprime mortgage crisis, which triggered the 2008 global financial crisis.
However, Capital Economics’ Simon MacAdam described that narrative as “wide of the mark.”
“On its own, a managed default or even messy collapse of Evergrande would have little global impact beyond some market turbulence,” MacAdam, a senior global economist at the firm, said in a Thursday note. “Even if it were the first of many property developers to go bust in China, we suspect it would take a policy misstep for this to cause a sharp slowdown in its economy.”
As of Friday’s close, the company’s Hong Kong-listed shares have plunged more than 80% year-to-date.
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