A Truro estate agent has said he feels “sympathy” for anyone trying to buy a home in Cornwall, as the city’s house prices continue to skyrocket. As the housing market continues to spiral out of control, even those who work in it have been left scratching their heads.
Figures from property site Rightmove recently stated that Truro (and its direct surroundings) was the city area with the second highest growth in house prices in the entire country. Truro’s average asking prices grew by 14.8% on last year, eclipsing the national average of 9.9%.
The massive rise in both house prices and average rents, across Cornwall, is largely being seen as a symptom of the county’s housing crisis. Driven in large part during the pandemic, where demand rose for living in Cornwall, locals have been left to pick up the pieces with housing scarcities and record-high numbers of people without a place to live.
David Mills, an estate agent covering Truro and the surrounding area from Mount Hawke, Stithians, and out to Trispen and St Mawes (TR1, 2, 3 and 4), said the current cost of a home is the highest he’s ever seen. “I think it’s property dependent,” he said.
“I had one over bank holiday weekend where in excess of 100 people contacted me to arrange viewings. We had 24 viewings over a weekend and then multiple offers.
“That house then went well in excess of its asking price. But then there are others which are sitting around on the market for a long period of time, not everyone wants to work on one.”
He said that anything below £400,000 goes “pretty rapidly,” and that the last three years there’s been a “huge increase” in how much the average house goes for across Truro. Pointing to a house price index using a hypothetical property on Moresk Road, Mr Mills outlined the following increases in the last 12 months:
- Apartments: +10%
- Terraced houses: +14.4%
- Semi-detached houses: +16.11%
- Detached houses: +16.92%:
This, he said, has not necessarily been driven by people moving into Cornwall from afar – but that there was an “influx” when working from home first became more popular in the early days of Covid. Mr Mills continued: “ I’m not a huge agent so I don’t need to sell a huge amount to survive.
“But in the last 12 months, out of all the properties I’ve sold there was only one bought as a second home, and one person moving from out of county into Cornwall. All the others have been local buyers looking to upsize or downsize.
“With Covid, I do think a lot of people realised they can work from home and don’t need to work from an office. That had a huge influx wanting to move into county.
“But around here, you have a city location with all the retail units available on your doorstep. You can jump in your car and within ten miles you’re on the coast. There’s so many different places, by living in Truro city. Those stats from Rightmove are pretty crazy.
“It being the second highest hotspot for asking price growth is unbelievable.”
Mr Mills, an estate agent for nine years, said while he didn’t see the last housing boom before the 2008 recession, the current state of things are the “craziest” he’s seen.
He added: “I sympathise with anyone looking to purchase as it’s so, so difficult. That many people are looking to buy and a massive lack of properties on the market. Again that’s a reason for prices going up. If there were more available it wouldn’t be as high.”
It’s not just house prices, rents have also become higher than ever before. Mr Mills, who is not a rental expert, said a house he used to rent in Threemilestone for £695 now costs £950.
He described this as “bonkers”, and said rental prices compared to pre-Covid are “absolutely insane.”
There’s a century home on Water Street in Peterborough that was, until recently, an affordable place to rent — about $1,000 apiece for a three-bedroom or a four-bedroom unit.
For more than a decade, it was owned by a family who rented it to university students and others. But over the years, the house wore down — and the owners decided to sell.
In came the Avanew Single Family Rental company, the only bidder, who snapped up the home for close to $550,000. They put in new hardwood floors and spruced up the dated kitchens. When it was put back on the rental market, one of the units was listed for $2,500 — more than double the original rate.
Avanew, the landlord, is a wholly owned subsidiary of Core Development Group. Core, a Toronto-based condo developer, made national headlines last year after announcing plans to purchase $1 billion worth of houses, many of them detached homes, and use them as rentals.
The news kicked off a firestorm of controversy. Critics slammed it as a corporation profiting off a housing crisis, amassing wealth through ever-more-expensive homes while ordinary families are shut out. Core’s founder, Corey Hawtin, defended the model as a way to provide people with family-sized housing in neighbourhoods they otherwise couldn’t afford to live in.
A year since Core announced its intentions, and as Ottawa lawmakers promise a forthcoming review of major real estate owners, the Star took a closer look at how the business has been operating in Ontario — interviewing tenants, homeowners who’ve sold to Core subsidiaries, realtors, housing experts and representatives of the company, while examining sale records for the more than 80 homes purchased by subsidiaries so far.
That analysis paints a picture of the company’s fledgling rental home strategy — to secure moderately priced, older homes in smaller cities such as Peterborough and Kingston, then fix them up, adding the likes of new floors and soaker tubs to make them more attractive.
The company adds extra units, where possible, to boost the number of places it can lease. These units are then rented out, in many cases, significantly above average market rent, the Star found.
These are the kinds of prices housing advocates say are only affordable to better-off families, including those just priced out of buying a house.
While early criticism of Core raised alarm about its strategy taking away home supply from potential buyers — and drew parallels with companies that have employed similar models in the U.S. — advocates are now concerned about Core entering cities with low vacancy rates, increasing rents in tight markets and making it harder for tenants searching for affordable rentals.
“When these investors are making profits it’s coming out of the pockets of renters,” said Paul Armstrong, a housing advocate in Peterborough.
“This is a prime example of how inequality grows.”
When Core disclosed its plans for the Canadian market last June, the reaction was immediate and explosive. Several realtors, mortgage brokers, politicians and housing advocates raised concerns — many of them focused on whether ordinary families could compete with a large corporation in the home-buying market, especially as a number of Ontario cities have more demand for single-family homes than available supply, a situation that has pushed purchase prices higher and higher. They feared Core’s converting of homes to rentals would further that squeeze.
With a goal of buying 4,000 rental units in Ontario, the Atlantic provinces, B.C. and Quebec, property records show Core has so far acquired at least 81 homes in Ontario, through various subsidiaries. Most are houses, with some multiplex buildings, spread across Peterborough, Chatham, Kingston, St. Catharines, Cambridge, Barrie, London and Hamilton.
Looking at roughly six dozen homes the company has purchased, the Star found the average home price — excluding houses transferred between subsidiaries — was slightly more than $550,000. In places such as Kingston, those homes fell below the benchmark price of a single-family home, which the local realtors’ association says was $621,500 in April.
Core says it’s primarily buying homes that were previously rentals, and vacant at the time of sale. Where there were tenants, some have told the Star they were offered thousands of dollars if they gave up the right to return after renovations, with some saying the amount didn’t make up for higher rents they faced elsewhere.
By analyzing roughly 20 online rental listings for post-renovation Core properties, the Star found many had been listed for more than the local average rent for a similarly sized unit — with some Core units more expensive than the average found among the usually higher price for new listings.
The activity of big investors has recently caught the eye of Ottawa lawmakers. In its spring budget the federal government promised a review of large real estate owners.
Although new for Canada, Core’s strategy is one that companies have widely used in the U.S., where corporate landlords have been buying swaths of houses to use as rentals for years, with one U.S. economist saying those homes are often rented to priced-out would-be buyers.
David Amborski, an expert in urban and regional planning at Toronto Metropolitan University, is skeptical many other Canadian companies will follow Core’s lead. “For me, I still think it’s at a bit of a risky state because of the costs involved,” Amborski said.
But John Pasalis, president of the real estate brokerage Realosophy, worries about the U.S. model creeping into the Canadian market, and what it means for ordinary families.
“I think it’s troubling, the direction we’re going in,” Pasalis said.
In Kingston, a house in Rideau Heights offers insights into Core’s approach.
The home at 130 Weller Ave. was owned by a family, listing agent Kim Cucheran said. The basement unit didn’t meet all the criteria for a market rental, so the family let it out to nephews and grandsons who needed it, charging around $500 a month.
Last year, the family listed the home for sale for $379,500. Within about four days, Cucheran said the owners received three offers, all within about $40,000 of each other. Core subsidiary Avanew won with an offer of $437,000.
Recently, Avanew’s Facebook page showed the lower level two-bedroom offered for $1,799 a month. For the main level three-bedroom, the company asked $2,399.
“They’ve done some renos and they look gorgeous,” Cucheran said. “But downstairs, wow. I can’t believe they’re actually getting that rent.”
According to Canada Mortgage and Housing Corp. (CMHC), average rent for a two-bedroom apartment or row house in Kingston was $1,408 per month as of October 2021.
In Peterborough, property records show Avanew spent $500,000 last year to buy 265 Lee St. Recently, its lower level two-bedroom was listed on Facebook for $1,850 and its main, three-bedroom unit was listed for $2,650. CMHC said October’s average two-bedroom apartment or row house in Peterborough cost $1,305, and three-plus bedroom was $1,365.
Among prices for newly listed units in Peterborough, rentals.ca found between January and April this year the average two bedroom, including non-basement units, had an asking price of $2,106, and the average three-bedroom cost $2,350.
Armstrong, the Peterborough housing advocate, said in order for a household to “affordably” rent a unit for $1,850 a month — affordable, CMHC says, means monthly housing costs don’t exceed 30 per cent of their income — a household would have to earn $74,000 a year. For the $2,650-a-month three-bedroom, they would need $106,000.
The median household income in the Peterborough area was $64,777, as of the 2016 census.
Speaking with the Star, Core reiterated its business plan — noting how many first-time buyers have been priced out of the single-family home market. The company sees it as the largest supply-and-demand gap for rentals. According to the 2016 census, there were 1.56 million rental units in Ontario — of which, 1.2 million were purpose-built apartments, condos and row houses, while just 352,430 were single-family homes or duplexes.
A business chasing profit is normal, but critics have raised particular alarm about those profits coming out of housing — treating homes as a vehicle for building wealth, rather than being a social need for people.
Core is more about the former than the latter, critics argue.
“Remember, they are coming in for a reason. They’re coming to extract the honey from the hive. They’re not interested in everybody getting a fair share of the honey,” Armstrong adds.
“This shouldn’t be happening with something so vital to us all as housing.”
Robert Justin, 50, a longtime Peterborough resident, says he doesn’t feel exploited. He’s just happy to be able to rent part of a large house for his family.
In mid-March, they moved into a three-bedroom bungalow purchased by Avanew for $535,000 last year.
Justin, who works part-time as a delivery company dispatcher, shares the unit with his wife, Patricia, who receives disability support payments, their daughter and granddaughter. Justin describes his family as low income.
Together they bring in about $4,000 a month. Their rent is $2,400 a month — or 60 per cent of their monthly income. Justin doesn’t know who rents the two-bedroom unit in the basement.
He says there’s lots of student housing in Peterborough, but the market is tight in terms of house rentals for families.
“At our last place we converted a living room to a private bedroom for my daughter and granddaughter using a wall unit that was large enough to section off the living room,” he says.
“We wouldn’t be able to afford to buy a house like this in this neighbourhood.”
When it comes to pre-existing renters in properties Avanew purchases, the company said compensation is being offered to tenants who depart for good as well as to those who indicate a desire to return. The amount each receives “varies,” the company added, noting it is also offering assistance to those needing help to relocate.
But Stacey Montemiglio, who lives in a Peterborough multiplex the company purchased in March, says she’s not going anywhere.
The building was listed for $899,000, and went for $1 million. Montemiglio says she was offered $5,000 to give up her right to return at the same rent, but declined.
“You can’t rent a one-bedroom apartment for under $1,000 in Peterborough, let alone a two bedroom,” the part-time receptionist who receives social assistance told the Star.
She rents her unit for herself and her daughter for $878 a month. Her dad, who recently had a stroke and is partially paralyzed, is also staying with them.
Peterborough currently has a one per cent vacancy rate, among the lowest in Ontario, according to CMHC.
In Kingston, 83-year-old Sylvia Richards, who is ailing with a lung disease, took $5,000 to leave permanently and used it toward first and last month’s rent for her new place. The house she moved out of, in which she rented a two-bedroom unit for $830 a month, sold to Avanew last July for $568,000.
Now, she pays $1,379 a month for a smaller two-bedroom elsewhere in the city.
“I had a nest egg for my son, and now I’ve had to dig into it,” Richards said.
Toronto Metropolitan University’s Amborski says buying in Kingston and Peterborough would be appealing for a company like Core because that’s where there’s financial return.
Unless an investor’s strategy was to bank on longer-term capital appreciation and shoulder losses month to month, parts of the GTA wouldn’t make sense, he said.
Cucheran, the Kingston realtor, said she’s seen an uptick in calls from out-of-town investors. When players like Core come in, Cucheran believes it makes it harder for locals to compete — in a city where she’s already seen more than a dozen people vying for homes listed under $600,000.
“We currently have so many first-time buyers here, trying to get into home ownership and have saved for a long time to build their future,” Cucheran said. “While we absolutely have the need to add to the rental market here in Kingston, we also need affordable rental housing.”
In the U.S., interest in single-family homes as rental investments picked up after the housing market crash of 2008, says Amborski. And it’s remained lucrative.
U.S. brokerage Redfin says investors bought 18.4 per cent of homes countrywide in the last quarter of 2021 — more than 75 per cent of which were single-family homes.
“Partly, the people who are going to rent from them are the ones who were trying to buy, and got frustrated after losing out on offers for multiple months,” said Redfin economist Sheharyar Bokhari.
In Canada, there have been indications of a growing investor interest in single-family homes.
In December, the Canada Pension Plan Investment Board announced a joint venture with Greystar Real Estate Partners to invest in single-family rentals in the U.S. In an interview with BNN Bloomberg, CPP’s global head of real estate said they weren’t currently focused on houses in Canada, but he “can imagine that this segment could grow.”
Ontario already has “very strong demand” from real estate investors, says Pasalis. He worries that increased attention on single-family homes will only gnaw further away at affordability.
Amborski believes Core is still testing the Canadian market — and remains skeptical that many other companies will follow suit. At the scale of their current operations, spread out over multiple cities, he doubts Core’s business will change house prices.
“I can’t see a ripple effect unless this became very financially successful,” he said.
Core, meanwhile, insists they are long-term, committed investors trying to bring homes to Canadians by investing in a segment of the market that has been “ignored by institutional investors for decades” — single family homes.
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New Zealand is finally starting to make headway on the housing shortage, but all of this progress is at risk if the Government goes back to sitting on its hands. Photo / NZME
Quietly, and without much fanfare, New Zealand has been digging its way out of the housing supply hole dug over the last few decades.
But now, with economic headwinds getting stronger, we risk repeating
The scorching pandemic-era US housing market is on the verge of a “coast to coast” price correction as the Federal Reserve hikes interest rates, a prominent economist warned this week.
Mark Zandi, chief economist at Moody’s Analytics, said his firm expects home prices to sink in key competitive markets that are the most “juiced” or overvalued. The projected price drops coincide with a massive surge in mortgage loan rates that have sapped the buying power of prospective homeowners.
The downturn will likely impact the cities of Phoenix and Tucson in Arizona as well as North and South Carolina and parts of Florida, according to the firm’s analysis. One key city set to be affected is Boise, Idaho, which Moody’s has identified as “the most overvalued market in the country.”
Zandi warned of the looming correction in the real estate market while speaking at a bipartisan housing policy summit in Washington DC, according to Bloomberg.
Cheap mortgage rates, a lack of housing inventory and surging interest during COVID-19 lockdowns drove a steep spike in home prices over the last few years — a trend that is expected to slow as the Fed tightens policy and mortgages approach 6%.
While the Fed’s benchmark interest rate does not have a direct impact on mortgages, all forms of credit and borrowing are becoming more expensive on the expectation of tightened fiscal conditions. The central bank is sharply increasing rates in an effort to combat inflation that has reached its highest level in decades.
Rising interest rates “have already caused the housing market to slow down,” Lending Tree senior economist Jacob Channel told The Post.
“Fewer people are getting mortgages, homes are sitting on the market for longer and some sellers are cutting prices,” Channel said.
“With that said, we’re coming off a period of time through 2020 and 2021 where the housing market was extremely hot, so this current “correction” is neither unexpected nor necessarily a bad thing – especially as it will give some buyers a bit more breathing room when they’re housing hunting,” Channel added.
The 30-year fixed-loan mortgage rate hit 5.81% this week, up from just 3.02% the same week one year ago, according to Freddie Mac data.
As mortgage rates rise, demand for loan applications among prospective buyers or homeowners looking refinance has hit a 22-year low.
So far, the rising rates have yet to reflect a major impact on prices.
The National Association of Realtors said the median existing-home sales price was $407,600 in May, up 14.8% from one year ago. However, existing home sales declined by 3.4% for the month — a sign of abating demand.
Larry Botel, a senior real estate advisor at Solomon Partners, said a housing correction is inevitable and “has already started to happen.”
“Your average home buyer cannot afford to pay the same amount as they could so prices need to adjust,” Botel said. “The same math will also continue to benefit the rental market as it will continue to be an option for price conscious homebuyer.”
A drop in housing prices would align with the Fed’s plan to bring down prices. Shortly after the Fed hiked its benchmark interest rate by three-quarters of a percentage point for the first time since 1994, Fed Chair Jerome Powell acknowledged the rapid changes in the housing market.
“I’d say if you are a homebuyer, somebody or a young person looking to buy a home, you need a bit of a reset,” Powell said. “We need to get back to a place where supply and demand are back together and where inflation is down low again, and mortgage rates are low again.”
While a price decline in key markets is likely, Zandi downplayed the possibility of a sweeping crash in housing on par with what transpired during the subprime mortgage crisis of 2008 – when risky lending practices led to a collapse in the market. The price drops are expected to be relatively low.
Zandi noted that available inventory is still historically tight, with housing vacancies are at all-time lows this time around rather than the all-time highs posted during the last crash. Mortgage lending is also far more stable than it was a decade ago.
“I just don’t see the the kind of mortgage defaults and distressed sales that would be necessary for big declines in housing values. That’s when you get crashes, when you have lots of foreclosures and a lot of distressed sales,” Zandi says. “That’s just not going to happen.”
A MASS building programme of social housing is desperately needed, campaigners urged today after new figures showed that house prices were “rocketing” and reaching unaffordable levels.
Mortgage lender Halifax said that a “typical” UK home now costs 7.1 times annual average earnings.
It estimated that the “average earnings” of a full-time worker are £39,402, and the average house price is £239,281 — up 16.8 per cent since the start of the pandemic in 2020.
The highest house prices were unsurprisingly found to be in London and south-east England, respectively 9.7 and 9.3 times average annual earnings, and the east and south-west of England — 8.5 and 8.4 times annual earnings.
Yorkshire and the Humber, the north of Ireland, Scotland and north-east were the least expensive.
National tenants’ union Acorn said the problem was forcing families into the hands of unscrupulous and exploitative private landlords.
Acorn Head Organiser Nick Ballard told the Star: “With fewer people able to buy a home, and having to pay much more for the privilege, families are being forced into an under-regulated, insecure private rented sector and facing poor standards and the fear of eviction.
“With the cost of living rising along with interest rates, many may be unable to keep up with the inflated mortgage payments that come with the high prices before long, but families are desperate to get on the housing ladder as it seems like the easiest route to security from eviction and the freedom to live how you please.”
He said a mass social housing building programme would provide high-quality housing for generations, immediately create good jobs and “end the supply problem and price spiral that is fuelling the housing crisis.”
The price of housing is yet another expense that has been rising this year.
The price of rent on average is rising 15 percent here in Erie due to prices of supplies going up, prices of utilities increasing, and property availability.
Gasoline, electricity, food, vehicles, and countless more items and utilities are seeing an increasing in price. Now, people should expect to see housing added to that list.
Homes are still in demand, but the supply can’t seem to keep up, according to local real estate managers.
“We’re still upside down when it comes to the amount of listings on the market compared to the amount of buyers,” said Dee Caruana, Agresti real estate realtor.
Houses are often being sold for much more than even their listed price.
“I’m talking my buyers out of buying. They’re paying crazy prices. They’re not thinking,” Caruana added. “And then when this market crashes, which I’ve seen it in the past, I saw the one in 2008 and one in the early 90s, they’re going to be in big trouble.”
Caruana notes that regardless of her advice, she is still seeing consumers buy what they want, when they want, even with the price jump.
Meanwhile, renters have seen a 15 percent rise in the price of rent, according to the Apartment Association’s president. He also notes that the average income of residents has increased 30 percent. With prices of supplies and utilities increasing as well, landlords have had to raise prices.
“So the biggest thing is the supplies. Unfortunately, when our supplies and our taxes and our water bills and utilities go up, the only thing we can do to combat that is to increase rent,” said Brandon Penn, president of the Apartment Association of NWPA.
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During the pandemic, there was a “no eviction” policy. Now, landlords are making their application qualifications stricter again.
Joanna Cathrine Penny Filipaina rented her home in Manukau, south Auckland, from Investment Portfolio Management Limited Partnership – before end-of-tenancy inspectors found she had sold thousands of pounds worth of her landlord’s furniture
A tenant sold £3,500 of her landlord’s property on Facebook.
Joanna Cathrine Penny Filipaina rented her home in Manukau, south Auckland, from Investment Portfolio Management Limited Partnership.
The agency ran the property for a landlord, and arranged for an inspection the day her tenancy ended in November 2021.
They found a huge haul of furniture was missing from inside the flat, including the fridge, washing machine, dryer, swivel chair, bedside table, console, table, mattress, bedhead, TV, blinds, wardrobe, washer dryer and shower.
A tribunal heard how the “the tenant admitted in a text message to taking the furniture items and selling them on Facebook.”
SOPA Images/LightRocket via Getty Images)
Along with the sold items, there was also extensive damage to the property – which included a broken toilet, holes in walls, scrape marks on walls and damage to locks and doors.
The tribunal heard most of the damage to the property, which was new at the start of the tenancy, was intentional.
Filipaina was ordered to pay back $7661.83 to her landlord – around £3,500 – to mostly cover the replacement of furnishings.
She was also ordered to pay for the damage repairs, including plastering and painting.
Caters News Agency)
Last year, a UK landlord and landlady shared what their squalid home looked like after every room was trashed by their “tenant from hell”.
Pensioners Jane and Vic Shoulders say they were devastated to find every room in their property trashed during an 18-month battle with their tenant.
The landlords, from Swindon, claim they eventually kicked out the tenant and are now faced with thousands of pounds of damage.
They decided to rent out their three-bed house for £750 per month after originally relocating to be near a sick relative.
They now say their once “show home” has been left littered with hundreds of bags of rubbish, a collapsed ceiling, broken children’s toys, hundreds of takeaway boxes and even two dead hamsters.
The couple says their nightmare tenant moved into the property but only paid one month’s rent government rules made it illegal to evict during lockdown.
Caters News Agency)
Caters News Agency)
They claim the unnamed young mother continued to live rent-free for a further 18 months.
Jane, 60 said: “It was such a lovely home but she has completely ruined it.
“Despite only paying rent once at the start of last year, we had to wait three months to start a lawful eviction.
“Then we went into lockdown and there was nothing we could do.”
Harvard’s estimates assume a down payment of 3.5 percent on a 30-year fixed rate mortgage, and that buyers would spend no more than 31 percent of their income on mortgage payments. They also assume a median-priced house valued at $659,161 in the Greater Boston metro area, which covers most of eastern Massachusetts and southern New Hampshire, but is significantly lower than prices found in most communities inside Route 128. At $181,254, Harvard’s estimate for Greater Boston is nearly twice the region’s median household income of $93,537.
The report comes after a year when both home prices and rents across the country shot up at “the fastest pace in decades,” as the Harvard report put it. Nationally, home prices jumped 20.6 percent as of March — the highest increase in 30 years. In Greater Boston region, prices are up 15.9 percent.
“If you’re a homeowner, you just won the lottery. And if you’re not, you just got locked out for a long time,” said Chris Herbert, managing director of the Harvard Joint Center for Housing Studies. “That’s certainly very true in the Boston area, where housing prices are so high to begin with.”
And lately, interest rates have soared, with the average rate on a 30-year fixed rate mortgage nearly doubling since the start of the year. The market has seen nothing like it since the so-called “Volcker Shock,” named after former US Federal Reserve Chair Paul Volcker, in 1980 when mortgage rates shot up by four percentage points in the span of three months, said Jeff Tucker, senior economist for housing website Zillow.
“The change in mortgage rates is really multiplying the affordability impacts of the price increases that happened throughout the pandemic,” Tucker said. “That altogether created an absolutely extraordinary increase in the cost of homeownership. The monthly cost of a mortgage payment is up astronomically in the past year, when you take that combination of higher prices and higher interest rates.”
In markets like Greater Boston, where white households are roughly twice as likely to own their home as Black and Hispanic households, the rapid increase in home prices has further widened the racial wealth gap, the Harvard report says. The combined effect of price appreciation and the sharp jump in interest rates is “going to lock in historical inequality in terms of who’s been able to become an owner,” Herbert said.
Much of the demand for homes in the past year and a half has come from would-be buyers interested in locking in record-low interest rates, which, Tucker said “enabled a lot of people to kind of make the numbers work, even buying homes that they previously would have considered unaffordably expensive.”
There are potentially cooler times ahead. The run-up in prices and sharp jump in mortgage rates has already priced many would-be buyers out of the market, and sales volume has slowed in recent months in many parts of the country.
The current jump is “arriving right as the market was just about the hottest it had ever been by any measure,” Tucker said. “That is already beginning to cool down the market.”
A cool down could create healthier housing market conditions, but experts say more supply is needed.
The Harvard report pointed to Massachusetts’ new rule requiring the 175 municipalities served by the MBTA set aside certain areas for multifamily housing. The proposed rules have met resistance from some towns and the state this spring is reviewing feedback before it releases its final guidance.
Local inventory of available homes has been low for years, and the US has been “heavily under-supplied” since the Great Recession of 2008, said Herbert of the Harvard JCHS. That’s a major factor making this moment in the housing market different than the crash 15 years ago, he said. In 2006 the US built 2 million new homes, many of them purchased with big mortgages their owners couldn’t afford. When prices fell, a wave of foreclosures crashed the market.
This time around, tougher lending standards and higher down payments means that most homeowners have more equity.
“We do have a lot of wealth out there that’s helping to bid up these prices,” Herbert said. “But it’s equity. It’s not debt. So it’s a very different market that way.”
Have a Massachusetts house hunting story of your own? Tell us in the comments.
Tata Consultancy Services’ Future-Ready Platform has Helped the Housing Finance Company Simplify Processes, Increase Velocity, and Enhance Customer Experience
MUMBAI, June 22, 2022: Tata Consultancy Services (TCS), has helped Aadhar Housing Finance Ltd. digitally enhance its business operations using the TCS Lending and Securitization platform.
Aadhar Housing Finance Ltd., the largest affordable housing finance company focusing on the low-income housing segment in India (by AUM as of FY21), aims to make the process of buying a house seamless using digital technologies. Towards this vision, it partnered with TCS for its end-to-end business process transformation powered by the TCS Lending and Securitization platform. The integrated, collaborative, connected, blockchain-based cloud platform transforms the end-to-end lending and securitization value chain.
TCS consultants leveraged their deep contextual knowledge and industry expertise to help Aadhar reimagine its end-to-end business processes, taking a digital-first, customer-centric approach. The TCS platform’s flexible design enabled an easy and quick adoption of the digitally transformed process flows. It offers seamless customer relationship management features using AI and ML. It has made sales operations more convenient by introducing business-friendly tools such as calculators, diary, route mapping, and geotagging while eliminating physical documents and enabling automated and system-controlled documentation and approval.
The future-ready platform hosted on the TCS Enterprise Cloud, has powered Aadhar Housing Finance Ltd.’s shift to centralized processing and an analytics-based approach across the business, improving processes, and controls. Its open API architecture has enabled Aadhar to connect with third parties for lead sourcing, KYC validations, document management, payment gateways, fintech integrations, and rule-based decisioning.
The TCS Lending and Securitization platform has helped Aadhar simplify its processes, increase velocity, enhance customer experience while managing its risks better. Additionally, it has modernized and future-proofed the company’s technology stack, strengthened data security, and enhanced operational resilience.
Deo Shankar Tripathi, MD and CEO, Aadhar Housing Finance Ltd, said,“Our partnership with TCS is helping us realize our strategy of leveraging technology platforms to improve customer experience. Coupled with physical branch and location expansion as well as enabling third parties to source customers and external checks, we continue to leverage digitization while improving underwriting processes and efficiencies to expand the business.”
Ujjwal Mathur, Country Head, TCS India, said, “The TCS Lending and Securitization platform is helping Aadhar Housing Finance Ltd. harness the power of digital technologies to enhance customer experience and improve its market position. We look forward to strengthening our relationship with Aadhar Housing Finance Ltd to help them transform their business and accelerate the digital transformation journey.”
The TCS Lending and Securitization solution leverages next-gen technologies to transform the end-to-end lending lifecycle – from origination to loan servicing and collections to monetization of the loan asset through securitization – with consent-based, secure and timely sharing of data and analytics among stakeholders. It leverages AI and ML to enhance end-customer and stakeholder experience and improve speed and accuracy in decision-making.
About Tata Consultancy Services
Tata Consultancy Services is an IT services, consulting and business solutions organization that has been partnering with many of the world’s largest businesses in their transformation journeys for over 50 years. TCS offers a consulting-led, cognitive powered, integrated portfolio of business, technology and engineering services and solutions. This is delivered through its unique Location Independent Agile™ delivery model, recognized as a benchmark of excellence in software development.
A part of the Tata group, India’s largest multinational business group, TCS has over 592,000 of the world’s best-trained consultants in 46 countries. The company generated consolidated revenues of US $25.7 billion in the fiscal year ended March 31, 2022, and is listed on the BSE (formerly Bombay Stock Exchange) and the NSE (National Stock Exchange) in India. TCS’ proactive stance on climate change and award-winning work with communities across the world have earned it a place in leading sustainability indices such as the MSCI Global Sustainability Index and the FTSE4Good Emerging Index. For more information, visit www.tcs.com.
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