Good morning, and welcome to the world of race based housing advertisements.
What the…: Yes, back in 2019, the US Government claimed that Facebook Meta enabled and encouraged advertisers to target their housing ads by relying on race, colour, religion, sex, disability, familial status, and national origin to determine which Facebook users will be eligible, and ineligible, to receive housing ads.
What Meta said: ‘Hey, we are willing to settle’. Meta and the US government have agreed to settle a lawsuit that accused the social network of engaging in discriminatory practices.
What this means: Because of this ground-breaking lawsuit, Meta will -- for the first time -- change its ad delivery system to address algorithmic discrimination.
📌 Fyi, this newsletter has a zero discrimination policy. How can you be so sure? Well, we ask our subscribers for nothing more than their emails. And, we never will.
– Rahul Mishra and Anuvab Chattopadhyay
Global Housing Slowdown - What's Up?
The global housing market seems to be nursing the brake pedal again. After a year synonymous with huge demand, soaring prices and record sales, there seems to be a cool-down afoot.
While this isn’t a crash, it can be a temporary pause of sorts.
The biggest reason
Higher mortgage rates and financing costs for homes, making things unaffordable for many buyers.
Slowdown Signs
1️⃣ Higher housing unsold inventory and active listings, indicating slightly lesser demand.
2️⃣ Further price drops - For a long time, housing sales were seeing bidding wars and price hikes. However, with buyers facing affordability squeezes, there is lower buying competition. Many sellers are thus reducing prices to attract more buyers.
3️⃣ More real estate layoffs - Many global realty firms are laying off employees in response to lower market activity. Some of the names on the list include Compass and Redfin.
4️⃣ Lower mortgage demand - Application counts are coming down for mortgages, indicating cooling demand.
5️⃣ Lesser buyers - With affordability issues constraining buyers, thanks to increasing EMI load, there are fewer of them shopping around.
Yet, the hopeful bit is that these are temporary movements. One slash in mortgage rates and the market could start from where it left off.
Canadian Home Sellers On A Slippery Slope
With the en-masse cooling-off of Canadian housing markets coupled with interest rate hikes, sellers are increasingly finding themselves on slippery terrain, at least in markets like Ontario.
What and Why?
RBC Chief Economist, Robert Hogue, confirms the dwindling grip of sellers on the housing market, even though buyers are yet to achieve pole position.
⚠ Home sales slid by 8.6% nationally between April-May, while new listings went up by 4.5%.
⚠ The sales-to-new-listings ratio is at 57.5%, the lowest since April, 2019.
⚠ The MLS (multiple listing service) Home Price Index also plunged by 0.8%, driven mostly by Ontario.
What This Means
Sizable declines in multiple zones like Huron-Perth, North Bay, Greater Toronto, and Cambridge.
There could be downward pressure on prices with rising mortgage rates, meaning housing price corrections could be around the corner - picture a 10-13% benchmark price decline for Ontario.
Guess who’ll call the shots then?
Warehousing Behemoths Scramble For A Bigger Realty Slice
While demand for property is cooling down, warehousing biggies are chalking slightly different strategies - like amassing gigantic scale.
What it essentially translates into
There’s been an industry paradigm shift from massive warehouses in peripheries to smaller fulfillment centres within cities.
Reports indicate national average vacancy rates falling by 3.4% for warehouses in Q1. Leasing rates have also zoomed by 7% in the period.
Biggies bite the bait
📌 Prologis, the biggest global warehouse space owner, is buying Duke Realty Corp for USD26 billion, enriching its portfolio by 160 million sq. ft. The company already has more than 1 billion sq. ft. in its kitty.
📌 Amazon has already scaled up its logistics infra throughout the pandemic. It has taken a pause and will sub-lease 10 million sq. ft. However, there’s no denying that it has bitten off more than it can chew in the past.
📌 MRP Industrial is also building 7 million sq. ft. of industrial space.
What experts feel
📉 Slight dips in demand for warehousing space and lower growth in rental rates, plus bigger players consolidating their hold on the market.
📈 Market fundamentals continue to be stable, especially on the back of record-positive figures.
Takeaway: Till the time rentals and demand zoom up again, expect more behemoths to keep scaling their industrial portfolios.
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India's premiere employment generation effort, the Atmanirbhar Bharat Rozgar Yojna (ABRY) - which incentivises employers, is glowing brighter than analysts estimated.
Yeah? Yeah, latest data reveals 7.51 million jobs were created under the scheme since ABRY came into existence in December 2020, almost 28% more than the initial target of 5.85 million.
May you exceed your target today. Be back in your inbox tomorrow. 💚
☕ The Crew@Ginger Chai