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jimtan
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Re: What must the governments do to stop speculation?

Wed Apr 19, 2017 3:29 pm

the title of this thread should include ... "and stop dirty tricks"
 
tdma800
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Re: What must the governments do to stop speculation?

Wed Apr 19, 2017 3:33 pm

constipation is it
 
jimtan
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Re: What must the governments do to stop speculation?

Wed Apr 19, 2017 3:34 pm

definitely a squeeze on innocent people
 
tdma800
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Re: What must the governments do to stop speculation?

Wed Apr 19, 2017 3:37 pm

its just envy
 
jimtan
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Re: What must the governments do to stop speculation?

Wed Apr 19, 2017 3:38 pm

facts, not fiction
 
tdma800
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Re: What must the governments do to stop speculation?

Wed Apr 19, 2017 3:42 pm

drool with the envy
 
jimtan
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Re: What must the governments do to stop speculation?

Wed Apr 19, 2017 3:44 pm

that's you ....
 
tdma800
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Re: What must the governments do to stop speculation?

Wed Apr 19, 2017 3:54 pm

takes 1 to know 1
 
jimtan
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Re: What must the governments do to stop speculation?

Wed Apr 19, 2017 3:55 pm

It's happening
 
VanLord
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Re: What must the governments do to stop speculation?

Fri Apr 21, 2017 8:13 pm

What I don't understand is why the CRA doesn't collect capital gains on these assignments, they should put a withholding tax on the proceeds of the assignment. This is total BS that the gov doesn't crack down on this, and the media only talks about a speculator tax....how about enforcing our existing tax laws!!!



From the Globe and Mail:Vancouver’s presale condo market reaches fever pitch - http://www.theglobeandmail.com/real-est ... icle+Links
 
yzfr1
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Re: What must the governments do to stop speculation?

Sat Apr 22, 2017 6:47 am

VanLord wrote:
What I don't understand is why the CRA doesn't collect capital gains on these assignments, they should put a withholding tax on the proceeds of the assignment. This is total BS that the gov doesn't crack down on this, and the media only talks about a speculator tax....how about enforcing our existing tax laws!!!



From the Globe and Mail:Vancouver’s presale condo market reaches fever pitch - http://www.theglobeandmail.com/real-est ... icle+Links



So let me get this strait. Someone signs a presale contract, no real money has exchanged hands yet. You want to tax someone on capital gains? When the assignment is sold it's a under the table transaction. There is no way to verify its a gift, $1 or $200,000

This is the simplest form of supply and demand. There is way to much demand. Gouverment can build more condos.

The last thing I would like to add. Unless the developers are stupid. If they know the foreign buys can flip the assignments to local buys for huge profits, why not just sell the condos at a price which is closer to end user value instead of a low enough value to allow scalping.

This is how a free market works. Supply and demand.
 
jimtan
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Re: What must the governments do to stop speculation?

Sat Apr 22, 2017 7:58 am

For those unfamiliar with capitalism, the squeeze play works like this. In a hot market, Speculators and flippers grab inventory and sit on it. Force genuine buyers to panic and pay up. A 10% deposit can result in a 100% profit if the property can be sold for 'just' 10% more.

The more sophisticated speculators form buying groups and clean out the best units in a project. Squeeze, squeeze.

Genuine developers price their project carefully. They don't like to jerk their prices up, and find that no one buys as the tide turns around. Damages their reputation if they drop prices on the genuine buyers who signed at the higher prices.

This is a problem for Canada today because of the presence of Asian capitalists familiar with these tactics. And, oblivious regulators who have ideological blinkers. 

But, the governments can no longer ignore the problem. IMHO, there are quite a fair amount of properties now held by flippers and speculators. Genuine developers have to be worried about the possibility of whole scale defaults. Has happened in Asia. Hope that banks financing the projects will force the developers to 'diversify' their customer base.

Hope this helps.
 
yzfr1
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Re: What must the governments do to stop speculation?

Sat Apr 22, 2017 8:26 am

This is a legitimate response so I will also respond is a manner fitting. 
For those unfamiliar with capitalism, the squeeze play works like this. In a hot market, Speculators and flippers grab inventory and sit on it. Force genuine buyers to panic and pay up. A 10% deposit can result in a 100% profit if the property can be sold for 'just' 10% more.

The more sophisticated speculators form buying groups and clean out the best units in a project. Squeeze, squeeze.
What you just mentioned happens with everything, back to supply and demand. When stocks are newly issued who do you think has the first dibs. This nothing new, people buying up iPhone's on launch day and re selling on craigslist. This is a by-prodcut of a free market. No one is stoping locals from making connections with realtors and buying a pre-sale to flip as well.. it's not a exclusive relationship. Im sure foreign investors must have spent allot of money to grease their way into the pre-sale market. Just like with stocks, you can't expect to be in the know if you are just a trader at home. High net worth investors get to meet people and here things. 
Frankly money don't care where it came from. Developers would be happy to sell to the highest bidder, this just happens to be offshore investors at the moment. 


Genuine developers price their project carefully. They don't like to jerk their prices up, and find that no one buys as the tide turns around. Damages their reputation if they drop prices on the genuine buyers who signed at the higher prices.
Again I disagree, there is no need to jerk their prices up. A careful understanding of the market and what the market is willing to pay is target price. If my pre-sale condos are flying off the shelves why the heck would I not raise the price. Again supply and demand. And as for the "damage their reputation" are you serious? You never bought a car from the dealership and had a discount? Why do some condos developments have incentives when their units aren't moving... this is totally wrong. 

This is a problem for Canada today because of the presence of Asian capitalists familiar with these tactics. And, oblivious regulators who have ideological blinkers. 

But, the governments can no longer ignore the problem. IMHO, there are quite a fair amount of properties now held by flippers and speculators. Genuine developers have to be worried about the possibility of whole scale defaults. Has happened in Asia. Hope that banks financing the projects will force the developers to 'diversify' their customer base.

Hope this helps.

there will not be any "whole sale" defaults. Developers are asking 25% of total value within 1 year of pre purchase. If people back out they would lose their deposit, how many locals wood flood into the void with a 5%-10% or even 15% discount. Losing deposits and having a unit to sell at current market value vs 2-3 pre construction prices is a developers wet dream. 
 
reallyreal2
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Re: What must the governments do to stop speculation?

Sat Apr 22, 2017 8:28 am

yzfr1 wrote:
VanLord wrote:
What I don't understand is why the CRA doesn't collect capital gains on these assignments, they should put a withholding tax on the proceeds of the assignment. This is total BS that the gov doesn't crack down on this, and the media only talks about a speculator tax....how about enforcing our existing tax laws!!!



From the Globe and Mail:Vancouver’s presale condo market reaches fever pitch - http://www.theglobeandmail.com/real-est ... icle+Links



So let me get this strait. Someone signs a presale contract, no real money has exchanged hands yet. You want to tax someone on capital gains? When the assignment is sold it's a under the table transaction. There is no way to verify its a gift, $1 or $200,000

This is the simplest form of supply and demand. There is way to much demand. Gouverment can build more condos.

The last thing I would like to add. Unless the developers are stupid. If they know the foreign buys can flip the assignments to local buys for huge profits, why not just sell the condos at a price which is closer to end user value instead of a low enough value to allow scalping.

This is how a free market works. Supply and demand.


I am unfamiliar with the nuts and bolts of assignments but are you saying that you consider selling a pre-built assingmnet of paper is not a taxable event?
 
tdma800
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Joined: Wed Jan 23, 2008 9:12 am

Re: What must the governments do to stop speculation?

Sat Apr 22, 2017 10:18 am

VanLord wrote:
What I don't understand is why the CRA doesn't collect capital gains on these assignments, they should put a withholding tax on the proceeds of the assignment.  This is total BS that the gov doesn't crack down on this, and the media only talks about a speculator tax....how about enforcing our existing tax laws!!!



those assignments aren't titled by the way
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