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eyesthebye2
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Foreign buyers crushing Vancouver home dreams

Thu May 19, 2016 8:03 am

http://www.cbc.ca/news/canada/british-c ... -1.3572499


The Canadian and British Columbia governments are complicit in fuelling Vancouver's housing crisis as foreign Chinese buyers continue to shut local residents out of the market, a new study says.

Josh Gordon, the study's author and assistant professor in the School of Public Policy at Simon Fraser University, said people's dreams of owning a home are being crushed because they can't compete with foreign investors and no longer accept "distraction" excuses such as low interest rates for the state of the super-heated market.

"People recognize what's going on, and they're willing to call a spade a spade," he said, stressing that such views are based on reality, not racism.

His report compiles a number of other studies, including data on home-buying trends, population density, the cancelled immigrant investor program, and American research on the same issue.

Gordon said his report blames Vancouver's housing crisis on foreign buyers, particularly from China, because "this is where the evidence points, not because of some anti-Chinese animus."

Chinese investors have also spiked home prices in the Toronto region, but Vancouver has seen the highest rise in real estate due to the influx of foreign money reaching an unprecedented level in the last year, he said.

Gordon noted that other countries, including Australia and Singapore, have created policies for foreign homebuyers to protect their own citizens but that hasn't happened in Canada.

BC Highrise
In the condo towers of central Vancouver, foreign ownership is 5.4 per cent, while in central Toronto it's 5.8 per cent (CBC)

The average sale price of a single-detached home in Metro Vancouver was $1.4 million in April, a 30-per-cent increase from a year earlier, according to the Real Estate Board of Greater Vancouver.

The report, titled "Vancouver's Housing Affordability Crisis: Causes, Consequences and Solutions," says political inaction has allowed the problem to grow.

"By linking the crisis unambiguously to foreign ownership and investment, documenting the major harms of the affordability crisis, and proposing a policy route out of the current mess, the report hopes to harness the city's resentment and dispel its resignation."

Mobilized and informed residents can ideally hold political leaders accountable, the report says.

Mounting frustrations

Nazma Lee said she and her husband Lloyd have become increasingly frustrated because they can't afford a home as they continue renting a two-bedroom condo with their two children.

Lee, a lawyer, and her husband, an engineer, were born and raised in the Vancouver area but fear that like other residents they may have to leave to buy a home elsewhere.

"I do think Vancouver is being affected by massive amounts of foreign investment," she said.

Lee said it's time for the B.C. and federal governments to take "drastic measures," including tracking the source of money for real-estate investment to deal with possible money laundering

"I feel like there's a little bit of willful blindness and people know what's going on, but nobody wants to look into it because so many people are making money off real estate in Vancouver," she said.

Political plans

In March, Premier Christy Clark said the province will impose regulations to end the "shady" practice of contract flipping, allowing real estate agents to flip a property multiple times at higher prices before a deal closes as they continue making commissions while buyers avoid paying property taxes.

This year's federal budget allocated $500,000 over the next year for Statistics Canada to develop methods to track ownership of Canadian homes by foreign homebuyers.

CANADA-CHINA/HOUSING
Chinese-first signs outside a mansion under construction in a Vancouver are the kind of anecdotal information indicating foreign money is coming to Canada seeking a safe investment. But such evidence fails to indicate whether the buyers are speculative investors or domestic residents making a long-term investment. (Reuters)

The Opposition New Democrats have put forward two private member's bills, one calling for a two-per-cent speculation tax and the other to close a loophole allowing investors to avoid paying property transfer tax.

NDP housing critic David Eby said the province's commitment to reintroduce a requirement for homebuyers to disclose their citizenship on land title documents is unlikely to make any difference.

"The idea that if people are misrepresenting their residency on anti-money laundering forms are going to suddenly give you frank and honest information on land titles form is a bit silly."

Eby said he has met with business owners who are struggling to recruit and retain professionals because the high cost of housing is deterring people from moving to the city.

"Housing is going to be a central issue for us," he said of the matter that will potentially drive the NDP's election agenda before voters go to the polls in May 2017.

"It's not just Metro Vancouver that's facing this challenge," he said. "There are rental vacancy rates across the province of less than one per cent."

B.C. Affordability Housing Fund

Eby said he supports a B.C. Affordability Housing Fund, proposed by the Sauder School of Business at the University of B.C., to collect a 1.5-per-cent real estate surcharge from non-resident property owners, with the money generated to be distributed to residents.

Tom Davidoff, director of the Centre for Urban Economics and Real Estate at Sauder, said that at a tax rate of $15,000 for a house worth $1 million, a minimum of $100 million a year would be raised in Vancouver alone.

He said 40 academics at the University of B.C. and Simon Fraser University have endorsed the fund, and the idea was presented to provincial government officials earlier this year.

"It's very important that we see outside investment as an opportunity," he said. "It can only be a bad thing if politicians are too stupid and lazy to not make sure everybody benefits."
 
Demonizer
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Re: Foreign buyers crushing Vancouver home dreams

Thu May 19, 2016 10:49 am

it's not only foreign buyers, it's all out capitalism in a global real estate market. recently it was announced that 30% of luxury home buyers in West Vancouver were Chinese. What about the other 70% ???

one thing is for certain, the government in it's complicity, have devised a marketing scheme to somewhat defraud the wealthy foreigner. Some of them are unknowingly convinced that Vancouver is the best place in the world to be although it could very well could be for many.

It is too bad that also these same foreign victims are also the scapegoat to distract us away into more competition and division to take our attention away from the real problem which is the policies themselves.

If they really care about "home grown canadians" they would not allow foreign investing at all but of course they not only allow, they promote it. that's capitalism.

"The majority owner of a Point Grey mansion that was sold earlier this year by Canaccord founder Peter Brown for a record $31.1 million is a “student,” property records show."

"Eby said the government’s messaging and slow response to the housing crisis in Metro Vancouver could be because party donors, like Brown, are directly benefiting from the red-hot market.

According to financial records, Brown has donated $62,500 to the B.C. Liberal Party in the past two years, and Eby further noted that Brown is a longtime Liberal fundraiser."

http://vancouversun.com/storyline/stude ... ey-mansion
 
jimtan
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Re: Foreign buyers crushing Vancouver home dreams

Thu May 19, 2016 1:07 pm

AS pointed out in this survey, foreign investors constitute 4% in metro.

http://www.realestatetalks.com/viewtopi ... 8&t=129574

As your article reports,"In the condo towers of central Vancouver, foreign ownership is 5.4 per cent, while in central Toronto it's 5.8 per cent (CBC)".

So, foreign buyers are crushing locals only in CoV westside landed properties. Yes, Asian migrants are a significant factor too. But, the largest contributors are the low interest rates and domestic investors. Eventually, the tide will ebb as interest rates rise and domestic investors sell off.

The biggest current problem is the panic. Paying silly prices for east side homes and in Delta etc. Will not end well. :roll:
 
Geyser
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Re: Foreign buyers crushing Vancouver home dreams

Thu May 19, 2016 1:37 pm

AS pointed out in this survey, foreign investors constitute 4% in metro.

http://www.realestatetalks.com/viewtopi ... 8&t=129574

As your article reports,"In the condo towers of central Vancouver, foreign ownership is 5.4 per cent, while in central Toronto it's 5.8 per cent (CBC)".

So, foreign buyers are crushing locals only in CoV westside landed properties. Yes, Asian migrants are a significant factor too. But, the largest contributors are the low interest rates and domestic investors. Eventually, the tide will ebb as interest rates rise and domestic investors sell off.

The biggest current problem is the panic. Paying silly prices for east side homes and in Delta etc. Will not end well. :roll:
+1

WTF? I'm agreeing with Jimtan again. Say it ain't so! :shock:
In fond memory of Taipan, a model of modesty, decency, dignity and tolerance. Long may we all prosper from the tremendous legacy of worldly wisdom and specialized real estate knowledge which he left in the "Arguments" thread.
 
eyesthebye2
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Re: Foreign buyers crushing Vancouver home dreams

Thu May 19, 2016 9:06 pm

"You can’t see the forces that are dictating this in terms of interest rates or local economy or anything like that. It’s being driven by foreign money outflows, specifically from China, and by exchange rates. We had this perfect storm of this fear of the Chinese yuan devaluation in China last year concurrently with a Canadian dollar collapse. It triggered these big outflows, and a lot of it headed for Vancouver"

http://www.macleans.ca/economy/economic ... ng-market/

AS pointed out in this survey, foreign investors constitute 4% in metro.

http://www.realestatetalks.com/viewtopi ... 8&t=129574

As your article reports,"In the condo towers of central Vancouver, foreign ownership is 5.4 per cent, while in central Toronto it's 5.8 per cent (CBC)".

So, foreign buyers are crushing locals only in CoV westside landed properties. Yes, Asian migrants are a significant factor too. But, the largest contributors are the low interest rates and domestic investors. Eventually, the tide will ebb as interest rates rise and domestic investors sell off.

The biggest current problem is the panic. Paying silly prices for east side homes and in Delta etc. Will not end well. :roll:
 
jimtan
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Re: Foreign buyers crushing Vancouver home dreams

Fri May 20, 2016 6:33 am

Ian Young is a correspondent for the SCMP. Not an analytical viewpoint. For example, the writer of the article pointed out to Young that the majority of the ethnic Chinese in Vancouver are not millionaires. :wink:

Further, the numbers for the Immigrant Investor Program (now ended) were not that large. Bearing in mind that many of these people have returned home. Young doesn't have the net numbers. :roll:

"It was crazy. We’re talking about something like 120,000 to 140,000 people since this immigrant investor scheme came into being in the mid to late eighties. Yet the average income tax paid by the principal applicants, by these millionaire migrants, was $1,400 per year in Canada."

So far, you have not made a strong case for your POV. Rather, you have cherry pick like the best bears. :mrgreen:
 
eyesthebye2
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Re: Foreign buyers crushing Vancouver home dreams

Fri May 20, 2016 7:56 am

I call 'em how I see 'em Jim
Prices don't get to where they are now unless there is a massive influx of wealth.
Don't minimize the problem - dismissing the impact of foreign money will not light a fire
under 3 the levels of government to provide a solution.
Ian Young is a correspondent for the SCMP. Not an analytical viewpoint. For example, the writer of the article pointed out to Young that the majority of the ethnic Chinese in Vancouver are not millionaires. :wink:

Further, the numbers for the Immigrant Investor Program (now ended) were not that large. Bearing in mind that many of these people have returned home. Young doesn't have the net numbers. :roll:

"It was crazy. We’re talking about something like 120,000 to 140,000 people since this immigrant investor scheme came into being in the mid to late eighties. Yet the average income tax paid by the principal applicants, by these millionaire migrants, was $1,400 per year in Canada."

So far, you have not made a strong case for your POV. Rather, you have cherry pick like the best bears. :mrgreen:
 
eyesthebye2
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Re: Foreign buyers crushing Vancouver home dreams

Fri May 20, 2016 8:23 am

Quebec investor program 1900/year
BC Investor program 2400/year

Those 2 combined are enough to produce what you see. That's assuming there are ZERO coming from the Federal program
 
Demonizer
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Re: Foreign buyers crushing Vancouver home dreams

Fri May 20, 2016 8:35 am

interesting when you look at that, 4300 millionaire admitted into Canada doesn't seem like a whole lot of people. even more refugees came in comparison.

but to a market like Vancouver, 4300 homes is a big dent in the inventory.
 
yzfr1
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Re: Foreign buyers crushing Vancouver home dreams

Fri May 20, 2016 9:19 am

It is a big dent, I personally know a few families from mainland China in the investment class. They have a house, and they have a house for their kids when they get married. Also they have a few increment properties as well.

Investment class immigrants are not the only ones with $$$, lots of working class professionals from Asia who also immigrate here have money.

In live in Renfrew heights, almost all of my neighbours are Chinese. When you walk on the streets you'll see lots of Asians. 1/10 I would say are "rich mainland" Chinese. Most seem to be working class but they have money from family to buy a house in Vancovuer
 
eyesthebye2
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Re: Foreign buyers crushing Vancouver home dreams

Fri May 20, 2016 10:30 am

4300 is just from 2 programs - not the total number. It's the tip of the iceberg.
Previously suggested that most of the Quebec program end up in Vancouver...so at bare minimum 4300 "investors" buying homes in Vancouver at bare minimum. Easy to see why detached prices up 40% in one year.
Use common sense when all else fails.

We need an emergency response from governments. Blaming the price surge on interest rates lets them off the hook. Its simply distracting from the root problem.

interesting when you look at that, 4300 millionaire admitted into Canada doesn't seem like a whole lot of people. even more refugees came in comparison.

but to a market like Vancouver, 4300 homes is a big dent in the inventory.
 
whattodo
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Re: Foreign buyers crushing Vancouver home dreams

Fri May 20, 2016 11:21 am

And this is 4300 for one year. Multiply this by 10, 20 or 30 years & you see how we get to our crazy high home prices.

Sure some of these people have sold their places but some have multiple properties. If there are 50,000 or 100,000 of these people who own a house in Vancouver then you can see why inventory is so low.
How many houses are in Vancouver anyway? 200,000 maybe (just a guess??)
 
jimtan
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Re: Foreign buyers crushing Vancouver home dreams

Fri May 20, 2016 2:37 pm

Actually, I have been arguing since 2009 that CoV RE has been Canada's most expensive because of structural issues. That is. the restrictive zoning rules about densification. Notice that the outlying districts like Surrey and Delta have more elbow room, and the price gap between CoV and outer districts has widen.

Add in the long term increase in population of metro Vancouver, and prices have to go up. The long term bears have been defeated decisively.

Since 2009, there has been a boost from low interest rates. What happens when interest rates rise?

The panic buying in the last two years has been irrational. Plenty of condos and townhouses being built, as prices rise. Logical behavior?

What's disturbing is the leap in prices in Burnaby, Tsawwassen etc. Do wealthy Asian immigrants live there? Do foreign investors invest there? :roll:

Get a grip on yourself. What's the solution? Shutting out foreign investors will merely dampen demand in CoV. The long term solution is densification AND mass transit. :roll:

While Denver is different from Vancouver, this illustrates how light rail can change the game.

"The Train That Saved Denver"

http://www.politico.com/magazine/story/ ... wth-213905
 
tdma800
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Re: Foreign buyers crushing Vancouver home dreams

Fri May 20, 2016 2:42 pm

Last year in autumn the BC gov did something really neat. They cut the required investment amount. for provincial immigration in half. to the moon!!
 
jimtan
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Re: Foreign buyers crushing Vancouver home dreams

Fri May 20, 2016 3:04 pm

Just stick to the facts.

"Canada seeks 50 millionaire immigrant investors under pilot program"

http://www.cbc.ca/news/politics/canada- ... -1.2875518

"... Approximately 65,000 applicants were left hanging when the government announced it was axing the program."

https://en.wikipedia.org/wiki/Canadian_ ... or_Program

"... The B.C. government partnered with a Vancouver-based organization to create a business immigrant integration support program that has brought about $5.2-million in investment over the past year. Advocates say it is closely monitored and designed to attract people who will “actively manage” a business here.

Queenie Choo, who heads SUCCESS, a group that helps Canadians of Chinese descent overcome cultural barriers, said the joint program with B.C. has much more stringent conditions than the immigrant investor program."

http://www.theglobeandmail.com/news/pol ... e16821623/

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