Chinese Investors Driving Up Metro Housing Prices

[logicbomb]

Originally Posted by cornholio

You are correct about all of this being a product of globalization. However it is not sustainable. Laws will change to protect local real estate. This has happened before so its not something new. China will be forced to put in more efficient controls of money flowing out and Canada will have to put in controls on what money flowing in is directed towards. Even if no one wants to talk about this now it is the inevitable outcome and at this point I think the course is set. Globalization is fairly new and some of these problems also fairly new and proper laws and protections are not in place yet but at some point in the future they will be. Its natural evolution. But unfortunately due to apathetic politicians our society will suffer first.

Why would the Chinese government aim to do that? As my affluent "friend" from Guangdong stated; "they [China] are colonizing many cities and countries in the world, and securing many vital resources- all without using violent warfare."

I initially called him a moron, but I begun to ponder recently...and he's not too far off. Globalization has resulted in borders becoming mere lines on a map; any measures that were implemented to protect domestic/national resources (including real estate, labour) have been obliterated. There is absolutely no benefit to being a citizen in this country right now.

Right now, property is going to the highest bidder and this is why I see validity in Bcasey25raptor's post. If you are a hard-working citizen in this City, then you should be entitled to property.

[trofirhen]

Originally Posted by logicbomb

Why would the Chinese government aim to do that? As my affluent "friend" from Guangdong stated; "they [China] are colonizing many cities and countries in the world, and securing many vital resources- all without using violent warfare."

I initially called him a moron, but I begun to ponder recently...and he's not too far off. Globalization has resulted in borders becoming mere lines on a map; any measures that were implemented to protect domestic/national resources (including real estate, labour) have been obliterated. There is absolutely no benefit to being a citizen in this country right now.

Right now, property is going to the highest bidder and this is why I see validity in Bcasey25raptor's post. If you are a hard-working citizen in this City, then you should be entitled to property.

May I add my 'voice' to this in accord? Somethin's gotta give. Hard-working people from the City (?) should be able to afford to buy a home. If not, it's a breach of fundamental rights.
I say this having gone back and viewed yours and Bcasey's posts and dialogue. Having an out-of-wack market as exists might be called 'heretical' or such.

[Pinion]

Originally Posted by logicbomb

Why would the Chinese government aim to do that? As my affluent "friend" from Guangdong stated; "they [China] are colonizing many cities and countries in the world, and securing many vital resources- all without using violent warfare."

I initially called him a moron, but I begun to ponder recently...and he's not too far off. Globalization has resulted in borders becoming mere lines on a map; any measures that were implemented to protect domestic/national resources (including real estate, labour) have been obliterated. There is absolutely no benefit to being a citizen in this country right now.

Right now, property is going to the highest bidder and this is why I see validity in Bcasey25raptor's post. If you are a hard-working citizen in this City, then you should be entitled to property.

The only reason BC started enforcing its southern border is because too many Americans were coming up for the gold rush. 150+ years ago we understood that letting one giant wealthy, powerful demographic swamp the region was bad, now we encourage it to happen and call anyone who shows concern a racist.

[trofirhen]

Originally Posted by Pinion

The only reason BC started enforcing its southern border is because too many Americans were coming up for the gold rush. 150+ years ago we understood that letting one giant wealthy, powerful demographic swamp the region was bad, now we encourage it to happen and call anyone who shows concern a racist.

That's the enormous hypocrisy of the "Politically Correct" element in all this.

[whatnext]

Not surprisingly, the BC Liberals halfhearted attempt at controlling this comes up short. Christy doesn't really want to stop the property purchase tax gravy train:

...Richard Kurland, a Vancouver immigration lawyer who works with wealthy clients from China, said the [BC Gov't's new] policy is flawed and will not accurately gauge the true level of foreign participation in the local housing market.

Mr. Kurland says tens of thousands of wealthy “investor immigrants” from China who have arrived in B.C. over the years, and continue to arrive, on government programs are formally permanent residents under the current system. He said they would count as purely Canadian in the government’s analysis, despite earning all of their income abroad and, in some cases, continuing to live abroad while owning properties in B.C.

“There’s a huge gap. … They get a big F,” Mr. Kurland said. “The only on-the-ground effect is the continuous flow of millionaires into the region. That’s not abating in any way.”

In the City of Vancouver, the average price of a detached house in January reached $2.87-million, up an almost unbelievable 46 per cent from the same time last year. With some real estate firms saying as much as 70 per cent of detached houses more than $3-million are going to buyers from China...,
http://www.theglobeandmail.com/news/...ticle28792724/

So who's going to pipe up that 46% price increases are driven by the local economy?

[logicbomb]

It's ridiculous how anyone who voices their displeasure about this city gets labeled as a whiney entitled millennial. I have seen many recent blogs and articles that state what's wrong here and why youth are fleeing. I grew up in Vancouver near Cambie, and I have fond memories of Vancouver and I still love the City, but I reached my breaking point a few years ago when I was priced out.

I suspect the "data" will take at least 3-4 years to "collect" and prices will reach well above 5+ million for detached homes and over 2.5 mil for condos. I was absolutely ridiculed a few years ago when I suggested that Vancouver detached homes would be selling for over 2 million by 2018. The politicians we vote for support this "economic development." The voters that support these politicians continue to elect them into power.. Vancouver is entering a new era. This City is destined to be a winter ghost town and a summer resort spot.

[mezzanine]

I normally try to ignore threads like this because they tend to creep me out as they drift to the darker parts of the internet.

Sure, look at the effects of foreign money into property values, but also realize that Chinese capital outflows are a worldwide phenomenon. If you are going to target foreign inflows try to account for the effects of foreign inflows through permanent residents, if you can't - be clear about it.

And don't forget the other factors. Things that discourage property turnover like metro vancouver's relatively low property taxes or a non means-tested property tax deferral system. And realize that rules that have teeth that restrict maximized property values will have blow back from other sectors of the population.

Of course I don't have the answers, but the answer lies beyond a nostalgia for the old days and "look at what these Chinese are doing". I would think that a graduated property tax or a luxury property tax surcharge would be a transparent and fair way to limit gains at the higher levels. Effective transit would make living elsewhere in metro vancouver more feasible for a lot of people.

[mezzanine]

Originally Posted by Pinion

The only reason BC started enforcing its southern border is because too many Americans were coming up for the gold rush. 150+ years ago we understood that letting one giant wealthy, powerful demographic swamp the region was bad, now we encourage it to happen and call anyone who shows concern a racist.

Insert aboriginal-irony comment here.

Regardless, please continue this interesting discusson..

[squeezied]

Here's my prediction, with China's slowing economy, homes being snapped up by mainland Chinese (who seem so ever so willing and eager to purchase anything expensive) will eventually die down. However, in the near future we'll still see an exodus of Chinese money continue to flow out of China, perhaps even greater than before, due to the growing lack of confidence in China. But this trend won't be sustained forever without a booming economy and will eventually die down. Unless there's another major foreign source of money flowing into our real estate market, thereby replacing China's role in elevating the market, I'm expecting a major correction. The party doesn't last forever.

In the past decades we've had a continual succession of wealthy Iranians, Taiwanese and Hong Kongers immigrating to Vancouver maintaining an real estate market. Immigration of these groups have substantially died down; the same will happen with the mainland Chinese, it's only a question of when. More importantly though are there any groups that can and will replace the magnitude of mainland Chinese money flowing into our real estate market? India certainly has the potential to with its growing economy and population, but in the foreseeable future, I don't believe that will happen anytime soon.

So that's my hunch, we're going to see a major correction within, say 5 years. Thoughts or other predictions?

[Pinion]

Originally Posted by mezzanine

Insert aboriginal-irony comment here.

What happened to the first nations is a warning, not a reason to let it happen again. You defend your civilization and its values or you get wiped out. Everyone's ancestors has experienced something similar - only some cultures learn from it.

(usual disclaimer that "civilization" does not equal race before the next person tries to derail the conversation)

[Bcasey25raptor]

The BC Budget released recently doesn't give me any hope for this city. Vancouver is dying and the province refuses to do anything.

[WarrenC12]

Originally Posted by Bcasey25raptor

The BC Budget released recently doesn't give me any hope for this city. Vancouver is dying and the province refuses to do anything.

Queue the hyperbole.

Dying compared to what? We have the best economy in the country, and we aren't receiving a dime from LNG. The natural gas revenues booked as revenue this year are actually from previous years.

Of course real estate can't sustain us forever, but there's no reason to panic just yet. I think the Budget could have done more to turn PTT into a progressive tax, but otherwise there's no need for knee jerk reactions.

First world problems.

[mezzanine]

Originally Posted by Pinion

What happened to the first nations is a warning, not a reason to let it happen again. You defend your civilization and its values or you get wiped out. Everyone's ancestors has experienced something similar - only some cultures learn from it.

(usual disclaimer that "civilization" does not equal race before the next person tries to derail the conversation)

Derail the conversation?

I'm saying that the dramatic rise in housing prices may be multifactorial in addition to Chinese capital outflows and any legislation to combat those increases from foreign sources or otherwise must be nuanced to avoid unintended consequences. And legislation with teeth that will strongly limit property value increases will upset an entrenched home-owning local population.

You're saying that local Canadians are facing a grim quasi-apocolyptic clash of civilizations due to Chinese buying local homes. I don't think foreign home buyers are considering sending local kids to residential schools.

--------

I am willing to keep an open mind about legislation that may help. Australia recently promised to enforce legislation that restricts foreign home ownership. (why they didn't enforce it when they first enacted it is another discussion..). Interestingly, they left other speculative factors alone for locals, such as generous capital gains tax discounts for privately held investment property and allowing RSP-type accounts to invest in property with minimal-to-no capital gains tax.

[logicbomb]

Originally Posted by WarrenC12

Queue the hyperbole.

Dying compared to what? We have the best economy in the country, and we aren't receiving a dime from LNG. The natural gas revenues booked as revenue this year are actually from previous years.

Of course real estate can't sustain us forever, but there's no reason to panic just yet. I think the Budget could have done more to turn PTT into a progressive tax, but otherwise there's no need for knee jerk reactions.

First world problems.

Best economy in the country? And the price of homes continue to soar- well past every projection.

Yeah, it's a double edged sword. Construction is our industry, but it's ironic how our industry is pricing working people out of the City. A lot of my friends have made the move the past year and a few more are moving into the suburbs. All this is doing is forcing many to commute further distances which is putting a strain on our transportation infrastructure.

I lived in Vancouver for 15 years before moving into the suburbs. From what I see, Vancouver is dying. Go walk around QE and Oakridge, the difference in 10 years is evident...That was once a vibrant neighborhood. Now? A lot of the homes there sit vacant- gone are the garage sales, gone are the community organized events, gone are local businesses that have been priced out of there with the high lease $$.

[s211]

Originally Posted by logicbomb

Go walk around QE and Oakridge, the difference in 10 years is evident...That was once a vibrant neighborhood. Now? A lot of the homes there sit vacant- gone are the garage sales, gone are the community organized events

I can attest to experiencing this also.

[logan5]

The media loves this. They know people love to blame the Chinese for rising housing prices, so of course there's a story about it, or related to it, once a week now. These stories get ratings.

The Andy Yan study showed that there is not much difference between Vancouver and Calgary when the amount of empty immigrant investor properties are measured. And I will also point out that there are a lot of Chinese Canadians who are participating in the local economy and are buying property, who I think are unfairly being lumped in with the foreign investors.

The main culprit for our high prices has to be our extremely limited supply of land. We only have 700 sq miles of developable land. Then subtract from that the Agricultural Land Reserve and Burns Bog and we are left with very little land to build housing on. I can't think of any major city in North America, Europe, or Australia (where housing prices are skyrocketing) that even comes close to being as land constrained as Vancouver is.

Maybe you can blame Chinese investors to certain extent, but the majority of the blame has to go towards City governments who refuse to up zone single detached homes. Homes which occupy the vast majority of our very scarce land. We absolutely have to start building row-houses on top of detached homes.


https://www.google.ca/url?sa=i&rct=j...55907410716020

[Dale]

Meaning Vancouver is a victim of its own success ? Maybe nothing much more complicated than everyone wanting to be there, ergo prices increase ?

[Sheba]

To fan the flames here...

Chinese investors snag Vancouver's biggest real estate prize: All four towers of the Bentall Centre

Chinese investors have won one of the most important commercial real estate auctions in Vancouver history, swooping in to grab a controlling interest in all four towers of the Bentall Centre.

Sources confirmed to the Financial Post that Anbang Insurance Group Co. Ltd., a Beijing-based company with a reported US$114 billion in assets, is buying what amounts to a 66 per cent stake in Bentall I, II, III and IV — a sprawling commercial 1.5-million-square-foot office complex, with some retail, in the heart of Vancouver.

http://www.nationalpost.com/chinese+...989/story.html

[djmk]

Originally Posted by logan5

The main culprit for our high prices has to be our extremely limited supply of land. We only have 700 sq miles of developable land. Then subtract from that the Agricultural Land Reserve and Burns Bog and we are left with very little land to build housing on.

And only 50% of the ALR is actually being farmed!

http://www.metrovancouver.org/servic...s/default.aspx

[Krissy]

Originally Posted by squeezied

Here's my prediction, with China's slowing economy, homes being snapped up by mainland Chinese (who seem so ever so willing and eager to purchase anything expensive) will eventually die down. However, in the near future we'll still see an exodus of Chinese money continue to flow out of China, perhaps even greater than before, due to the growing lack of confidence in China. But this trend won't be sustained forever without a booming economy and will eventually die down. Unless there's another major foreign source of money flowing into our real estate market, thereby replacing China's role in elevating the market, I'm expecting a major correction. The party doesn't last forever.

In the past decades we've had a continual succession of wealthy Iranians, Taiwanese and Hong Kongers immigrating to Vancouver maintaining an real estate market. Immigration of these groups have substantially died down; the same will happen with the mainland Chinese, it's only a question of when. More importantly though are there any groups that can and will replace the magnitude of mainland Chinese money flowing into our real estate market? India certainly has the potential to with its growing economy and population, but in the foreseeable future, I don't believe that will happen anytime soon.

So that's my hunch, we're going to see a major correction within, say 5 years. Thoughts or other predictions?

I certainly hope so! Good times don't last forever!