Chinese Investors Driving Up Metro Housing Prices

[Vin]

Originally Posted by cornholio

Of course I am not happy because these people DON'T start businesses here, and they don't pay the taxes they should, what is saddest of all is that it looks as if they are actual net drains on our country. Few posts up I posted a study from 2010 that back this up with a less than perfect survey/study, one can only assume that in reality the numbers are much worse. Why do you think Richmond has one of the lowest reported incomes in Canada? [[[Vulgar / Racist remarks removed by moderator]]] These people have no loyalty to Canada, corruption, tax evasion is second nature to them, they don't invest in Canada, they just use it. These are not the people you build a country from. Bring me in a few boatloads of poor Chinese miners any day of the week, those people at least contribute.

But don't worry, this is not sustainable, eventually we will pay for these policies, and to a extent we already are. These are a few special interest groups that benefit from these policies, but overall the citizens of Canada are getting fucked and when reality comes back knocking they will all get screwed even more.

Anyways like I have been saying for years, the CRA needs to get its shit together and tax all these peoples offshore income to to the max, and fine people who try to evade paying taxes to the max. Also the investor immigrant program should be completely scrapped and immigrants with a certain net worth should be forced to pay a entry tax based on their total net worth, what a fair amount would be I don't know. Oh and of course like I said these people are technically Canadian when they come in and buy a couple houses with cash, so yeah they're not really foreigners, or when they continue to make offshore tax free income and years later buy a few more homes for their kids with cash, their still technically Canadian. Like I said the whole are foreigners buying up our real estate question is just side stepping the real issue.

Not everyone feels 'screwed over' like you do. Tell that to the many west siders who sold their investments with huge profits, allowing them to retire with ease. Many benefit from those policies too. Name a developer who only builds subsidized housing for the 'down and out'. Name any retailer or restaranteur who goes bust from a higher spending power. Fact is, change those policies if you can, but don't assume that everyone doesn't benefit from them. If the government doesn't rope them in, another country will benefit from their cash. It's happening around the world. The government has just changed some of the policies to make these immigrants stay longer or impose other more stringent conditions before they can get their status. I do agree that more needs to be done to tax offshore tax evaders. And that also includes many well-heeled Canadians with a long history in this country. However, don't just pin on those rich Chinese immigrants by blaming all Vancouver's problems on them. It reeks of discrimmination.

A new 'head tax' for the modern times perhaps?

[casper]

Originally Posted by whatnext

Let me tell you about a little story about this house (crappy photo is mine). I looked at it last time it was listed (somewhere around 2001-2 I think). It was something like $650k which was a bit out of my price range given my resources which were above the average family income at the time ($57k). Flash forward to 2014 and this same house sold in under a week for over the listed price of $1.98 million! Avearge family income today $80k, so incomes may have gone up but prices have gone up way, way above the increase in local earnings. If you can't find the answer locally, look farther afield, it's not rocket science.

So how much of the $1.98 is attributed to the land and how much to the house. AS the population grows the value of the underlying land will keep going up and the "average family" will need to shift their expectations from owning a 100,000 sq ft single family house to perhaps a condo.

There are other parts of BC where a house like that is still affordable because the land is not as scarce.

[spm2013]

I'm waiting for the causality between high-end Chinese restaurants and Vancouver real estate prices.

[red-paladin]

No further vulgar / racist remarks will be tolerated.

[WarrenC12]

Don't forget that people who move here are still paying GST and PST on their new high end cars, gas ,etc. They are paying PTT on those million dollar homes, and so on. I'm all for more consumption taxes to capture some of this money floating around.

[whatnext]

Originally Posted by Vin

Not everyone feels 'screwed over' like you do. Tell that to the many west siders who sold their investments with huge profits, allowing them to retire with ease. Many benefit from those policies too. Name a developer who only builds subsidized housing for the 'down and out'. Name any retailer or restaranteur who goes bust from a higher spending power. Fact is, change those policies if you can, but don't assume that everyone doesn't benefit from them. If the government doesn't rope them in, another country will benefit from their cash. It's happening around the world. The government has just changed some of the policies to make these immigrants stay longer or impose other more stringent conditions before they can get their status. I do agree that more needs to be done to tax offshore tax evaders. And that also includes many well-heeled Canadians with a long history in this country. However, don't just pin on those rich Chinese immigrants by blaming all Vancouver's problems on them. It reeks of discrimmination.

A new 'head tax' for the modern times perhaps?

I don't feel screwed over, I've got my house in Vancouver. I would have liked that one a it more, but that's life. I do feel bad for the younger people who will never be able to afford a house in Vancouver...for no valid economic reason

By that I mean there is nothing in Vancouver's economic fundamentals that has changed over 12 years to justify so many local wage earners being priced out of housing. Have we suddenly aquired a whole lot of high-paying jobs in banking? Record low interest rates do not explain the meteoric rise in prices. I'm sorry people get offended by having the obvious being pointed out. Any good realtor can tell you where the buyers are coming from, why pretend it's not a factor? That governments don't do a better job of monitoring so the facts can be out there in black and white is inexplicable.

It also surprises me that those who get all outraged about suburban sprawl don't see the cause and effect at work - if you can't afford a home for your family in Vancouver/Richmond/Burnaby you get pushed out to farther suburbs. Take a look at the demographic of those driving the rapid development of Langley and South Surrey.

[GMasterAres]

Originally Posted by whatnext

I don't feel screwed over, I've got my house in Vancouver. I would have liked that one a it more, but that's life. I do feel bad for the younger people who will never be able to afford a house in Vancouver...for no valid economic reason

By that I mean there is nothing in Vancouver's economic fundamentals that has changed over 12 years to justify so many local wage earners being priced out of housing. Have we suddenly aquired a whole lot of high-paying jobs in banking? Record low interest rates do not explain the meteoric rise in prices. I'm sorry people get offended by having the obvious being pointed out. Any good realtor can tell you where the buyers are coming from, why pretend it's not a factor? That governments don't do a better job of monitoring so the facts can be out there in black and white is inexplicable.

It also surprises me that those who get all outraged about suburban sprawl don't see the cause and effect at work - if you can't afford a home for your family in Vancouver/Richmond/Burnaby you get pushed out to farther suburbs. Take a look at the demographic of those driving the rapid development of Langley and South Surrey.

I have met quite a lot of people from overseas (not China specifically, but all over) who live in Vancouver renting units because my wife is from overseas. The thing that struck me is when I met them, her friends, etc., every single one of them when they asked where I was from and I said "Vancouver" said and I quote:

Wow I've been here 2-5 years, and you're the first person I've met actually FROM Vancouver

Every single one.

My response was always... "That's because we all live out in the suburbs where we can afford to live."

Now obviously my experiences are not backed by actual statistics, but it just always struck me how true it is and what you said above regarding natives of the area being simply priced out of Vancouver and into the suburbs.

When we went to purchase our townhouse to move up to a 3 bedroom from a 1 bedroom, we looked everywhere. We both combined qualify for a very large mortgage but we also want to live, be able to take vacations, buy a car, and not simply spend the next 25 years, working every day simply to pay off our mortgage then 25 year later realizing we missed 1/4 to 1/3rd of our life.

After determining that, and we actually own 2 other places so we're not "new to the market", the result was we could only buy in Surrey/Langley to remain comfortable.

We looked at places on Cambie for example not far from Oakridge. The townhouses were exactly the same as the one we ended up purchasing in Surrey Central, was the same size, same basically everything including finishing. Only difference was location. Surrey Central vs Oakridge Center.

Oakridge Center townhouse? $950,000
Surrey Central townhouse? $360,000

That to me is outrageous as a region. Is living in Oakridge and Vancouver worth an extra almost $600,000? For those keeping tab, with that extra $600,000 out here in Surrey we could have not only purchased the townhouse, but a nice 5 bedroom 5-10 year old home in a great neighborhood AND the townhouse at the same time.



I quite frankly find that just a bit insane.

[WarrenC12]

Rents are dictated by local income levels. Which means you can afford to live in Vancouver if you are willing to rent... If you subscribe to the social stigma that renters are the scum of the earth, maybe you need to re-evaluate your priorities.

[WBC]

This could be all very easily fixed. Shift tax burden from provincial income tax to property tax (whereas province collects a nice chunk of property tax, but collects no individual income tax). For example - see Texas...

The net result - you want to own an expensive home in Vancouver, declare no income and park your kids here - no problem, however, instead of paying 5K in property taxes you will be now paying let's say 20K in property taxes. This would act to suppress real estate speculation - you want to by 5 apartments and hold them until prices increase? No problem, but pay a hefty property tax every year.

The beauty of this system is that CRA does not need to chase you overseas over not paying your income taxes...You don't pay property taxes they simply foreclose on your property. This would lead to increase in rents, but for renters living and working locally, this would be compensated by removal of the provincial income tax.

Of course, there is about zero chance of this passing as local development mafia would freak out...

[GlassCity]

Originally Posted by WarrenC12

Rents are dictated by local income levels. Which means you can afford to live in Vancouver if you are willing to rent... If you subscribe to the social stigma that renters are the scum of the earth, maybe you need to re-evaluate your priorities.

It's not that. I think buying is better because you're actually getting something–a house. Renting just seems like throwing money away.

[logan5]

Originally Posted by WarrenC12

Rents are dictated by local income levels. Which means you can afford to live in Vancouver if you are willing to rent... If you subscribe to the social stigma that renters are the scum of the earth, maybe you need to re-evaluate your priorities.

LOL, I didn't know such a social stigma existed. Must be a west side thing.

[s211]

Close to a friend's house, this property sold very recently without even being inspected by the offshore purchaser, he was told, at or slightly above the $8M asking price.

http://www.ericlanghjelm.com/6287-ma...al-estate/1012

And we wonder why locals get their backs up against the wall?

[a very long weekend]

really agree with you, whatnext. prices have jumped massively in a few other places (i'm thinking specifically of nyc and sf) but those rises in those places have a real economic reason, booming economies in a recessionary time, along with serious legislated development constraints that have the effect of creating an artificial land shortage. vancouver, it's a huge flow of off-shore money parking in a market that is both objectively desirable to folks here in asia (for immigration, vacation, family and prestige reasons) along with like this almost true sense that vancouver house prices will only ever increase. people who claim that calling attention to mainlanders' role in vancouver's insane prices is racist are out to lunch. like, i've met two people in gz just in the last week who have flats in vancouver.

personally, i think the answer isn't necessarily to tax like crazy, like you could us zoning regs to make housing appeal to locals only. for instance, ban underground parking in the entire west end, like no parking allowance in any new buildings. i could actually see that happening in vancouver, whereas i think we'd have to wait for the ndp to get back in there before you'd see any serious action on taxing off-shore investors or like flippers or whatever.

[logan5]

Here's a colour coded map showing some increases and some decreases in property values in Vancouver. There are a lot of areas showing decreases, with industrial land showing the biggest increase.



http://www.theglobeandmail.com/news/...ticle16600708/

[whatnext]

Originally Posted by WarrenC12

Rents are dictated by local income levels. Which means you can afford to live in Vancouver if you are willing to rent... If you subscribe to the social stigma that renters are the scum of the earth, maybe you need to re-evaluate your priorities.

Or maybe we should just recouple housing prices to local incomes. But hold onto your hats, the worst could be yet to come according to today's Sun:

An investigation by a Hong-Kong-based newspaper into Canada's immigration program for millionaire investors "has revealed the extraordinary extent to which it has become devoted to a single outcome: Helping rich mainland Chinese settle in Vancouver." Sales of Vancouver houses like this rose dramatically in 2013.

Vancouver immigration lawyer-researcher Richard Kurland and an intrepid ethnic Chinese journalist have uncovered an amazing story about how more than 45,000 wealthy Chinese are on a waiting list to come to British Columbia through the country’s investor-immigrant program...
http://blogs.vancouversun.com/2014/0...althy-chinese/

Edited to add: Who said anything about renters being scum? Home ownership is ingrained in our culture and promoted by all levels of government. Therefore, it's not too much to ask those governments to ensure housing remains affordable for local residents.

[Pinion]

Renters aren't scum but my experience with landlords was terrible enough that I chose to buy when I could barely afford to do so.

My building pre-dates this whole mess so it's all working class western European senior citizen immigrants. Not a single Chinese family.

[dleung]

Thanks, Canada I just bought another investment condo last month, except we're third generation immigrants

[punface]

Those 45,000 wealthy Chinese might be too late if rumours about tomorrow's budget are correct:

The Conservative government is scrapping Canada’s decades-old immigrant investor program in the 2014 budget, ending a path to citizenship that has been criticized for allowing foreigners to buy their way into this country without generating sufficient long-term benefit.

http://www.theglobeandmail.com/news/...ticle16792106/

Some pretty surprising numbers in that story:

A source said the government is acting based on data that show that, 20 years after arriving in Canada, an immigrant investor has paid about $200,000 less in taxes than a newcomer who came in under the federal skilled worker program, and almost $100,000 less than one who was a live-in caregiver.

[Pinion]

Originally Posted by dleung

Thanks, Canada I just bought another investment condo last month, except we're third generation immigrants

How'd you get so wealthy?

My father in law has 8 investment properties but he's Irish so unless it's the 1800s it's passé to blame him.

Also he bought them when houses in Shaughnessy were 30k.

[dleung]

Originally Posted by Pinion

How'd you get so wealthy?

My father in law has 8 investment properties but he's Irish so unless it's the 1800s it's passé to blame him.

Also he bought them when houses in Shaughnessy were 30k.

I'm actually dirt poor since my work barely pays, but my folks like to make it rain every Chinese New Year...