Chinese Investors Driving Up Metro Housing Prices

[cornholio]

Originally Posted by geotag277

I already responded to you in your other housing bubble thread:

http://www.thestar.com/news/canada/2...mic_class.html

http://www.theglobeandmail.com/news/...ticle16821623/

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

"It will be replaced by two pilot projects: an immigrant investor venture capital fund and a business skills program. Tens of thousands of those who have applied to the program and are currently on the waiting list will have their fees refunded – but will not have their applications processed."

"In tabling his annual report to the Parliament Monday, Immigration Minister Chris Alexander also announced that Ottawa will admit between 240,000 and 265,000 permanent residents to Canada in 2014, the same level as this year."

"While economic immigrants — those selected for their occupational skills, entrepreneurship and investment — will account for 63 per cent of the admissions, 26.1 per cent or 68,000 spots will be allotted to the family class. The remaining 10.9 per cent or 28,400 spaces will be for refugees and others with humanitarian needs."

No current programs replace the investor immigrant program. They are all very different and most of the people that wanted to come here through the investor class immigrant program will either not qualify or not bother.

[geotag277]

Originally Posted by cornholio

No current programs replace the investor immigrant program. They are all very different and most of the people that wanted to come here through the investor class immigrant program will either not qualify or not bother.

They are all different, but as the Government of Canada says, they expect to let the same number of people in through those programs in 2014 as they did in 2013. The number of immigrants is remaining constant, and the % of investor immigrants will remain the same.

How do you expect that to impact the housing market negatively?

[spm2013]

Another interesting aspect of the program:

B.C. received 2,622 investor immigrants in 2012, 28 per cent of the Canadian total, according to Citizenship and Immigration Canada. That’s down from 5,867 in 2008, when B.C. constituted just over half of the national total.

Part of the reason for B.C.’s smaller share in recent years could be that Quebec runs its own parallel investor program, which accepts more people than Ottawa’s and has a quicker, easier approval process. Alexander and Kenney have both complained that a majority of the Quebec applicants who pay their fees and invest their money in Quebec end up living in — and using the social services funded by taxpayers from — Ontario and B.C.

It’s a perception shared by immigration experts in B.C.

“There’s a certain sentiment that it’s an unfair program because it gives Quebec a fiscal advantage which none of the other provinces have, to the same scale,” said Matthew Sell of Vancouver-based CIP Immigration Consulting.

Tuesday’s budget announcement does not affect Quebec’s program, but Kurland said the flow of immigrant investors to B.C. will nevertheless slow to a trickle because of stepped-up federal efforts to crack down on province-of-destination rules as well as new citizenship eligibility criteria.

• The federal government is expected to generate $100 million in new tax revenue by the end of 2018-2019 by eliminating the five-year tax exemption that’s allowed wealthy new immigrants to avoid paying taxes on offshore assets.

http://www.vancouversun.com/news/Ott...#ixzz2t8LbKIri

[cornholio]

Originally Posted by geotag277

They are all different, but as the Government of Canada says, they expect to let the same number of people in through those programs in 2014 as they did in 2013. The number of immigrants is remaining constant, and the % of investor immigrants will remain the same.

How do you expect that to impact the housing market negatively?

Of course the same number of people will come through, but not the same number of multi millionaires. How will that impact housing? For one we won't be getting thousands of people coming in every year that can each buy a couple houses for cash without ever working here, or paying real taxes here. One of the main causes of our housing bubble has now been removed, you betcha it will impact housing prices.

[cornholio]

Originally Posted by spm2013

Another interesting aspect of the program:





http://www.vancouversun.com/news/Ott...#ixzz2t8LbKIri

The Quebec program is interesting because within 5 years of arrival only some half the investor class immigrants still live in Quebec, based on the paper I posted a couple pages back. Many of them have ended up in BC.

Hopefully Quebec smartens up and follows the lead, I do think they will but we will see.

[GMasterAres]

Originally Posted by 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/

You decrease a $1.2 million home by 25%, it is still $900,000 and to me still more than it probably should be given the home we're talking about. Vancouver would need a 50% decrease a few years in a row to drop back anywhere near the suburbs in price.

[Porfiry]

Originally Posted by whatnext

OK, so your "solution" is to sell of the best pieces of land to foreign gentry and let the the locals can cram themselves into little boxes. But that's "green" isn't it. Memo: not everyone's a single male.

I support the free market.

[spm2013]

I'm waiting for the thread: Chinese sellers killing Metro Vancouver Housing Prices. Blame them going up and blame them going down.

[Pinion]

Originally Posted by Porfiry

I support the free market.

People still say "free market" seriously?

Vancouver 2040 under the glorious free market


womennewsnetwork.net

Hope you're lucky enough to be born into a wealthy family because there isn't anything free about it.

[Xerx]

Originally Posted by Pinion

People still say "free market" seriously?

Vancouver 2040 under the glorious free market


womennewsnetwork.net

Hope you're lucky enough to be born into a wealthy family because there isn't anything free about it.

Or it might look more like Tokyo, which has very little regulation on density.

Unregulated Density: Japan

Japan, the undisputed king of urbanization with the most populous urban area on earth, has found a particularly laissez-faire solution to high housing prices: Let anyone build pretty much anything wherever they’d like. From the days of the Tokugawa shogunate, when fires were accepted as a fact of life and no special planning effort was made to prevent them, to the 20th century when small factories were allowed to proliferate in residential neighborhoods, Japanese planners have acted with a light touch, restricting building heights in the densest areas but otherwise letting cities sprawl as far as the (now mostly private) commuter railways would take them.

Stephen Smith Nextcity.org

[spm2013]

Vancouver 2040 will be underwater and controlled by dolphins.. =

[cornholio]

http://www.cbc.ca/news/canada/british-columbia/b-c-property-market-hazy-after-millionaire-visa-scrapped-1.2533006

"Most of the buying is coming from Chinese immigrants who are wealthy, so if we make it difficult for them to come into this country, we have killed 80 to 90 per cent of the buying in West Vancouver."

Immigration lawyer Richard Kurland agrees.

"When you suddenly stave off the intake of literally hundreds of millionaires in the Vancouver property market, prices can only go one way and that's down," said Kurland.

So the real estate agents knew the scope of the problem? Surprise surprise. hehe

[Pinion]

Originally Posted by Xerx

Or it might look more like Tokyo, which has very little regulation on density.

Stephen Smith Nextcity.org

Using one of the most protectionist, anti-immigration countries in the world as your example is interesting. We weren't talking about zoning, btw.

[spm2013]

Well just like closing the viaducts, you actually have to do things to see the results. So we will see what happens and enjoy the show.

[Porfiry]

Originally Posted by whatnext

OK, so your "solution" is to sell of the best pieces of land to foreign gentry and let the the locals can cram themselves into little boxes. But that's "green" isn't it. Memo: not everyone's a single male.

There's no shame in living in a condo. Many people prefer that lifestyle. If you don't, commute to the suburbs. There's no shame in that either. If you must have the big house and lot in the city, work your way up the property ladder and earn it (like everybody else).

[whatnext]

Originally Posted by Porfiry

There's no shame in living in a condo. Many people prefer that lifestyle. If you don't, commute to the suburbs. There's no shame in that either. If you must have the big house and lot in the city, work your way up the property ladder and earn it (like everybody else).

Maybe some do, many more simply settle for a condo in this unaffordable environment. Studies show the SFH is still the most desired form of home: http://www.vancouversun.com/business...#ixzz2P2xHAqjt

Why you sneer at them, and think working folk should be banished to the 'burbs is mystifying, considering you paint yourself as environmentally aware. Given that the three biggest job centres (UBC, YVR and downtown) are adjacent to the City of Vancouver, pricing the bulk of working families out of all houses west of Fraser is odd. You would rather they be forced to commute, while non-working astronauts enjoy the city homes?

And here's a newsflash, a house on a standard 33' foot lot is not a "big house". And most were quite small until offshore buyers began knocking them down for more ostentatious piles. Up until 10 years ago they were within reach of working families, you haven't adavanced any credible argument to show the local economy now should drive such prices as we see now.

[GlassCity]

Originally Posted by whatnext

Maybe some do, many more simply settle for a condo in this unaffordable environment. Studies show the SFH is still the most desired form of home: http://www.vancouversun.com/business...#ixzz2P2xHAqjt

Why you sneer at them, and think working folk should be banished to the 'burbs is mystifying, considering you paint yourself as environmentally aware. Given that the three biggest job centres (UBC, YVR and downtown) are adjacent to the City of Vancouver, pricing the bulk of working families out of all houses west of Fraser is odd. You would rather they be forced to commute, while non-working astronauts enjoy the city homes?

And here's a newsflash, a house on a standard 33' foot lot is not a "big house". And most were quite small until offshore buyers began knocking them down for more ostentatious piles. Up until 10 years ago they were within reach of working families, you haven't adavanced any credible argument to show the local economy now should drive such prices as we see now.

I don't question the fact that lots of people prefer SFH's, but I hate when people make urban living out to be something horrible that people only do because they can't afford an actual house.

Plus people always pretend that people with an urban agenda are killing the city, when in reality it's just hard to fit 2.5 million people in such a small area. Not everybody can live in a SFH. Like you said, the 3 largest employers are attached to the City of Vancouver ,so it makes sense to fit as much population as you can in there.

[spm2013]

You shouldn't reference stupid little surveys from the real estate board with dumb questions to prove a simple fact that people prefer larger residences than smaller residences.

[spm2013]

Some more fuel for the fire.

The federal immigrant investors program was, in theory, a policy designed to lure rich foreigners to Canada. The way it played out in practice was mainly to lure rich Chinese to Vancouver.

So the decision announced Tuesday in the federal budget to pull the plug on it is, understandably, creating a lot of buzz in this city where speculating about real estate prices — if not actually speculating in real estate — is a major preoccupation.

It’s impossible to find hard numbers on how many immigrants buy homes in or near the city, and where they buy, and how much they pay.

But anecdotes abound. And you need only to drive around some of the tonier parts of the city, or talk to real estate sales people there, to understand that immigrants are big players in some neighbourhood real estate markets.

So it’s reasonable to speculate that cutting a program that most recently was bringing more than 2,500 well-heeled newcomers to B.C. every year could have an effect on high-end house prices. But how much impact is open to question, and it might be less than some people assume.

For one thing, not all of these immigrants buy individual homes — the number of households they represent could be just half, or even a third of the total number of the immigrants.

For another, the number of investor class immigrants coming to B.C. in 2012 was already down sharply. It’s less than half the recent-year peak between 2008 and 2010. Yet house prices, which stalled, then dipped during that three-year span, have rebounded smartly, even as the number of investor immigrants has gone steadily down. Prices at the high end of the market held up particularly well.

This suggests to me that there’s lots of demand unrelated to this one aspect of immigration.

If you look at the broader housing market in Metro Vancouver, the number of home transactions — about 30,000 a year north of the Fraser, and 45,000 a year on both sides, according to the B. C. Real Estate Association — is simply too large to be affected very much by a few hundred sales.

Tsur Somerville of UBC’s Centre for Urban Economics and Real Estate notes that Ottawa seems to be shifting the focus of its immigrant recruitment efforts from wealth to skills, and this could have longer-term implications for housing in Metro Vancouver.

Again, there are no take-it-to-the-bank numbers to crunch, but it seems reasonable to assume that skilled immigrants will be younger and more price-conscious than wealthy investors who arrive on our shores. So they’ll be more apt to look for condos or town houses than pricey single-family homes in leafy old neighbourhoods.

But it strikes me this isn’t an immigration issue, this is about economic growth. As long as Metro Vancouver continues to be a place where people want to live, they’ll want homes, and they’ll bid up the price. It doesn’t matter if they move here from Mississauga or Manila, Sherbrooke or Shanghai.

Lower-end homes have some price protection — not much, if recent history is a guide — by virtue of the fact that it’s reasonably easy to build more of them. Greater supply will always ease pressure on the price.


This is not the case with high-end single-family houses, however. For those who want to live in such a home in or near the heart of the city, there are no inviting places left to build. The only choice starts out the same way — buy an existing house, and then decide to live in it, or to tear it down and rebuild.

So this week’s dramatic change in immigration policy could conceivably create a blip in the prices for these kinds of homes. But the long term trend will be determined by the number of people who want to live here — regardless of where they come from.

http://www.vancouversun.com/opinion/...775/story.html

[SFUVancouver]

Here's a question, Whatnext: what would it take to make detached houses in the City of Vancouver affordable to moderate income households?

The median Metro Vancouver household income is $63,347 (2011, Metro Vancouver stats) and the current Canadian standard for shelter affordability is no more than 1/3rd of a household's pre-tax income going to the cost of housing. Of course there are variables: down payment; interest rate; home insurance; utilities; etc.; however we can take a stab at the basics. If the median household managed to save $25,000 for a down payment and has good enough credit to qualify for a low mortgage rate, say 3.5%, then they can afford about $1,700 a month in mortgage costs and may purchase a home worth about $260,000 while still falling into the 'affordable' housing cost range. I can't think of a scenario where detached homes in the City of Vancouver, being finite in number and geographically well located within the region, will ever come down to even double that figure, much less within reach of median income households.