Chinese Investors Driving Up Metro Housing Prices

[a very long weekend]

Originally Posted by nds88

Vancouver might be expensive per square feet compared to other North American cities, with only a handful that are close (Manhattan, San Fran), but on a global scale it doesn't even come close to many other international cities.

so your contention is that vancouver is a world economic center and that, as such, the housing prices you have up there represent good value?

[st7860]

Originally Posted by Kisai

If the interests rates start rapidly climbing, you will certainly see a cooling off of the property market. That's why everyone is trying to build as much as they can now while the rates are low.

So you mean most of the purchases are from locals right?

[Pinion]

Originally Posted by jhausner

There's lots of rental units available that are affordable. Want to rent for less than $500 a month, many many units outside of Vancouver available for that price. Heck even 2 bedrooms on your own for that price next to SkyTrain!

Nobody ever has the balls to blame un-realistic expectations on the part of low-income earners and their advocates. My family qualifies in the high-income bracket yet I wouldn't even imagine living downtown or in much of Vancouver and still have enough money left to live life. Yet I hear constantly by low-income advocates and earners that they should have "affordable" rents in False Creek or prime water-front areas next to $1.5 million yachts.

Do what high-school students need to do when they graduate and want to move out on their own. Move out to the suburbs where you can afford to live, start saving your pennies and earning some equity, and in 10 years move up the ladder. The days of $200,000 homes in Vancouver are gone and will NEVER come back ever. EVER. I hate the hand-out expectation society we seem to live in. Hell there are more blue-collar jobs and affordable housing availability out in the burbs especially South of Fraser.

A person earning around the poverty line shouldn't expect to live right in central London or have an apartment in Manhattan next to Central Park let alone be given cheap housing in False Creek. Hell there are affordable houses and rents in East Vancouver towards the Burnaby border and in every other metro-Vancouver city.

I happen to think a large issue in this discussion is focussing so much on Vancouver like it is an island in the middle of the Pacific Ocean. As much as we aren't a huge amalgamated city like Toronto or Montreal, Vancouver is really the sum of Metro-Vancouver and we are really a region not a single city. From a real-estate standpoint that is reflected.

So when people cut lines at the Vancouver border and look at stats exclusively within those borders, they are cutting out a huge piece of the puzzle that is the rest of the region. We talk about regional transportation this, and regional police that, and regional everything else, but when we hit the topic of real-estate, the blinders go on and the entire puzzle is out of sight.

Does Vancouver proper have affordable housing available? Yes though not much. Why? Because the surrounding cities are where the affordable houses are and that's because we are a region not a single island city. You want to afford your first home or get cheap rent? Time to move to Surrey, Langley, Coquitlam, Burnaby, anywhere else, save your pennies, and stop blaming the evil foreigners. And this coming from a white guy born and raised in metro-Vancouver.

I looked as far out as Langley for a place and the price drop was not significant enough to justify the huge increase in car expenses required to live out there. My job and my wife's job are on the north shore.

The idea that high prices are contained to Vancouver proper's borders is absurd, and if I could get a new townhouse for $450,000 anywhere near my work I would in a flash. Just because you are ok with living in literally the worst part of the Fraser Valley doesn't mean everyone should be. And if they were ok with it, your cheap cost of living would go away.

[st7860]

Some people say that Vancouver has so many buyers because its consider(omg) inexpensive compared to other major cities....

[Vin]

A city with insufficient land and still Vancouver has the absurd policies like view cones, shadows, etc. No wonder city of Vancouver is so unaffordable. And residents who don't want anything to be built in their neighbourhoods only know how to blame Chinese immigrants and other rich foreigners, lol. It's a case of jealousy more than anything else. People expect others to be in their own situation, or worse off. "I love my run-down shack, so anything bigger or nicer should not be allowed because it is not 'the way of life here'".

[Vin]

Originally Posted by st7860

Some people say that Vancouver has so many buyers because its consider(omg) inexpensive compared to other major cities....

Traditionally, locals are too laid back and only rely heavily on tourism and natural resources to run the economy. In the new century, we are opened up to the rest of the world and apparently many locals are losing to the competition from people of more competitive economies coming to settle here. We can choose either that or still be a backwater town on the west coast. Despite desperately needing the foreign funds and allowing foreigners to settle here, housing policies in Vancouver hasn't moved on with the times, and that's why we have this huge crunch now.

[trofirhen]

Originally Posted by st7860

Some people say that Vancouver has so many buyers because its consider(omg) inexpensive compared to other major cities....

I think there are two things to consider here:
First, it is true that there are now many buyers willing to pay top dollar for a house here, often for investment purposes, thereby keeping the market relatively expensive,
too expensive anyway for a city without a strong core economy, like Seattle.

Regarding other cities being more expensive, it's flatly true:
Tokyo, London, NYC, SF, HK, Chigago, Milan and others are considerably pricier than we are, at least in the central, or pleasanter parts of the city.

The critical difference between these cities and Vancouver is that not only are they diversified economically, and all larger than Vancouver. They are all global hubs.
Vancouver is not.
It is a Beta city, the others are all Alpha Cities.
Vancouver has an element of the Riviera, Canadian Style. a bit more like the south of France, only with a more important global city
ranking for than Nice is to the Côte.
There, it can get super-expensive, and has been so for decades. Stacks of money in banks, and big time $$$$$ real estate. Owners sometimes absent, sometimes present year-round

Vancouver?
No, not there yet, but getting the motors revving.

This is bad if the city relies too much on its "resort," Hollywood North character for revenue. * * *This is great if a real core economy could be created around all that.

sssh {We have some pretty advanced medical infrastrucure already. Pharmacology, anyone?}........................................
(sorry, but this all synthesizes together; get a core economy going, wages go up. Wages go up, buying is a more a feasabilty.)

[204]

Originally Posted by jhausner

Another big contributor is a land-locked city

Landlocked does not mean what you think it means...

landlocked
/ˈlændˌlɒkt/
adjective
1.
(of a country) completely surrounded by land
2.
(esp of lakes) completely or almost completely surrounded by land
3.
(esp of certain salmon) living in fresh water that is permanently isolated from the sea

[nds88]

Originally Posted by a very long weekend

so your contention is that vancouver is a world economic center and that, as such, the housing prices you have up there represent good value?

No, we are not on a global economic powerhouse level like Manhattan or London. But that doesn't matter entirely. Vancouver is consistently ranked as the 1st, 2nd or 3rd most livable city in the world. People have different opinions on what defines "livable", but for simplicity sake, many people would interpret this ranking as the "best" overall cities on the planet to live in.

If you want the best cars, clothes, food, service, technology etc., you have to pay. Why would it be any different for the real estate pricing of a city? If you want to live in the best city in the world, you have to pay. If you don't pay, someone else will outbid you.

We live in a globalized world now and its only going to get more globalized as time goes on. A few decades ago, which a large percentage of the population grew up in, were part of this "larger" world. Too many people are stuck in this mindset and need to realize our economic borders have opened up. You have to compete on a global scale or get left behind. Local incomes don't matter anymore.

The problem with Vancouver statistics are that they are skewed. The data shows that the average real estate prices vs incomes reported is the second highest multiple after Hong Kong. Many of these foreign property owners that pay 4 million cash for a Vancouver Westside home don't make their money in Vancouver. The wife and kids live in Vancouver as permanent residents and do all their shopping, dining etc locally. The dad makes mountains of cash overseas. This doesn't get reported (this is a whole different discussion topic in itself). So instead of a million dollar income being used as data, it shows a poor family living in a multi million dollar home. Do this a few thousand times and now the data shows a really high property price with low incomes.

The reality is quite different. We can't say local families can't afford their housing. These local families (although not native Vancouverites) can more than afford their housing, its just not being reported properly. You can definitely argue that the native Vancouverite is becoming outbid outbid, but that's the way the market works now. We buy things off "China" (or other places that sell us things), China buys things off us.

So yes, Vancouver is good value on a global level. It is the 2nd "best" city to live in, yet is ridiculously "cheap" per square foot compared to the top 10 most expensive real estate in the world. As long as we maintain the "best" city to live in, our prices will continue to get even higher as we begin to catch up. Also, as we eventually (or hopefully) become a bigger player and develop a more core economy, native Vancouver wages should rise and prices further increase. You definitely can't be the average Vancouverite to afford the real estate now, so my advice is to earn your income beyond the local economy and become a global earner.

[AudiA3]

Monaco is much more expensive than Vancouver, stop complaining guys.. Try affording one of these..

[Pinion]

Originally Posted by AudiA3

Monaco is much more expensive than Vancouver, stop complaining guys..

People are just making joke posts now right? Like saying the most ridiculous thing they can think of?

[st7860]

A lot of people are surprised when I tell them that a few years ago the #1 female bmw salesperson for that year, in the world was based in richmond bc.

[Vancity]

I agree that while Vancouver is expensive to live in, try living in HK, Tokyo, NYC, London, etc. These are, as another poster mentioned, alpha cities. They are global cities. Vancouver's not quite there yet, but can you imagine what real estate prices will be when that day arrives? With a more robust, and diverse economy? If it's off the roof now, it's going to be off the planet when that day arrives.

Vancouver's still quite "affordable" compared to some other cities around the world. And people are still wanting to come here to live, work and play. We're a growing city, and what comes with that is demand, demand, demand. Which means higher prices for just about everything :/

[Klazu]

Information on the new "Investor Program".

Cash for citizenship aimed to boost Canadian economy

Canada will accept 500 immigrant applications from millionaires and their families who can invest at least $2 million in the country. But only 60 of the 500 applications, which must be filed by Feb. 11, will be approved.

The new Venture Capital program replaces an old one critics dubbed the “cash for citizenship” program because it was found to be riddled by fraud, local media reported. The idea is to lure international investors whose investments will boost the Canadian economy.

“This pilot program is designed to attract immigrant investors who will significantly benefit the Canadian economy and better integrate into our society, which will contribute to our long-term prosperity and economic growth,” Immigration Minister Chris Alexander said in a written statement.
Each applicant must make an investment that has risk with no guaranteed return on the $2 million. The money has to be invested over approximately 15 years into a fund operated by BDC Capital, which falls under the umbrella of the government’s Business Development Bank of Canada.

The new program represents a revamp of the old wealthy investor immigration regulation that was scrapped in June 2014.

“Under the former immigration investor program, immigrant investors had to invest $800,000 in Canada’s economy in the form of a repayable loan without meeting skills and abilities requirements of most of Canada’s economic immigration programs,” the government announced in a public statement. “Research indicated that immigrant investors under the previous program were less likely than other immigrants to stay in Canada in the medium to long term. Also, they contributed relatively little to the economy, earning very little income and paying very little tax.

But the new program is not a hit with everyone. When plans to implement the program were announced last December, the South China Morning Post of Hong Kong called the program a “tiny scheme (that) would thwart 45,000 rich Chinese who were dumped from (the old) investor immigration queue.”
The scrapping of the old program resulted in a lawsuit brought by more than 1,000 wealthy immigrants waiting for permanent residency.
Last June, a Federal Court judge ruled against the plaintiffs.

The new millionaire migration program will also require applicants to undergo intensive background checks and scrutiny by private-sector forensic accountants and auditors, according to tendering documents on a government procurement website.

The documents on the procurement website point to a new thorough and extensive examination process being implemented by Citizenship and Immigration Canada, aiming to ensure that all the wealth invested under this scheme is lawfully obtained by applicants. In addition to financial audits, applicants will also be investigated for any possible history of criminal activity or problematic political involvement.

Experts believe that this increased scrutiny might pose problems for potential investors from certain countries, the SCMP reported. The Investor Immigration Program had become increasingly popular among citizens of Hong Kong and China, thousands of who migrated to Canada in the past 28 years. However, a deluge of applications led Canada to discontinue the program last year. At the time, about 60,000 applications were pending and had to be cancelled. Under the program, each applicant was required to provide at least C$ 800,000 as an interest-free loan to the Canadian government in exchange for permanent residency in the country.

The new IIVC is the government’s promised replacement, although it has been criticized as being completely insignificant because its small quota does not even begin to meet the high demand from Chinese investors. “What I was told was that this was a pilot project for 50 spots. The only reason they are rolling it out at all is because it was mentioned in the budget that they would, so they had to go ahead with it,” said a source from immigration industry, reported the SCMP.

The stringent checks and appraisal conditions for the program have been introduced seemingly because of China’s complaints that immigration programs such as Canada’s IIP had been helping Chinese criminals escape the country. China’s foreign ministry has even accused American and Canadian authorities of not repatriating fugitive Chinese businessmen and individuals. The Chinese government further believes that the US and Canada are the most preferred destinations for white-collar criminals fleeing China.

Immigration Canada has also warned that any lack of cooperation from the applicant which hinders the audit work will be noted as well. The final audit report is given to the applicant who in turn would have be submit it along with the complete application form. This way applicants would have the chance to cancel their applications in case the audits reveal something that puts them in an unfavorable light, like dubious finances or criminal activities.

http://asianpacificpost.com/article/6694-cash-citizenship-aimed-boost-canadian-economy.html

[st7860]

There are many better ways for people from any country to come to Canada anyway.

[trofirhen]

This is puzzling indeed. I thought the Investor Immigrant program was discontinued a while back. This seems a reincarnation of it, in an altered form. Correct me if I'm wrong.

http://www.theglobeandmail.com/news/poli...igrant-programs-closure/article16821623/

[st7860]

Read some of the amusing comments on the globe and mail article. lots of jealous people lol

[Spork]

$120m for BDC is excellent. I am not familiar with all of their work, but they certainly have more of an open and innovative presence than other economic development branches of the federal or provincial governments. They should deal with the "insufficient supply" by creating an auction model.

The top 60 applicants in terms of money given to the BDC should have their applications float to the top of the pile. Therefore the BDC can maximize their investment fund while capturing maximum "willingness to pay". If you're going to sell citizenships, may as well get the most you can.

[whatnext]

Originally Posted by Vin

Traditionally, locals are too laid back and only rely heavily on tourism and natural resources to run the economy. In the new century, we are opened up to the rest of the world and apparently many locals are losing to the competition from people of more competitive economies coming to settle here. We can choose either that or still be a backwater town on the west coast. Despite desperately needing the foreign funds and allowing foreigners to settle here, housing policies in Vancouver hasn't moved on with the times, and that's why we have this huge crunch now.

LOL, yeah we should make our economies more competitive by removing pesky things like environmental and labour laws.

Every cheap piece of 🞵🞵🞵🞵 spewed out of China should be subject to an environmental levy to ameliorate the damage done to the environment in producing it. Pretty easy to amass a fortune when the government cracks heads of workers and gives you carte blanche to soil the planet.

[trofirhen]

Originally Posted by whatnext

LOL, yeah we should make our economies more competitive by removing pesky things like environmental and labour laws.

Every cheap piece of 🞵🞵🞵🞵 spewed out of China should be subject to an environmental levy to ameliorate the damage done to the environment in producing it. Pretty easy to amass a fortune when the government cracks heads of workers and gives you carte blanche to soil the planet.

+1 agreed