Canada's 'housing bubble' deemed close to bursting

[dleung]

Originally Posted by cornholio

And the truth finally comes out.
You obviously think very highly of your self, may I ask how your "folks" earned their cash? And what do you consider getting here the normal way? I would also be curious to know if you think your folks have contributed anything to Canadian society, be honest.

My dad's a unionized contractor, we bought the family house when it was $400K, and we contribute about $3-5K to charity around every thanksgiving... while "hiding behind our high gates and hedges" and siphoning funds back to Red China, of course.

[Xelebes]

Guys, can we move on past this xenophobic jibberish? Because it is getting to the point where users are being chased away and as a moderator, I have to step in. Let's move the discussion away from this interrogation.

[hipster duck]

Originally Posted by Kitchissippi

You seem to have this romantic notion that money has some sort of ultimate patriotic goal. It doesn't. You've bought into a new Manifest Destiny that the western world, the USA in particular, somehow has the sole right to control and run the global economy.

I certainly wouldn't call the USA's two-flavoured politics a true democracy, it's a boring football game that the world is forced to watch.

Best line in this entire thread.

[red-paladin]

Originally Posted by Xelebes

Guys, can we move on past this xenophobic jibberish? Because it is getting to the point where users are being chased away and as a moderator, I have to step in. Let's move the discussion away from this interrogation.

[ssiguy]

Only a true economic collapse or earthquake will lead to a Vancouver housing collapse.

Vancouver is a very socially and economically straified city, by far the most in the country and it wants to stay that way. Also Vancouver has little in the way of an economy went compared to the price of it{s real estate. Foreign buyers are keeping the housding activity and prices high and for city that has little other than real estate to rely on that is a gold nugget they cannot refuse. This is especially true when developers are the single largest political backers.

Vancouver is like Miami or Phoniex.............it{s housing was not a reflection of a strong economy but quite the opposite..............the strong real estate market is the backbone of the economy. Vancouver business people and politicians know this and will do absolutely anything to keep the real estate market going including accepting dirty foreign money or complete destruction of whole neighbourhoods requiring nothing more that at one time 10 minute visit to City Hall for the permit. Tearing down a houses [s] is as easy in Vancouver as buying a bus ticket.

Real estate has become the foundation of the Vancouver economy and now it can{t be stopped or the consquences would be devestating. Any politician who advocates such would be akin the the Mayor of Windsor advocating the closure of auto plants. Problem is one produces real economic growth and the other is money flipping.

All of this is not helped by Vancouverites peculiar indifference to its history. Vancouverites, in general, have no respect or at least a complete apathy towards historical structure or neighbourhoods. If the Plateau, Cabbagetown, Mount Royal, or Sandy Hill would have been in Vancouver they would have long since been flattened.

The sad thing [and reality] is that the wholesale destruction of thousands of homes and whole communities will continue in Vancouver and as far as City hall and most Vancouverites are concerned, the carnage cant happen fast enough.

I am writing this from beautiful Oaxaca Mexico. A wonderful historic city and I am so glad that Vancouver planners and politicians aren{t runniung this city or they would have flattened it and then proudly proclaim all the bland new houses and condos have renewed the city and saved it from it{s non-livability.

[st7860]

Originally Posted by ssiguy

Foreign buyers are keeping the housding activity and prices high

Foreigners are only 2.4% of the market
http://www.cbc.ca/news/business/condo-foreign-ownership-less-than-2-4-cmhc-says-1.2874899

[hipster duck]

Originally Posted by ssiguy

Real estate has become the foundation of the Vancouver economy and now it can{t be stopped or the consquences would be devestating. Any politician who advocates such would be akin the the Mayor of Windsor advocating the closure of auto plants. Problem is one produces real economic growth and the other is money flipping.

Assuming that condo developments are purchased by foreigners (some are, but most aren't), wouldn't new condo construction be akin to an export product?

Think about it: you hire hundreds of skilled Canadian labourers and pay them decent wages to build a condo tower that is paid for with foreign cash.

From an export standpoint, this isn't much different from building a Chrysler in Windsor and selling it to the Chinese.

[st7860]

Originally Posted by hipster duck

Best line in this entire thread.

Its an interesting thing to see the US described as a football game.

In addition, Vancouver is a very egalitarian city, typically the most laid back in the province. Foreigners are doing nothing in Vancouver except wandering around as tourists. Its rare that foreigners buy in Vancouver. Canadian real estate is considered to appreciate too slow compared to what foreigners are used to. It would be silly for a foreigner to buy property in Vancouver as only citizens and permanent residents get a tax free exemption for their own residence. Vancouver is not like Miami, Phoenix, or most of the US, where property taxes are much higher.

The joyful thing, and truth is that Vancouver is undergoing so much renewal. With coach houses over here, Row housing soon to come over there, etc.

Its common knowledge that most crime in Vancouver is property crime(stolen phones, computers, auto theft, etc) and that violent crime is rare. A few years ago the Canadian Government introduced a visa requirement for an unamed country because thousands of its citizens were overstaying their visa's in Vancouver, Toronto, etc.

[someone123]

Originally Posted by hipster duck

From an export standpoint, this isn't much different from building a Chrysler in Windsor and selling it to the Chinese.

I think land sales are dramatically different, because land is a limited, necessary resource and land owners become permanent rentiers under our system of property rights. Canada is also a small country with a limited supply of good land, so it's easy for people from bigger countries to buy up the best areas.

If foreign buyers eventually came to own a significant portion of the most valuable land in Canada I think the consequences for economic opportunities for locals would be pretty terrible. Vancouver already has relatively poor economic opportunities for locals (of any ethnicity) who don't benefit from property ownership in some way. If you're just an average person here living off of your labour and you and your family own no property, this town 🞵🞵🞵🞵🞵 right now.

Condos built on leasehold land would be more analogous. Or your car example could be tweaked to include a share of the factory and the mines necessary to produce the exported good; that's what condos are like.

Originally Posted by st7860

In addition, Vancouver is a very egalitarian city, typically the most laid back in the province. Foreigners are doing nothing in Vancouver except wandering around as tourists.

What evidence do you have that this is true? If Vancouver is so egalitarian, why does it have the second-highest child poverty rate in Canada when enough money is sloshing around to pay for million-dollar homes?

[st7860]

Originally Posted by someone123

I think land sales are dramatically different, because land is a limited, necessary resource and land owners become permanent rentiers under our system of property rights. Canada is also a small country with a limited supply of good land, so it's easy for people from bigger countries to buy up the best areas.

If foreign buyers eventually came to own a significant portion of the most valuable land in Canada I think the consequences for economic opportunities for locals would be pretty terrible. Vancouver already has relatively poor economic opportunities for locals (of any ethnicity) who don't benefit from property ownership in some way. If you're just an average person here living off of your labour and you and your family own no property, this town 🞵🞵🞵🞵🞵 right now.

Condos built on leasehold land would be more analogous.



What evidence do you have that this is true? If Vancouver is so egalitarian, why does it have the second-highest child poverty rate in Canada when enough money is sloshing around to pay for million-dollar homes?

Hmm

If you don't have a high income: you pay a discounted price for your medical insurance and prescriptions no matter who you work for. If you have a job and a child, you get assistance with paying rent(not welfare). City recreational services are free or discounted(swimming pools, various lessons, etc).

Rents increases are usually limited to under 3% a year. If your landlord sells the place you live in the new owner has to not only give you notice but pay you a months rent as compensation.

If you need vocational education and have a job or are self employed, your tuition will be either very low or non existent.

You don't need a car and have a wide range of employers/recreational opportunities to chose from by transit.

[someone123]

Those are examples of things that might or might not help with equality. MSP is one example where the province has made an exception in charging a fee that a lot of other places don't charge at all. Rent control may or may not be a good thing; if you're a young person looking for an apartment, you pay a market rate that must account for the subsidy of longtime apartment residents.

To say whether or not a place is egalitarian you need to look at whether or not there actually is equality of opportunity and standard of living. Vancouverites may be aiming for that, but if the child poverty rate is still up around 14% then they have not achieved it. A society that has lots of wealth but high poverty rates has a poor level of equality.

[hipster duck]

Originally Posted by someone123

Vancouver already has relatively poor economic opportunities for locals (of any ethnicity) who don't benefit from property ownership in some way. If you're just an average person here living off of your labour and you and your family own no property, this town 🞵🞵🞵🞵🞵 right now.

I'm a person who doesn't benefit from property ownership and lives off of my labour, and I think Vancouver is a pretty easy place to live in.

If I insisted on buying a property to live in, sure, it would be tough. But, as a renter, things are pretty good. My rent is much lower than it was in Toronto and, more importantly, it goes up at very modest rates.

I don't regret being shut out of homeownership. I have other investments, and if I really thought that property ownership was such a worthwhile investment, I could always invest in property in another city.

[WhipperSnapper]

Always amazed by the surprisingly low rental rates in Vancouver. Rental stock sells quickly for good money too.

One could say too that real estate is the backbone of Toronto's economy. Tens of thousands of Torontonians have become cash rich over the last decade.
A bust would be absolutely devastating however, the tens of thousands that got in early and have been flipping real estate for the past 10 years have little to worry about and neither will their children ever need to work. Every foreign dollar used to buy real estate goes into somebody's pocket and it is usually someone local. It really is new Torontonians that ultimately pay for the ongoing insanity.

[someone123]

Originally Posted by hipster duck

I'm a person who doesn't benefit from property ownership and lives off of my labour, and I think Vancouver is a pretty easy place to live in.

If I insisted on buying a property to live in, sure, it would be tough. But, as a renter, things are pretty good. My rent is much lower than it was in Toronto and, more importantly, it goes up at very modest rates.

I don't regret being shut out of homeownership. I have other investments, and if I really thought that property ownership was such a worthwhile investment, I could always invest in property in another city.

Here's an interesting article about wealth inequality (it includes a link to the actual paper): http://www.economist.com/blogs/freeexchange/2015/03/wealth-inequality

One of the central ideas of the paper is that homeowners are capturing a disproportionate share of the economy. This effectively reduces the standard of living of everybody else. I think Vancouver's on the bleeding edge of this phenomenon, and that it will get worse if it is not kept in check. Foreign ownership also hurts even more since we are handing over disproportional returns to people who didn't necessarily pay many taxes in Canada.

Some non-property-owners might still do okay in this environment, but they may have otherwise done much better. Meanwhile, those at the low end of the economic scale are experiencing serious problems (i.e. those with the 14% of children in poverty). If you're a childless professional in Vancouver you can do okay by renting, but your standard of living will still be lower than it otherwise could have been if you had been able to capture some of the insane returns of the housing market. And if you were instead working for minimum wage you'd have a low standard of living.

[st7860]

I was wondering about that for a few minutes. What can a homeowner bid up? Food? Cars?

[lio45]

Originally Posted by osmo

Where can I buy these Canadian passports? I want to send my buddy one who lives in Chicago.

Too late, your Chicago buddy would've had to act before the program was stopped in 2012. But yeah, with enough cash, there's no reason he couldn't have done like plenty of Vancouver buyers did during that period.

"Launched in 1986, the immigrant investor program offered visas to business people with a net worth of at least $1.6 million who were willing to lend $800,000 to the Canadian government for a term of five years.

The government said it cancelled the immigrant investor program — which critics had described as "cash for citizenship" — because it had been riddled with fraud."

(Link: http://www.cbc.ca/news/politics/canada-s...-investors-under-pilot-program-1.2875518)

[st7860]

Originally Posted by osmo

Where can I buy these Canadian passports? I want to send my buddy one who lives in Chicago.

Canada does not and has never sold passports.

[osmo]

Originally Posted by st7860

Canada does not and has never sold passports.

That is what I am saying. There is a 'process' in Canada for entry but not a 'price' (aside from costs of doing the process of course).

[Stryker]

Originally Posted by osmo

That is what I am saying. There is a 'process' in Canada for entry but not a 'price' (aside from costs of doing the process of course).

Or with a bit of money buy your way through the process.

[Stryker]

Originally Posted by Kitchissippi

Have you even been to China? Or are your opinions just coming out of your armchair fed by the media? Go visit, it's quite an eye-opener. It's like a vast country filled with anarchistic capitalists tolerating the thin veil of communism cast over it.
What exactly do you think I'm missing?
You seem to have this romantic notion that money has some sort of ultimate patriotic goal. It doesn't. You've bought into a new Manifest Destiny that the western world, the USA in particular, somehow has the sole right to control and run the global economy.
Not in the least, there is no need for patriotism when convening interests are factored in.
Nor do I think the problems with the chinese is directly from chinese people. But rather chinese money.
I certainly wouldn't call the USA's two-flavoured politics a true democracy, it's a boring football game that the world is forced to watch.
Go open a history book, the american's aren't lovely, but compared to the governments that have expressed no interest in being actual democracies it's a dream
Your alarmist views are also a bit outdated, China is barely trying to control its own internal economy right now, and many things are aligning against it as they've overplayed their hand of undervaluing the Yuan.

Yeah I'm alarmed that china is barely able to control it's economy.

The country has changed drastically in the last ten years and will change drastically again in the next ten.

No one knows where things are headed all we know, is that they are not democratic, are much more comfortable with things that we couldn't even dream of, and as an economy fixated on big global influence.

The problem is the nature of corruption money.

These people don't have a vested interest in the money because they didn't earn it.

They don't care if the housing market tanks as long as they get the money out of china.

Even worst there a tonnes of plausible scenario where canadian assets can fall under the ownership of the chinese government, if they ever make a major crack down on corruption.