Chinese Investors Driving Up Metro Housing Prices

[casper]

Originally Posted by Caliplanner1

Casper, driving around the Vancouver metro area I have noticed a number undeveloped areas in the hills around Coquitlam and other nearby areas. Are there any reasons why such un-urbanized places have not seen single/bungalow type housing development for the middle and upper class folks whose increased demand for such housing stock could have a trickle down effect on the prices of normally lower priced housing stock elsewhere in the region???

I think you have to look at the area. Places like Richmond and the valley have an agricultural land reserve that limits land use. Certain areas in the mountains on the North Store are closed off as part of the city watershed (to supply drinking water to the city). That said, there is still land to be developed when you get out into places like Coquitlam.

It is going to be interesting to see what happens in that area when the Evergreen line comes online.

[st7860]

Originally Posted by Tourist9394

The building of these condos create construction jobs, as well as property management jobs. I don't see why Vancouverites are complaining. The homeowners pay more property taxes than your annual income tax, how is that not competitive? Don't resort to populism.

If anything, that deserves a nail on the head and a +1 put together. Property taxes are zooming up and it isn't funny. The local transit authority has pre approved permission to raise property taxes and sometimes does, and of course the city is raising stuff to pay for their new living wages. I don't complain about people buying things.

[casper]

Originally Posted by Alex Mackinnon

Actually no. That's pretty unlikely. The mill rate is Vancouver isn't very high and I'm not broke. Municipalities depend of provincial and federal money. Commercial real estate also subsidizes residential property taxes.

I pay more in income taxes annually than 6-10 of those units pay in property tax. Likely much more. Then I pay on GST, PST, alcohol tax, gas tax, MSP, tariffs on imports and subsidies for Canadian businesses (ie farmers). My company also pays income tax on all the profit they make on my work. I'm also under 65, and as of yet have no kids, so the government pretty much banks everything I give them.

A person who makes about $100K/yr will probably pay as much in income tax as a person who owns $8.5M in real estate in Vancouver.

Mill Rates in Vancouver

So a foreign investor (with $8.5M in assets), who does not depend on any government services in Canada is making the same contribution to the tax base as someone who works in Canada making $100k.

if that $8.5M is invested in say Condos, in addition to taxes they are paying condo fees. Lets say 8 condos, $400 per month per condo in fees. That is $3,200 per month in management, building maintenance and contribution to reserve funds for major upgrades.

Sounds like a good deal for the local economy.

[bardak]

Originally Posted by casper

So a foreign investor (with $8.5M in assets), who does not depend on any government services in Canada is making the same contribution to the tax base as someone who works in Canada making $100k.

if that $8.5M is invested in say Condos, in addition to taxes they are paying condo fees. Lets say 8 condos, $400 per month per condo in fees. That is $3,200 per month in management, building maintenance and contribution to reserve funds for major upgrades.

Sounds like a good deal for the local economy.

While it might be good for the city coffers and the strata it is not good for the overall city. I would rather have 8 occupied condos with people that buy stuff at local stores and create more jobs. The condos would also increase the supply and increase competition between landlords.

Personal I like to see a large increase in the mill rate and offer rebates on primary and rented residences.

[quobobo]

Originally Posted by bardak

I would rather have 8 occupied condos

With the right policies (i.e. don't forbid apartment buildings in most of Vancouver) we could have 8 occupied condos and 8 unoccupied condos contributing more than they consume in property taxes.

[jlousa]

Let's assume the lady on the strata isn't exaggerating for a minute... We need to keep things in context. The OV did not originally sell well and a large amount of units were sold in bulk to larger investors to get them off the books. This is not the norm throughout the city. Most investment condos consist of small investors with units scattered throughout the city and they need the cashflow so for the most part do have the units rented out as the chart above shows.

[Spork]

Originally Posted by jlousa

Let's assume the lady on the strata isn't exaggerating for a minute... We need to keep things in context. The OV did not originally sell well and a large amount of units were sold in bulk to larger investors to get them off the books. This is not the norm throughout the city. Most investment condos consist of small investors with units scattered throughout the city and they need the cashflow so for the most part do have the units rented out as the chart above shows.

This was not in the original OV, but other SE False Creek development (something by Pinnacle - can't remember the name).

In addition, let's keep in mind that the map posted previously is from 2011. IMO, the market has changed substantially from that year.

[st7860]

Originally Posted by jlousa

Let's assume the lady on the strata isn't exaggerating for a minute... We need to keep things in context. The OV did not originally sell well and a large amount of units were sold in bulk to larger investors to get them off the books. This is not the norm throughout the city. Most investment condos consist of small investors with units scattered throughout the city and they need the cashflow so for the most part do have the units rented out as the chart above shows.

Yes so since the City bought out the insolvent olympic village builder having anything sold is good occupied or not. I remember a few years ago there were very unusual articles about the fancy water saving equipment at the Village doing unusual things. Some people living at the OV were experiencing not so clean water coming from their showers and so on.

[logan5]

Originally Posted by Spork

This was not in the original OV, but other SE False Creek development (something by Pinnacle - can't remember the name).

In addition, let's keep in mind that the map posted previously is from 2011. IMO, the market has changed substantially from that year.

Could be right. The end of the immigrant investor program should in theory slow down real estate transactions as the tax free loans are no longer the easy path to Vancouver for rich Chinese.

[st7860]

Originally Posted by casper

So a foreign investor (with $8.5M in assets), who does not depend on any government services in Canada is making the same contribution to the tax base as someone who works in Canada making $100k.

if that $8.5M is invested in say Condos, in addition to taxes they are paying condo fees. Lets say 8 condos, $400 per month per condo in fees. That is $3,200 per month in management, building maintenance and contribution to reserve funds for major upgrades.

Sounds like a good deal for the local economy.

Exactly. In addition to that, fortunately the BC Government in July of this year cut the required amount of investment for provincial immigration in half, to $200,000. This should help things a bit. To the moon gentlemen!

[whatnext]

Originally Posted by st7860

Exactly. In addition to that, fortunately the BC Government in July of this year cut the required amount of investment for provincial immigration in half, to $200,000. This should help things a bit. To the moon gentlemen!

Help things for who? Maybe for a Chinese realtor pimping houses to clients with suitcases of cash, like...?

It certainly won't help working British Columbians looking to find a home. Cutting the amount required can just be added to the list of boneheaded achievements our disaster of a Premier is going to wear the next election.

[Alex Mackinnon]

Originally Posted by casper

So a foreign investor (with $8.5M in assets), who does not depend on any government services in Canada is making the same contribution to the tax base as someone who works in Canada making $100k.

if that $8.5M is invested in say Condos, in addition to taxes they are paying condo fees. Lets say 8 condos, $400 per month per condo in fees. That is $3,200 per month in management, building maintenance and contribution to reserve funds for major upgrades.

Sounds like a good deal for the local economy.

That all sounds well and good, until you consider that Vancouver has the highest housing costs in the nation by a huge margin, and the lowest wages of any major city in Canada.

Your idea of economics hasn't worked. It's just screwed things up.

What makes you think this "benefit" isn't behind the screwed up situation this city is in?

[st7860]

Originally Posted by Alex Mackinnon

That all sounds well and good, until you consider that Vancouver has the highest housing costs in the nation by a huge margin, and the lowest wages of any major city in Canada.

Your idea of economics hasn't worked. It's just screwed things up.

What makes you think this "benefit" isn't behind the screwed up situation this city is in?

Other than a few street protests at the Vancouver Art Gallery there hasn't been that much public fuss about this supposed issue. BC is one of those rare provinces in which people can easily vote something into law if there is enough support for it - such as the HST thing.

[st7860]

Originally Posted by whatnext

Help things for who? Maybe for a Chinese realtor pimping houses to clients with suitcases of cash, like...?

Doesn't look like a lack of homes http://vancouver.craigslist.ca/search/apa

It isn't against the law to for a person with a suitcase of cash to buy a home.

[Pinion]

Originally Posted by st7860

Other than a few street protests at the Vancouver Art Gallery there hasn't been that much public fuss about this supposed issue. BC is one of those rare provinces in which people can easily vote something into law if there is enough support for it - such as the HST thing.

That's because people are simply packing up and leaving. They know the government is complicit in this and feel hopeless to stop it.

[Tourist9394]

Originally Posted by casper

So a foreign investor (with $8.5M in assets), who does not depend on any government services in Canada is making the same contribution to the tax base as someone who works in Canada making $100k.

if that $8.5M is invested in say Condos, in addition to taxes they are paying condo fees. Lets say 8 condos, $400 per month per condo in fees. That is $3,200 per month in management, building maintenance and contribution to reserve funds for major upgrades.

Sounds like a good deal for the local economy.

ss

[st7860]

OMG foreigners!!

http://www.theglobeandmail.com/news/...ticle26246319/

"Kevin Cheung and Scott Wang are two of the latest wave of developers, sometimes labelled as offshore, who have arrived in Vancouver within the last couple of years and caused ripples of interest and alarm.

Both graduated from Sir Winston Churchill Secondary School, with Mr. Cheung getting a bachelor’s in commerce at the University of British Columbia. Both have fathers in real-estate development in Shanghai who are providing the starting equity for their sons’ Vancouver ventures. They are the children of the astronaut families."

[Pinion]

More insinuations that anyone who has a concern about people being able to afford to live in Vancouver is a racist. So tiresome.

[st7860]

http://thetyee.ca/News/2015/08/07/Va...Debate-Racism/

"Fenella Sung, spokesperson for a group called Friends of Hong Kong, put it more bluntly. She said it's racist to associate "dirty money" with Chinese culture."

[twoNeurons]

Limiting foreign buyers will not change real estate prices, because foreigners aren't driving prices up. It's FEAR of foreigners and the idea that they're buying up all the houses that is driving LOCALS to buy real estate at insanely low interest rates, essentially enslaving themselves to a property for the next 25 years.

Sure, there's some moving and shaking in the high end, which has made some people wealthy when they downsize, but there isn't a huge amount of that happening.