Chinese Investors Driving Up Metro Housing Prices

[logicbomb]

Originally Posted by Caliplanner1

Thanks for the correction. BTW, no one said here that anyone from the Middle East is "pretending to be poor" or that ALL refugees have to be poor but the general/majority image of the refugee today is one of being dispossessed (in cases where even the wealthy have to leave wealth behind and start all over).

The reality is that screening will sometimes fail and it's especially difficult when you have no paper trail of financial transactions overseas. I have heard several success stories involving Iranian and Chinese "refugees" .....that have somehow managed to purchase homes in Surrey within a few years of moving here (source: PCRS). It's a shame because they use vital resources and obtain certificates which are funded by the society only to disappear and never use them.

I guess it's no different than those affluent low income residents in Vancouver and Richmond that qualify for essential services (food bank and tax subsidies).

[Migrant_Coconut]

Originally Posted by logicbomb

The reality is that screening will sometimes fail and it's especially difficult when you have no paper trail of financial transactions overseas. I have heard several success stories involving Iranian and Chinese "refugees" .....that have somehow managed to purchase homes in Surrey within a few years of moving here (source: PCRS). It's a shame because they use vital resources and obtain certificates which are funded by the society only to disappear and never use them.

Doesn't help that Canada accepts practically anybody. Much as I hate how the US does things sometimes, they do triple-check their share of the Syrians - and each one has to be personally signed off by the director of the FBI.

Here, Immigration accepts Chinese "refugees" simply because they're opposed to the one child policy??

[Caliplanner1]

[Quote:
Originally Posted by Caliplanner1
there were also large numbers of wealthy middle-eastern "refugees" (ones driving luxury cars and giving exclusive residential addresses at registration time).

Caliplanner, you can forgive me for thinking you were saying that with the sentence above.

You are forgiven because as you realize "large numbers of wealthy middle-easterners" doesn't mean ALL middle-easterners (are wealthy). In any event my relative was examining school registration data....not emotionally making up misinformation!

[Bcasey25raptor]

I fired off a letter to the Mayor about the housing market and this city's obsession with maintaining low density housing. I stated that foreign investors won't stop coming here, theres little we can do other than increase density and encourage denser living in high pedestrian areas. The city has been trying but they've been WAY too slow to solve this problem. I didn't even advocate towers. I want to see more 3-4 story walk ups, town homes, row houses, and other dense yet not high rise developments. This is doable and it shouldn't cause communities to lose their minds.

The city of Vancouver has extremely finite land, we do not have the luxury of low density living anymore. Metro Vancouver, same deal. The ALR prevents any growth outwards, which is good, but further compounds and worsens the housing crisis.

Have any of you seen this video before? It's a little comedic but really shows the frustration many have right now.

• Video Link

[Pinion]

We can easily stop foreign investment though and single family homes should not be seen as the enemy. Vancouver was a much better city when locals could buy a nice single family home for $200,000, which wasn't that long ago.

[Bcasey25raptor]

Originally Posted by Pinion

We can easily stop foreign investment though and single family homes should not be seen as the enemy. Vancouver was a much better city when locals could buy a nice single family home for $200,000, which wasn't that long ago.

Supply and demand is still a factor. With so little land available and so high of demand, theres no way we can go back to that price range.

The only way to cause prices to drop, or stabilize, is to encourage denser living.

We cannot easily stop foreign investment, this is a global problem. Vancouver gets hit worse than elsewhere since we make it easy and we also restrict development.

I won't deny Vancouver most definitely was a better city when homes could be had for $200k, but that was a LONG time ago and theres no way we can go back to that without detrimentally screwing with our local economy.

Likewise, many countries have attempted over seas speculation restrictions and have failed to stabilize or cheapen their markets, in particular Australia.

We should allow this investment to occur (we don't have much choice) but we should tax all foreign transactions and use those taxes to start an affordable housing fund that the city and province can use to fund social housing.

[logicbomb]

Originally Posted by Bcasey25raptor

Supply and demand is still a factor. With so little land available and so high of demand, theres no way we can go back to that price range.

The only way to cause prices to drop, or stabilize, is to encourage denser living.

We cannot easily stop foreign investment, this is a global problem. Vancouver gets hit worse than elsewhere since we make it easy and we also restrict development.

I won't deny Vancouver most definitely was a better city when homes could be had for $200k, but that was a LONG time ago and theres no way we can go back to that without detrimentally screwing with our local economy.

Likewise, many countries have attempted over seas speculation restrictions and have failed to stabilize or cheapen their markets, in particular Australia.

We should allow this investment to occur (we don't have much choice) but we should tax all foreign transactions and use those taxes to start an affordable housing fund that the city and province can use to fund social housing.

So your solution is rapid densification and you think this will be the answer based on...supply and demand? Yeah, this is what they teach you in introductory economics, but land scarcity is not why the real estate market has gone bonkers over the past 2 years.

We are currently seeing densification at a steady pace, and 2 bdrm condos in Yaletown are surpassing 1.5 mill. Hell, there have been several 1100 sq/ft "penthouse suites" being sold for over 2 mil along Cambie. Densification will do little to curb the cost of housing and offset the number of investors that will come into the region and buy multiple properties. The only thing this will do is allow for more "vacation" properties or investment opportunities for foreign investors.

[logan5]

Just thinking back to that Andy Yan study from 2013... it concluded that metro Vancouver had 7 point something percent empty homes, vs Calgary's 5%. If there is a problem with foreign investors hollowing out neighbourhoods, it's very localized to a few areas on the west side and Coal Harbour.

Vancouver is the most land constrained major city in North America, coupled with the fact that it is one of the most desirable cities, so that has to be a major contributor to our high housing costs. In a city like Vancouver you have to have higher densities. That means single detached homes have no place here. At minimum there should be row-house/stacked townhouse, stepping up to low rise just off the arterials, then mid-rise/high-rise along all the arterial streets.

[Bcasey25raptor]

Originally Posted by logicbomb

So your solution is rapid densification and you think this will be the answer based on...supply and demand? Yeah, this is what they teach you in introductory economics, but land scarcity is not why the real estate market has gone bonkers over the past 2 years.

We are currently seeing densification at a steady pace, and 2 bdrm condos in Yaletown are surpassing 1.5 mill. Hell, there have been several 1100 sq/ft "penthouse suites" being sold for over 2 mil along Cambie. Densification will do little to curb the cost of housing and offset the number of investors that will come into the region and buy multiple properties. The only thing this will do is allow for more "vacation" properties or investment opportunities for foreign investors.

Densification right now is still mostly constrained to the downtown peninsula and the areas immediately around it. We need to spread that density around. Yes the cost of housing in metro vancouver has been rising mostly due to foreign investment, but land is still an issue, we can't build new SFH in the city of Vancouver.

[logicbomb]

Originally Posted by logan5

Just thinking back to that Andy Yan study from 2013... it concluded that metro Vancouver had 7 point something percent empty homes, vs Calgary's 5%. If there is a problem with foreign investors hollowing out neighbourhoods, it's very localized to a few areas on the west side and Coal Harbour.

Andy Yan also concluded that more than 25% of apartments/condos downtown were empty or not occupied in that very same study. I imagine the numbers would look similar if you were to examine the new mid-rise developments on Cambie.

I feel like isolating land constraints as a causation and presenting densification as the answer is a total cop out to the underlying issue at hand. An increase in demand is not why housing prices have increased by 25% in the past year. We have to acknowledge that offshore money is flooding the market and is having a huge effect in the region. We also have to acknowledge that all levels of government are doing little to address this; despite mounting evidence that show that these homes are being purchased exploiting illegal tactics.

Originally Posted by Bcasey25raptor

Densification right now is still mostly constrained to the downtown peninsula and the areas immediately around it. We need to spread that density around. Yes the cost of housing in metro vancouver has been rising mostly due to foreign investment, but land is still an issue, we can't build new SFH in the city of Vancouver.

Marpole, Kerrisdale, Collingwood, Oakridge, Kingsway...Densification is occurring.

[logan5]

Originally Posted by logicbomb

Andy Yan also concluded that more than 25% of apartments/condos downtown were empty or not occupied in that very same study.

Coal Harbour (which is a small portion of the DT peninsula) is where it's at 25%.

[Spork]

Originally Posted by logicbomb

I feel like isolating land constraints as a causation and presenting densification as the answer is a total cop out to the underlying issue at hand. An increase in demand is not why housing prices have increased by 25% in the past year. We have to acknowledge that offshore money is flooding the market and is having a huge effect in the region. We also have to acknowledge that all levels of government are doing little to address this; despite mounting evidence that show that these homes are being purchased exploiting illegal tactics.

Completely agree. If investors are driving the market, as seems to be the case as seen by a new damning article almost every week, we need to make a decision as a city. Are we okay with hollowing out communities and using land as an investment vehicle? If so, then let's solve the supply problem and rezone swaths of land. Let's sell it all to the highest bidder as has been happening already, but at a larger scale. Let's go extreme. On the flip side, if we don't agree with this happening, then let's solve the demand problem. We can have one or the other, but not both. Hollowed out communities and land/housing used strictly as a short-term investment vehicle, or land/housing used strictly as a way to house people. Pick one, because trying to have both is just fooling ourselves.

[Spork]

Here is a fun article for everybody: http://www.theglobeandmail.com/news/...ors_picks=true

They had a deal.

The Rappaports’ home, on Vancouver’s West Side, would net the couple $5.2-million last year. Jo and her husband had bought the stately Craftsman home in 1987 for $362,000. They raised their sons there and loved it. But the neighbourhood had changed. Investors were razing the houses and it was time to move on.

“It used to be the prettiest block,” Ms. Rappaport said. “And it has been a construction zone for the last two years.”

The couple suspected the house would be torn down, like so many others on their lush and lucrative street, but they stood to profit nicely. There was some toing and froing over details, then a slight change of plans. For reasons the Rappaports never quite grasped, they were no longer selling their property to the foreign businessman whose offer they had accepted. Instead, they were selling to his real estate agent, Wayne Du of Amex Broadway West Realty, who told the Rappaports that he and the businessman’s wife would be purchasing instead, as co-owners.

The Rappaports weren’t thrilled, but there was nothing they could do to prevent it. Their contract, after all, contained what’s called an “assignment clause,” which gave the businessman the option to sell or transfer his interest in the property before the closing date.

Three months after the deal closed, the new broker-owner relisted the house – which he then had a stake in – and resold it for $6.2-million, a substantial if not unusual price increase that works out to roughly $11,000 a day. Mr. Du is now advertising the house for sale again for $6.58-million. It’s all perfectly legal, even if it displeases the Rappaports.

Source: http://www.theglobeandmail.com/news/...ors_picks=true

Insane.

[Vin]

Originally Posted by Spork

Here is a fun article for everybody: http://www.theglobeandmail.com/news/...ors_picks=true


Source: http://www.theglobeandmail.com/news/...ors_picks=true

Insane.

Local greed is the main cause of runaway real estates prices, from sellers, middle people and governments: all stand to benefit. The government isn't doing anything about it because such deals benefit their coffers too, what with the property transfer taxes, higher property taxes due to higher property evaluations etc. In fact the rich Chinese investors are beginning to sound like the victims here because they're totally being ripped off by the locals, but to own a stake of land, they are foolish enough to be ripped off, and thinking they too can get a good return when the properties are eventually sold. The Canadian real estate industry is rather corrupt.

[whatnext]

Originally Posted by Spork

Here is a fun article for everybody: http://www.theglobeandmail.com/news/...ors_picks=true


Source: http://www.theglobeandmail.com/news/...ors_picks=true

Insane.

Yeah I was shocked at that article, and how it made realtors look like a bunch of sleazebags basically.

It just goes to show Vancouver's major "industry" is real estate speculation, to the detriment of everything else. I was driving along Cambie today and all the billboards for new projects reminded me of images from the USA circa 2007, or 1920's Florida - textbook images of a real estate bubble.

[Bcasey25raptor]

Hate to sound like a communist, but i'm seriously questioning whether the way we currently go about buying and selling real estate is justified. Housing is a need, not a want. I don't think it should be treated like other commodities that are not needs.

[Caliplanner1]

Originally Posted by Bcasey25raptor

Hate to sound like a communist, but i'm seriously questioning whether the way we currently go about buying and selling real estate is justified. Housing is a need, not a want. I don't think it should be treated like other commodities that are not needs.

Please don't apologize. There is NOTHING wrong in sounding like a communist. Communism is simply intense communal governance and ownership of the means of production: a critical/useful reality towards survival in times of extreme economic (re: global free market collapses as seen in the 1930's)/environmental or military (e.g. World War I in Russia) induced disasters!

Only shallow conservatives who don't understand the critical nuances of economic history trip and get bent out of shape about communism being an endless evil (even when they enjoy such legacies of communism like state sponsored health care, "free" public education and government sponsored retirement pensions/old age social safety nets etc., etc.)!

Finally, communism is about hyper community COOPERATION as opposed to capitalist competition. Thus, in times of extreme (economic/environmental-like a massive earth quake destroying a country- etc.) crises we need to cooperate (via "communism" on a communal level) rather than selfishly compete via narrow/individualistic profit seeking capitalism!

[trofirhen]

Originally Posted by Bcasey25raptor

Hate to sound like a communist, but i'm seriously questioning whether the way we currently go about buying and selling real estate is justified. Housing is a need, not a want. I don't think it should be treated like other commodities that are not needs.

Agreed. Housing is a basic human right, IMO, at least in Canada. And it should be respectable housing. (maybe that sounds Communist, too)

[cornholio]

Density in Vancouver is not a problem. Metro Vancouver's growth is slowing and has never been lower, contrary to popular belief. Yes it should be easier to build higher density housing in the core. No this will not solve current problems of speculation and offshore money. What needs to be done is a re evaluation of the real estate industry in Canada. Canada is not unique and many other places in the world face or have faced similar problems. Only problem right now is everyone is too afraid to act, yet alone act in a heavy handed manner as is required to punish speculators in such a way that no one will speculate again. In any point current trends are not sustainable and eventually the market will correct, either rapidly through collapse or like Japan through a combination of collapse and stagnation. What I find most interesting is how so many people can be so irrational about prices and actually miss the obvious when prices are out of reach of locals. People don't realize what say a million dollars is. If they did they would run and stop speculating.

[cornholio]

Originally Posted by logicbomb

You sound like me last year. I refused to leave, but I was eventually forced to move back to Surrey after my scumbag landlord jacked up rent by $550 (this is illegal but no one gives a damn). Moving to Surrey was the best thing I have ever done. I have renewed hope of perhaps investing in a condo/apartment; some which are going for 179k for a 2 bedroom.

I got the best advice from a former social planner in the COV (he worked there from 1981-94). There is no bubble, and there is downward trend for housing. What we're seeing now is a product of globalization and the increase in unfettered capital across borders. This has been an issue for over 20 years, and nothing has really changed since.

His advice: Invest now- even if it is in Surrey. The area around Surrey Central is being heavily gentrified and some 10-15 year old apartments are selling for anywhere between 149k for 1 bedroom to 250k for a modern 2 bedroom.

You are correct about all of this being a product of globalization. However it is not sustainable. Laws will change to protect local real estate. This has happened before so its not something new. China will be forced to put in more efficient controls of money flowing out and Canada will have to put in controls on what money flowing in is directed towards. Even if no one wants to talk about this now it is the inevitable outcome and at this point I think the course is set. Globalization is fairly new and some of these problems also fairly new and proper laws and protections are not in place yet but at some point in the future they will be. Its natural evolution. But unfortunately due to apathetic politicians our society will suffer first.