Canada's 'housing bubble' deemed close to bursting

[rousseau]

Originally Posted by geotag277

Just want to make a quick clarification regarding the results of this study, which I believe are being overstated here.

They obviously couldn't identify the owners as being non-Canadian citizens/permanent residents (partially because that data probably doesn't even exist, which is arguably itself an issue).

The study simply identified last names which have an ancestral link to mainland China. They could have been first, second, third generation immigrants, or even flagging false positives across the country.

You want to make a "quick clarification"? You, who consistently demonstrates a propensity to make declarations on things which you clearly know nothing about?

Now you happen to have tread onto territory where I have expertise. Speaking solely about the name analysis, and not making any comment on the potential larger ramifications of the situation with real estate in Vancouver, it should be stated that study unequivocally does not simply identify last names with an ancestral link to China. Rather, it looks at full names.

Full names. Not just last names. Full names.

The last two points in the graphic explain the reasoning behind the study very clearly. First generation Chinese generally do not give themselves Anglicized first names these days, whereas back in the 50s and 60s the immigrants from Hong Kong who ran old-style Chinese-Canadian diners did tend to call themselves names like Tony and Frank. The study methodology references actual academic studies, and is sound.

[someone123]

Originally Posted by geotag277

Houses haven't been affordable in Vancouver since 1990 (when they passed Toronto).

There wasn't much change in affordability in the Vancouver area from 1990 up until about 2003. Vancouver detached housing prices peaked at around $300,000 in 1990, crossed $400,000 around 2002-2003 (approximately 0 real increase when adjusted for general inflation). Since then they've gone up to around $1.5M, around a 3x increase even when accounting for inflation. And they have nearly doubled in price since as recently 2009.

Most people would love to pay 1990 prices for a Vancouver house, adjusted for inflation. There has been tremendous inflation in the price of detached housing in Vancouver from 2009-2016 alone that is not paralleled by anything from the 1990-2003 period; the increases now are more similar to the real estate bubble years of the 1980's.

You can see a price chart here: http://www.theglobeandmail.com/report-on...-to-average-147-million/article26197722/

[whatnext]

Originally Posted by geotag277

Just want to make a quick clarification regarding the results of this study, which I believe are being overstated here.

They obviously couldn't identify the owners as being non-Canadian citizens/permanent residents (partially because that data probably doesn't even exist, which is arguably itself an issue).

The study simply identified last names which have an ancestral link to mainland China. They could have been first, second, third generation immigrants, or even flagging false positives across the country.

I think we should be cognizant of the limitations of these types of studies and aware of what they are truly saying. That is, in this case, that people with Chinese heritage (or even people born of Chinese father/Canadian mother with a Chinese last name, or even if they decided to use a Chinese surname from one of their parents) bought these houses - not that they were purchased from buyers directly in the Chinese mainland who are disconnected from Canadian society. This "study" potentially includes vast and large swaths of Canadian citizens and second/third generation immigrants who may even have a minority Chinese heritage, but are considered "guilty" simply because of their last name.

I think it's important to be careful with what we are saying and the manner in which we say it, because there seems to be a large anti-Chinese sentiment bubbling under in Vancouver (and let's be real, it's been there since the days of the head tax of 1885, and the anti Asian riots of 1907, the Chinese exclusion act of 1923, etc.)

The problem in Vancouver is at it's root affordability. Houses haven't been affordable in Vancouver since 1990 (when they passed Toronto). The problem is not successful domestic Canadians buying houses with their own money (whose last name might be foreign sounding).

Someone is starting to sound a little panicky.

Yes we all know Vancouver has been more expensive than Toronto for a while. But I've called you out on this time and again that single family houses were affordable to people of middle class income far more recently than 1990. Please stop repeating that lie.

[geotag277]

Originally Posted by rousseau

You want to make a "quick clarification"? You, who consistently demonstrates a propensity to make declarations on things which you clearly know nothing about?

Now you happen to have tread onto territory where I have expertise. Speaking solely about the name analysis, and not making any comment on the potential larger ramifications of the situation with real estate in Vancouver, it should be stated that study unequivocally does not simply identify last names with an ancestral link to China. Rather, it looks at full names.

Full names. Not just last names. Full names.

The last two points in the graphic explain the reasoning behind the study very clearly. First generation Chinese generally do not give themselves Anglicized first names these days, whereas back in the 50s and 60s the immigrants from Hong Kong who ran old-style Chinese-Canadian diners did tend to call themselves names like Tony and Frank. The study methodology references actual academic studies, and is sound.

Yes, thanks for the over the top contrarian rhetoric which is typical in all your replies to me.

Furthermore, the cited studies based on full names (you are correct, it is based on full name) are based on USA-based studies, which in many ways are not exactly equivalent to Canadian immigration and immigration heritage. One of the major differences is the melting pot model of the US versus the ethnic enclave model which is more typical in Canada.

Short of any actual study based specifically in Canada, I would wager to posit that it is much more common for Canadian first and second generation immigrants to be given first names that reflect their heritage proudly.

[geotag277]

Originally Posted by whatnext

Someone is starting to sound a little panicky.

Yes we all know Vancouver has been more expensive than Toronto for a while. But I've called you out on this time and again that single family houses were affordable to people of middle class income far more recently than 1990. Please stop repeating that lie.

Yeah, you sure called me out buddy.

http://www.skyscraperpage.com/forum/showpost.php?p=7320379&postcount=4675

http://www.skyscraperpage.com/forum/showpost.php?p=7320972&postcount=4684

Your only counter examples to affordability in the 90s are the fact that you and your wealthy buddies managed to buy property at that time. And how magnanimous of you that you want to rent out your dirty sunlight starved basements to lower income people to prop up your own housing value.

[geotag277]

Originally Posted by someone123

There wasn't much change in affordability in the Vancouver area from 1990 up until about 2003. Vancouver detached housing prices peaked at around $300,000 in 1990, crossed $400,000 around 2002-2003 (approximately 0 real increase when adjusted for general inflation). Since then they've gone up to around $1.5M, around a 3x increase even when accounting for inflation. And they have nearly doubled in price since as recently 2009.

Most people would love to pay 1990 prices for a Vancouver house, adjusted for inflation. There has been tremendous inflation in the price of detached housing in Vancouver from 2009-2016 alone that is not paralleled by anything from the 1990-2003 period; the increases now are more similar to the real estate bubble years of the 1980's.

You can see a price chart here: http://www.theglobeandmail.com/report-on...-to-average-147-million/article26197722/

One thing you have to keep in mind with evaluating the absolute value of housing costs is the mortgage rate as well.

http://www.bankofcanada.ca/wp-content/uploads/2010/09/selected_historical_v122497.pdf

Returning to 10% mortgage rates would mean even at 1990 prices the vast majority of housing unaffordable to Vancouver residents.

Another quirk of the 90s was much higher taxes which gave Canadians a much lower percentage of after tax income.

I have already documented in a previous post how the mortgage carrying costs and tax made housing unreasonably affordable for the vast majority of residents in Vancouver who were not top quantile earners.



The simple fact is, the 90s were the perfect time to recognize and realize that were serious endemic issues with the housing market in Vancouver and it had everything to do with the lack of new single family housing supply and it occurred well before "foreign investors" were the buzz word of the day.

[cornholio]

Originally Posted by geotag277

Just want to make a quick clarification regarding the results of this study, which I believe are being overstated here.

They obviously couldn't identify the owners as being non-Canadian citizens/permanent residents (partially because that data probably doesn't even exist, which is arguably itself an issue).

The study simply identified last names which have an ancestral link to mainland China. They could have been first, second, third generation immigrants, or even flagging false positives across the country.



I think we should be cognizant of the limitations of these types of studies and aware of what they are truly saying. That is, in this case, that people with Chinese heritage (or even people born of Chinese father/Canadian mother with a Chinese last name, or even if they decided to use a Chinese surname from one of their parents) bought these houses - not that they were purchased from buyers directly in the Chinese mainland who are disconnected from Canadian society. This "study" potentially includes vast and large swaths of Canadian citizens and second/third generation immigrants who may even have a minority Chinese heritage, but are considered "guilty" simply because of their last name.

I think it's important to be careful with what we are saying and the manner in which we say it, because there seems to be a large anti-Chinese sentiment bubbling under in Vancouver (and let's be real, it's been there since the days of the head tax of 1885, and the anti Asian riots of 1907, the Chinese exclusion act of 1923, etc.)

The problem in Vancouver is at it's root affordability. Houses haven't been affordable in Vancouver since 1990 (when they passed Toronto). The problem is not successful domestic Canadians buying houses with their own money (whose last name might be foreign sounding).

The study and methodology is sound. You probably missed the fact that they are looking at non anglicized names. Andrew Wong is not Huang Chung Lee. If anything the methodology under-counts recent immigrants from mainland China. Remember that pre 1980's the population was over 95% European descendants and immigrants, all non anglicized Chinese names are of people that have come within the last 20 30 years at the most, and most more recently then that.

As for growing discontent against Canada's immigration policies, the discontent is well founded as you can see some of the problems that are resulting from it. Trying to shut those conversations down is not going to make things better. Half the problems is our immigration policy. We should be targeting middle class individuals, somehow we are getting allot of very wealthy people from developing countries instead who bring nothing but problems, as we are seeing.

[cornholio]

House flipping in Vancouver on the rise.

http://www.vancouversun.com/business/spe...+small+portion+sales/11795194/story.html

To view without subscription open in private/incognito mode.

“In a market where prices are going up 20 per cent, people are going to flip houses because it is profitable. And that is what happened in the U.S. in 2006 and 2007, without any foreign buyers,” he said.

This quote (from a realestate agent surprisingly) was good not because of foreign buyers but the example and years given. As for the US in those times there was lots of foreign capital involved as well and it pulled out when things went south which did not help, but the regular folks over leveraging and trying to keep up was the bread and butter. In Vancouver though if foreign capital left I don't know what would be left, the entire real estate eco system would grind to a halt I suppose. And by foreign capital I also mean recent immigrants with access to other markets other then Canada and lots of money that they don't know what to do with.

[casper]

Originally Posted by cornholio

The study and methodology is sound. You probably missed the fact that they are looking at non anglicized names. Andrew Wong is not Huang Chung Lee. If anything the methodology under-counts recent immigrants from mainland China. Remember that pre 1980's the population was over 95% European descendants and immigrants, all non anglicized Chinese names are of people that have come within the last 20 30 years at the most, and most more recently then that.

As for growing discontent against Canada's immigration policies, the discontent is well founded as you can see some of the problems that are resulting from it. Trying to shut those conversations down is not going to make things better. Half the problems is our immigration policy. We should be targeting middle class individuals, somehow we are getting allot of very wealthy people from developing countries instead who bring nothing but problems, as we are seeing.

I would not even know how to put error bars around a study like like. Especially in a community such as Vancouver that has a lot of inter-race marriages with associated offspring.

Maybe you could concluded a substantial portion of sales are to individuals of a certain background perhaps. I think a qualitative statement is the best you could make.

[cornholio]

Originally Posted by casper

I would not even know how to put error bars around a study like like. Especially in a community such as Vancouver that has a lot of inter-race marriages with associated offspring.

Maybe you could concluded a substantial portion of sales are to individuals of a certain background perhaps. I think a qualitative statement is the best you could make.

We know the history of immigration waves and we know people born in Canada have anglicized names (outside of a few east Indian communities who like pronounceable east Indian names). I mean all this knowledge is available. We know immigrants with non anglicized names report and in fact have lower incomes. We can be sure within a reasonable margin of error that owners of multi million dollar homes with non anglicized names have brought their money in from the outside, and we know approximately when they came, and the growth of money from where they came from. The methodology of the study is very good and gives a good idea of the reality. It doesn't give as hard numbers about individuals but it gives a good broad overview. I should also point out that me and my wife are both immigrants, my name is not anglicized though it is European, together we have 3 different nationalities and can have 4 if the fourth was applied for, and she is racially half east Asian. So don't think I am xenophobic or racist or anything like that. I say it how I see it.

[urbandreamer]

What Vancouver (and Toronto) needs to rebalance the supply of homes is vast neighbourhoods of 4 storey walkups like those found in Montreal. They don't have to be luxury units, just reasonably affordable condos and rental apartments. Remove most of those rubbish overpriced bungalows between BTC and MTC and replace with 4 storey medium density neighbourhoods while keeping the street grid/tree canopy intact.

[cornholio]

Originally Posted by urbandreamer

What Vancouver (and Toronto) needs to rebalance the supply of homes is vast neighbourhoods of 4 storey walkups like those found in Montreal. They don't have to be luxury units, just reasonably affordable condos and rental apartments. Remove most of those rubbish overpriced bungalows between BTC and MTC and replace with 4 storey medium density neighbourhoods while keeping the street grid/tree canopy intact.

Yes more area should be zones to allow this so that the market can better react and balance its self in the face of speculation and other forces. However don't make the mistake of thinking the lack of this is a problem. There are more units being built then are needed, and population growth is not that high and is in fact slowing.

[1overcosc]

Originally Posted by cornholio

TRemember that pre 1980's the population was over 95% European descendants and immigrants, all non anglicized Chinese names are of people that have come within the last 20 30 years at the most, and most more recently then that.

It's been longer than that. The population was 97% white in 1966, and that number started declining shortly after that.

[rousseau]

Originally Posted by geotag277

Yes, thanks for the over the top contrarian rhetoric which is typical in all your replies to me.

Contrarian? So I'm engaging in the knee-jerk contradiction of public or established opinion purely for the sake of the contradiction itself?

Erm...so that's me, and not you?

Originally Posted by geotag277

Furthermore, the cited studies based on full names (you are correct, it is based on full name) are based on USA-based studies, which in many ways are not exactly equivalent to Canadian immigration and immigration heritage. One of the major differences is the melting pot model of the US versus the ethnic enclave model which is more typical in Canada.

Short of any actual study based specifically in Canada, I would wager to posit that it is much more common for Canadian first and second generation immigrants to be given first names that reflect their heritage proudly.

So, contrary to your initial post, this would possibly suggest that anglicizing first names might even be lower in Canada than the U.S., and therefore the study could possibly be undercounting first generation or foreign national real estate purchasers from mainland China.

I don't know of any studies that you could use to compare patterns in the U.S. with Canada, but anecdotally my impression is that there isn't really much appreciable difference in the degree of anglicization of given names. Multiculturalism as a mentality or even ideology has become really influential in the U.S. in the past couple of decades, to the point where it often gets conflated with politically correct notions of not denigrating the "other." In 1975 a daughter of recent immigrants from Taiwan (the sole source of Mandarin-speaking immigrants before mainland China opened its doors to international travel and emigration) named Lee Tingting certainly would have gone by the name Tina Lee, but these days you see lots of mainland Chinese in the U.S. and Canada with names like Li Tingting (or "Tingting Li" for official purposes when you have to put the surname last instead of first).

As for the issue itself, I'm not sure what find more disturbing: the financial dominance in Vancouver of a specific class of overseas Chinese investor (soaked in the blood and corruption of the Chinese business world--the purchase of those nouveau riche palaces with the Mercs and Range Rovers parked outside is premised upon the smashed skulls and economic misery of the peasant and economic underclasses in China), or the fact that a pol in Canada did a study singling out one ethnic group as being responsible for a deleterious effect on society. This is a tricky issue that will be hard to get right.

[lio45]

Originally Posted by rousseau

... or the fact that a pol in Canada did a study singling out one ethnic group as being responsible for a deleterious effect on society. This is a tricky issue that will be hard to get right.

Out of curiosity, in your mind, whenever one ethnic group *is* being responsible for a deleterious effect on society, are we supposed to always ignore it in all cases?

[rousseau]

Originally Posted by lio45

Out of curiosity, in your mind, whenever one ethnic group *is* being responsible for a deleterious effect on society, are we supposed to always ignore it in all cases?

The tricky part is the danger of the slippery slope. The only examples we have from the past where ethnic groups were accused of having a bad effect on society, well, we know how those went...

My default setting is yes, we should always ignore it. I really can't imagine any case where the cure would not be worse than the disease. So sure, I don't think anyone can plausibly deny anymore that blood-soaked mainland Chinese money is a major factor in making Vancouver unaffordable, but it seems to me that the focus of any policy for maintaining some kind of equilibrium in the housing market should be on rules that apply to everyone across the board while eliminating any rhetoric singling out ethnic minorities.

[geotag277]

Originally Posted by rousseau

Contrarian? So I'm engaging in the knee-jerk contradiction of public or established opinion purely for the sake of the contradiction itself?

Erm...so that's me, and not you?

My entire point was that the study did not necessarily point to foreign buyers based out of mainland China buying property in Canada. The study only determined ancestry of names on those property documents.

I will again point out that we are at a point where we are making arbitrary lines in the sand regarding putting people into boxes based on whether or not their families chose to give them a name which is derived from their own heritage or a name which is chosen such that it makes their children feel more comfortable in a place. The assumption here is: you have an anglicized name? OK, you can count as a Canadian citizen. You don't have an anglicized name? We will just assume you must be from mainland China in this case and you count in those "other" statistics.

Let's be real clear about what we are talking about here.

So, contrary to your initial post, this would possibly suggest that anglicizing first names might even be lower in Canada than the U.S., and therefore the study could possibly be undercounting first generation or foreign national real estate purchasers from mainland China.

How does that follow? The study assumes that anglicized names are domestic and non-anglicized names are individuals from mainland China - therefore, a Canadian citizen with the name "Li Xian" would incorrectly be assigned a "mainland China" buyer and overcount for those numbers.

My assertion is that a name like "Li Xian" is more likely to be the full name of a second generation immigrant in Canada than it is in the USA. And further, owing to Vancouver's already extremely large and rich Chinese history, I would wager that non-anglicized full names for next generation immigrants are probably the most common, because it isn't so strange to name your kid "Li Xian" there, as it would be in some place like Stratford, Ontario.

Once you have a critical mass of cultural influence in a place, these "foreign" elements perpetuate a more comfortable and normal atmosphere for families and their children to honor their cultural heritage.

[cornholio]

Originally Posted by rousseau

The tricky part is the danger of the slippery slope. The only examples we have from the past where ethnic groups were accused of having a bad effect on society, well, we know how those went...

My default setting is yes, we should always ignore it. I really can't imagine any case where the cure would not be worse than the disease. So sure, I don't think anyone can plausibly deny anymore that blood-soaked mainland Chinese money is a major factor in making Vancouver unaffordable, but it seems to me that the focus of any policy for maintaining some kind of equilibrium in the housing market should be on rules that apply to everyone across the board while eliminating any rhetoric singling out ethnic minorities.

The slippery slope is to ignore reality. Chinese Canadians are by my experience by far the most angry, as they should be since they stand to lose the most for obvious reasons. Don't think their blind to this. The study showed that over 70%, 70, not 5 or 10 or 20, 70% of home purchases in a 6 month period in a section of Vancouver that saw the most rapid appreciation in prices were purchased by people with non anglicized mainland Chinese names. Are you saying this should be ignored? Because that is frankly a bloody insane statistic. for reference

And please, I don't want to hear "but people are not anglicizing their names anymore". Just about every single person born in Canada with a few exceptions as I mentioned earlier is given a anglicized (or frenchified) first name, we all know this. If you don't have a anglicized first name you are not born here, for simplicity we can safely state this as a fact and ignore the 0.1% of exceptions. If you are not born here you immigrated here, like me, like my wife, like many Canadians. The immigration rates to Canada, and Vancouver and the source countries with exact numbers are public knowledge. We can take a population of immigrants from x country, and we know their immigrants because of their non anglicized names, and say x percent came this decade, x percent came that decade, this we know. In this case we know that most of the mainland Chinese immigrants with non anglicized names that purchased property in a part of west Vancouver in a 6 month period are either recent immigrants or foreigners. Its as simple as that. We have the data to put together and get within a decent margin of error rate. So yes this study clearly showed that foreign money plays a huge role in the Vancouver market, and most of that foreign money originates from China. This foreign money gets injected in west Vancouver and then cascades all the way to the distant suburbs, it distorts the entire market.

The point is the study was good. The methodology was good. The findings were remarkably shocking, yes shocking. You cant ignore it or bury it or discount it no matter how hard you try or want to.

[geotag277]

Originally Posted by cornholio

The point is the study was good. The methodology was good. The findings were remarkably shocking, yes shocking. You cant ignore it or bury it or discount it no matter how hard you try or want to.

For the record, I think the study was perfectly valid and a valuable exercise.

I also think that we shouldn't be pigeon holing certain ethnic groups because it simply doesn't matter. It is simply an incidental state of the world that individuals from China are part of the fastest growing economy and many individuals there had opportunities to amass large amounts of wealth. Maybe in 20 years, it will be India. Maybe in 30 years it will be Indonesia.

In any "solution" to a problem that involves foreign investors, there should be basic infrastructure in place regardless of the source to "correct" that problem, whatever we as a country decide that problem and solution actually are.

At the end of the day, it starts with data gathering a tad bit more sophisticated than looking at names and determining if they are Western or Chinese in origin.

[rousseau]

Originally Posted by geotag277

The study assumes that anglicized names are domestic and non-anglicized names are individuals from mainland China - therefore, a Canadian citizen with the name "Li Xian" would incorrectly be assigned a "mainland China" buyer and overcount for those numbers.

"Li Xian" would be far more likely to be a foreign national with a student visa or a recently minted Canadian citizen than a second generation immigrant. I don't have any hard data to support that, but I do have a fair amount of familiarity with Chinese culture both in China itself and in the North American diaspora.

I'm not suggesting the following link is conclusive evidence, but it's easy to find this kind of anecdotal chatter: "Why do more Chinese immigrants give their children traditionally European first names than Indian immigrant parents do?"
https://www.quora.com/Why-do-more-Chines...t-names-than-Indian-immigrant-parents-do

Originally Posted by geotag277

My assertion is that a name like "Li Xian" is more likely to be the full name of a second generation immigrant in Canada than it is in the USA.

I don't think there are great differences between Canada and the U.S. in this regard. And again, even so, "Li Xian" is not very likely to be the name of a second generation immigrant anyway. He'd be far more likely to go by "James Li" or something like that.

Originally Posted by geotag277

And further, owing to Vancouver's already extremely large and rich Chinese history, I would wager that non-anglicized full names for next generation immigrants are probably the most common, because it isn't so strange to name your kid "Li Xian" there, as it would be in some place like Stratford, Ontario.

This is probably true. But again, Chinese immigrants generally aren't naming their Canadian-born children "Li Xian." There's a high likelihood that they will have Chinese documentation with "Li Xian" written in Chinese characters, while in the Canadian documentation it would be given as "James Li." At home they would speak Chinese exclusively and he would be addressed as "Li Xian," but with English speakers he would be referred to as "James Li."