Chinese Investors Driving Up Metro Housing Prices

[whatnext]

Originally Posted by Klazu

Yeah, I would be a bit concerned to buy in a building like this. There was recently a news story of a building somewhere in Richmong where all Strata meetings are held in Chinese language, as well as minutes that were posted to non-participants. There was someone that didn'tspeak Chinese also owning in the building and it was a major pain for him not knowing what was going on!

As a tenant such doesn't affect me, but it is something to think about when buying. Our landlord is a local investor that has a portfolio of condos in Metro Vancouver. Let's see how long we are able to hold on to this amazing place, times being as crazy as they are...

Yep, remember when posters here tried to convince everyone it was "just a West Side SFH" problem? I wonder how many condos your landlord owns. How much of the price increases are driven by these kind of buyers? You're smart to just rent, it would be crazy to buy in this market.

[whatnext]

Originally Posted by Stingray2004

Will say it again. Back in the late 1980's folk from Hong Kong inundated the SFD residential real estate market in Metro Vancouver... esp. Richmond and the west side of Van City proper - they changed the demographic landscape thereto forever. As well as commercial real estate.

That was on top of pent-up demand from the local market as well as net inter-provincial inflows. Yes, SFD housing prices spiked. But this from today:



http://www.theglobeandmail.com/real-...ticle29842167/

Holy fuck! 41% in just one year? I grew up in "back-water" Tsawwassen and have both family and a good chunk of friends there. No "Chinese" conspiracy in terms of recent SFD purchases thereto.

Just a matter of a great area to live in combined with minimal new SFD being constructed in Metro Van at large. Land is just too expensive with both physical constraints as well as the ALR.

And another 1 million are expected to reside within Metro Vancouver within 40 years? Imagine the price consequential thereto.

Yep. Houston... we've got a problem.

Ever heard of White Flight? It's not just for American inner cities anymore.

I know several people who have decided to cash out of Vancouver's West Side and Richmond. Why not, if somebody is crazy enough to pay these ludicrous prices. Their old neighbourhoods are being hollowed out, with many empty homes. And the new residents aren't very neighbourly, keeping mostly to themselves.

[trofirhen]

Originally Posted by whatnext

Ever heard of White Flight? It's not just for American inner cities anymore.

I know several people who have decided to cash out of Vancouver's West Side and Richmond. Why not, if somebody is crazy enough to pay these ludicrous prices. Their old neighbourhoods are being hollowed out, with many empty homes. And the new residents aren't very neighbourly, keeping mostly to themselves.

I think what you're referring to, regrettably for the city, is a future form of "ghettoization," in this case rich, of another much different culture, and unwilling to embrace their hosts.
This will, and is changing the very personality and nature of the city. Economics is driving it, and there's not a whole lot you can do about that*1. I sometimes worry about my city's future.
*1: Except change federal law for such property overseas investment havens.

[djmk]

I wonder what will happen to property values when the baby boomers start dying off en mass. They are a significant portion of our population, they are not being replaced by either new babies or immigrants and the early boomers just turned 71.

20 years from now it might be a totally different city.

[Pinion]

Originally Posted by djmk

I wonder what will happen to property values when the baby boomers start dying off en mass. They are a significant portion of our population, they are not being replaced by either new babies or immigrants and the early boomers just turned 71.

20 years from now it might be a totally different city.

My 70 year old boomer parents have been living off house income for 10 years now. Cleveland dam area to Deep Cove to Central Lonsdale to Parkgate has led to multi-six figures in their pockets each time. At least two of those sales were to Chinese people.

The last move was almost to Salt Spring Island but they pulled out after making an offer. The gulf islands seem to be a last stop for many of the "old stock."

[trofirhen]

Originally Posted by djmk

I wonder what will happen to property values when the baby boomers start dying off en mass. ..........

20 years from now it might be a totally different city.

Yes precisely, as I mentioned once. Depending on birth rates, Vancouver could become a minority-Caucasian city, (many other ethnicites worldwide contributing) but a lot of sort of "displaced" young, predominantly Euro - and other - Canadians, who cannot earn enough money to buy, and have to both work, use daycare etc - to pay the rent; ok. maybe the mortgage.
And of course, people who didn't inherit mummy and daddy's estate ... because there was no money to inherit!
A big problem is, although Vancouver is diverse in economy, it's not diverse enough on a large scale. If it were to become (for ex )a major banking centre like Charlotte NC,
or aggressively go after making itself a city that attracted big pharma companies (we have the tech, as I've said before excuse me), it could raise salaries to a "buying" level."

This may seem a rather oblique reply to you statement, but I think it will figure greatly into it even moreso in the future.

[logicbomb]

White flight? Guys, this is not a situation like the 50's where we had an influx of working-class/poor immigrants settling into the City. The baby boomers/current residents are capitalizing off this insane housing market and fleeing to cheaper but desirable areas such as cities/towns in the Interior and Vancouver Island (coincidentally, these locations have a higher percentage of Caucasians)

I think we can label this phenomena as "working class/retiree flight." Class is a more predominant factor over race.

Originally Posted by djmk

I wonder what will happen to property values when the baby boomers start dying off en mass. They are a significant portion of our population, they are not being replaced by either new babies or immigrants and the early boomers just turned 71.

20 years from now it might be a totally different city.

I doubt it. Vancouver is the most desirable city in the world. Most of my former clients that expressed their interest to move here have ended up buying property. You have a plethora of newly settled immigrants and refugees that are keen to work their way up; and many of their children will be reaching their mid 20's when all the baby boomers "expire." Remember, the introduction of transient students, refugees and immigrants allows for a competitive pool for the labour market (along with the housing market). An employer I know is loving the boom of temporary foreign students as they provide a cheap and replaceable source of labour in the downtown core.

I think most locals will move out at some point. We are pretty much banking on the tech sector/real estate for employment. Tourism and hospitality is up for debate, but these jobs are paying way less. It just seems like a reckless and dangerous model...

[djmk]

Originally Posted by Pinion

My 70 year old boomer parents have been living off house income for 10 years now. Cleveland dam area to Deep Cove to Central Lonsdale to Parkgate has led to multi-six figures in their pockets each time. At least two of those sales were to Chinese people.

The last move was almost to Salt Spring Island but they pulled out after making an offer. The gulf islands seem to be a last stop for many of the "old stock."

that brings up a good question, what happens to these properties in these "retirement" places like the islands, vernon, etc

[djmk]

Originally Posted by logicbomb

I doubt it. Vancouver is the most desirable city in the world. Most of my former clients that expressed their interest to move here have ended up buying property. You have a plethora of newly settled immigrants and refugees that are keen to work their way up; and many of their children will be reaching their mid 20's when all the baby boomers "expire." Remember, the introduction of transient students, refugees and immigrants allows for a competitive pool for the labour market (along with the housing market). An employer I know is loving the boom of temporary foreign students as they provide a cheap and replaceable source of labour in the downtown core.

Just a quick internet search:

"As the Canadian population ages, immigration is increasingly the major source of population growth. At the moment, more than 60 per cent of population growth comes from immigration, but that will approach 100 per cent by 2030. If Canada wants to maintain its population structure, or at least the proportion of the population that’s over 65, it would have to start admitting about three to four times its annual intake of roughly 250,000 immigrants, experts say."

source: http://www.theglobeandmail.com/news/...article542480/

that to me sounds like trouble. That reads that Canada will need 750,000 to 1,000,000 immigrants per year to maintain population. I think that's impossible. Maybe Vancouver will be different than Vernon, but how different?

[GMasterAres]

Originally Posted by djmk

I wonder what will happen to property values when the baby boomers start dying off en mass. They are a significant portion of our population, they are not being replaced by either new babies or immigrants and the early boomers just turned 71.

20 years from now it might be a totally different city.

They are being replaced. There was only a boomer population in Canada the US, and in Australia. All the other countries on the planet don't have a "baby boomer" population.

So our immigration rates and external investment more than make up for any loss we'll have from this generation dying in the future. That and the boomers won't all die at once. It will take some time.

There's a bit of a myth surrounding the notion that the baby boomers are "not being replaced" and that the younger generation is decreasing. The reality is that the younger generation increases every year and has a normal stead pace of increase statistically although it is small.

As a quick example, baby boomers in North America as of 2015 are no longer the majority of people in the work force. They've been surpassed by the Millenials (19 to 35) who statistically now outnumber the boomers in the work force (about 70 million in North America). So the boomers have been "replaced" in the work force.

What isn't happening though is the boomers aren't retiring and from a longevity standpoint, are living longer. So it isn't a case of decreasing supply but rather a case of increasing demand.

[GMasterAres]

Originally Posted by djmk

Just a quick internet search:

"As the Canadian population ages, immigration is increasingly the major source of population growth. At the moment, more than 60 per cent of population growth comes from immigration, but that will approach 100 per cent by 2030. If Canada wants to maintain its population structure, or at least the proportion of the population that’s over 65, it would have to start admitting about three to four times its annual intake of roughly 250,000 immigrants, experts say."

source: http://www.theglobeandmail.com/news/...article542480/

that to me sounds like trouble. That reads that Canada will need 750,000 to 1,000,000 immigrants per year to maintain population. I think that's impossible. Maybe Vancouver will be different than Vernon, but how different?

True if everything stays as it is today. But as the boomers start to die out the burden on our younger generation will ease. You will likely see housing prices decrease (not burst) but decrease a normal amount. You'll see higher paying jobs free up so the Millenials can finally move into them and earn better wages. This will increase their buying power. You're also going to see the burden on our health care and pension systems ease as the boomer bubble starts to flatten which will also increase money in people's pockets.

When people suddenly have more money, they are more inclined to have more children.

Those are just some of the factors that can help us not need to get to 100% immigration to increase our population. There are also other areas like affordable child care for example.

Another option is we have World War 3 and go through another baby boom.... though I think it best to avoid that.

[WBC]

Originally Posted by Stingray2004

Will say it again. Back in the late 1980's folk from Hong Kong inundated the SFD residential real estate market in Metro Vancouver... esp. Richmond and the west side of Van City proper - they changed the demographic landscape thereto forever. As well as commercial real estate.

That was on top of pent-up demand from the local market as well as net inter-provincial inflows. Yes, SFD housing prices spiked. But this from today:



http://www.theglobeandmail.com/real-...ticle29842167/

Holy fuck! 41% in just one year? I grew up in "back-water" Tsawwassen and have both family and a good chunk of friends there. No "Chinese" conspiracy in terms of recent SFD purchases thereto.

Just a matter of a great area to live in combined with minimal new SFD being constructed in Metro Van at large. Land is just too expensive with both physical constraints as well as the ALR.

And another 1 million are expected to reside within Metro Vancouver within 40 years? Imagine the price consequential thereto.

Yep. Houston... we've got a problem.

The thing is that people always assume that any trend is going to continue indefinitely. That leads to projections such as: we will run out of oil, oil will cost $500 a barrel, gold will be $5000 an ounce or the famous thing from the 1980s - Japanese will own everything.

In 20-30 years Vancouver might not be the place to go...The Chinese may decide that sending their kids to study and live in Vancouver (with its rather average universities - check the world rankings) is not the best way to educate them (remember in the 19th and 20th century all the rich Americans sent their kids to study in great Universities of Europe). It is actually likely that Asia will be the place to be from the business, education and cultural perspective. One day English may not be the language of world economy. One day we may find it actually hard to find 250,000 skilled immigrants to come here, especially if they are facing crazy real estate prices and poor or stagnating economy.

However, if you take away the real estate boom in BC, you would be taking away 20- 25% of our economy when you take into account all the related economic activity. The city taxes would spike, the provincial taxes would need to be increased and a ton of people would be out of work. All those people who have banked on their houses paying for their retirements and have done nothing to save would be dirt poor. We would be facing problems that most of the western and southern Europe have been facing for decades. Not that I am advocating the current craziness to continue, but it is something to think about...

[a very long weekend]

^ this is one of the reasons that rail infrastructure like skytrain should be built at breakneck speed right now. also a reason for building as many towers as possible, even if a great many of their units are purchased by foreigners. once that capacity is built up, it's there forever. even if vancouver goes bust (unlikely, but gradual decline is perfectly possible), future generations will have automated trains and places to live. toronto is making a huge mistake not aggressively building out subway capacity right now. that place should have a chicago level system and it's barely at montreal level. when you see how these chinese cities are building infrastructure and productive capacity, it's impossible not to imagine a future in which north america is seen as a market and a vacation destination, not a place to do any real business.

[whatnext]

Originally Posted by logicbomb

White flight? Guys, this is not a situation like the 50's where we had an influx of working-class/poor immigrants settling into the City. The baby boomers/current residents are capitalizing off this insane housing market and fleeing to cheaper but desirable areas such as cities/towns in the Interior and Vancouver Island (coincidentally, these locations have a higher percentage of Caucasians)

I think we can label this phenomena as "working class/retiree flight." Class is a more predominant factor over race.

I doubt it. Vancouver is the most desirable city in the world. Most of my former clients that expressed their interest to move here have ended up buying property. You have a plethora of newly settled immigrants and refugees that are keen to work their way up; and many of their children will be reaching their mid 20's when all the baby boomers "expire." Remember, the introduction of transient students, refugees and immigrants allows for a competitive pool for the labour market (along with the housing market). An employer I know is loving the boom of temporary foreign students as they provide a cheap and replaceable source of labour in the downtown core.

I think most locals will move out at some point. We are pretty much banking on the tech sector/real estate for employment. Tourism and hospitality is up for debate, but these jobs are paying way less. It just seems like a reckless and dangerous model...

I'd be curious to know what kind of jobs rely on a boom of temporary foreign students? Retail and restaurant?

There's a lot of hysteria over "we must have new immigrants to replace and support an aging population". It ignores a couple facts, such as that we are moving away from an economy that offers a lot of well paid unskilled jobs. Second, if you aren't filing income taxes here, you're not contributing much toward funding healthcare or retirement benefits.

[Cypherus]

Polygon Home's newest townhome development in Langley already had buyers camped out Wednesday night before the Saturday unveiling. They emailed me last night to tell me that the "First in line" buyers will likely purchase all the Phase 1 units on opening day, so don't bother coming until the panic wears off. When the suburbs are experiencing sell outs on opening day and panic buying, something tells me that a correction will happen because unlike previous years, panic buying in the suburbs is starting to be noticed and this is not sustainable.

[Klazu]

Originally Posted by whatnext

I wonder how many condos your landlord owns. How much of the price increases are driven by these kind of buyers?

We were given the impression that at least five, if not more. He apparently lives in the Metro himself and owns properties in many cities around the Metro. This is very common these days and during our home hunt we saw several properties with similar kind of ownership. One rarely gets to know these landlords in person, as everything is done through a Rental Agency and all paper have Rental Agent's, not landlord's, name.

But everything worked out fine for us and I just hope that we are given the opportunity to keep living in this unit for years to come. I am not kidding when I say that there are not many units like this in whole Metro.

Originally Posted by whatnext

You're smart to just rent, it would be crazy to buy in this market.

Yeah, the market is just crazy. We make a pretty good income but we wouldn't even think about buying here. Sure, we could afford having a nice place in the suburbs (not this unit though), but in Vancouver we could only afford a small condo. As we enjoy urban lifestyle and having some space in the apartment, renting is the only possibility. And even then we had to leave Downtown, as a similar place would rent for over $6000/month in Downtown. We are not paying anything near that now in Metrotown, although prices here are also on an uptick.

[Vin]

This provides a better perspective why the government won't do anything about foreign money coming in.....

Don't think foreign money is providing jobs, then what is..... Forestry? Mining? Oil? Even better: local home-grown economy?

Originally Posted by zahav

I wasn't sure if this should get it's own thread since it's BC-wide, but didn't know how many people look at the threads outside Vancouver.

The labour figures for April were released and BC has pulled so far out in front of the other provinces in terms of employment (this has been a trend for a couple years now, but seems to keep getting stronger!). Can definitely see regional divides.

From the report:
In April, employment increased by 13,000 in British Columbia, and the unemployment rate fell 0.7 percentage points to 5.8%—the lowest rate among the provinces. This is the first time that British Columbia has had the lowest unemployment rate among all the provinces since comparable data became available in 1976. On a year-over-year basis, employment in the province was up 110,000 (+4.9%). A strong upward trend was observed throughout the 12 months, driven by growth in wholesale and retail trade, health care and social assistance, and construction.
http://www.statcan.gc.ca/daily-quoti...6a-eng.htm?HPA

BC accounted for the most growth in Canada over the last year, not even just by %, in absolute number too (+110,400 jobs, +4.9% while Ontario was next at +95,700, but only +1.4%). NS was the only other province to gain, +1.2%, 5,000 jobs, every other province lost jobs year over year. No wonder making national policy on economy is tricky!

4.9% employment growth for BC (that's up there or even higher than Alberta's in its prime a few years ago), and the lowest unemployment in the country for the first time in history. Pretty impressive on its own, but especially when comparing to the lacklustre situation in most other places.

[LeftCoaster]

Originally Posted by Vin

This provides a better perspective why the government won't do anything about foreign money coming in.....

Don't think foreign money is providing jobs, then what is..... Forestry? Mining? Oil? Even better: local home-grown economy?

While real estate is certainly providing job growth, the majority of the growth we are seeing is in technology and digital media and logistics and distribution. Financial services is also showing a decent uptick.

Going forward most estimates peg W&R trade, non-commercial services and transportation to be Vancouver's leading sources of employment growth.

Not sure how many people it takes to flip a house... but it's not providing a ton of employment.

[cornholio]

In my brothers case he definitely sold and left the Kilarney area because it was a ethnic enclave. His reasons were #1 couldn't talk to or relate to his neighbors #2 his kid was not in a inclusive or positive environment #3 a big one, they shut down all the pubs as the demographics did not support them (last to go was Jaguars). #4 the next door house was a rental owned by a Chinese investor who did not invest money into it and one shitty tenant after another.

His final straw was when a very large Filipino family moved into the rental house and proceeded to "hang out" outside of it almost 24-7 with their extended families and friends. Non stop talking right by his window. His words were I believe I feel like I live in the middle of a Manila slum, I am out of here.

Now he downsized to Stevston to a townhouse complex that is very mixed. Him and his wife have government jobs and will sell and leave the region when they retire, the only reason they didn't is because of jobs.

So yeah that's one example. Most people I know are slowly leaving.

[WBC]

Originally Posted by cornholio

In my brothers case he definitely sold and left the Kilarney area because it was a ethnic enclave. His reasons were #1 couldn't talk to or relate to his neighbors #2 his kid was not in a inclusive or positive environment #3 a big one, they shut down all the pubs as the demographics did not support them (last to go was Jaguars). #4 the next door house was a rental owned by a Chinese investor who did not invest money into it and one shitty tenant after another.

His final straw was when a very large Filipino family moved into the rental house and proceeded to "hang out" outside of it almost 24-7 with their extended families and friends. Non stop talking right by his window. His words were I believe I feel like I live in the middle of a Manila slum, I am out of here.

Now he downsized to Stevston to a townhouse complex that is very mixed. Him and his wife have government jobs and will sell and leave the region when they retire, the only reason they didn't is because of jobs.

So yeah that's one example. Most people I know are slowly leaving.

It's sad but true that the most diverse regions are also the most segregated...

See this http://fivethirtyeight.com/features/...st-segregated/