Chinese Investors Driving Up Metro Housing Prices

[WBC]

I think that what would be most helpful in this situation is for Federal and Provincial governments to invest in non-market cooperative housing that would offer locals ability to pay reasonable rents. These programs exist in Western and Northern Europe where it is far less common for people to own property. Rather, large condo/townhouse complexes are owned by government or coops and mortgaged on long term 50-60 year mortgages. As a tenant, you pay a part of that mortgage. These things exist in Canada, but are a tiny fraction of all the housing types. Unfortunately, these programs were abandoned by the feds in favor of CHMC underwriting everything under the Sun which contributed to the current situation.

As for the assessment of the cause of the problem this article I think paints a correct picture:

http://www.vancouversun.com/business/tim...ibc+economist+weighs/11917445/story.html

...
“I asked many questions and after a few bottles of wine I got some answers. And the picture that is emerging is the following — pure foreign investment is probably much smaller than perceived by many,” writes Tal.

What has emerged is what the economists calls a satellite family situation in which the money is coming from outside the country but family members — mostly wives, children or students reside in Canada. That scenario is is probably more common than perceived, he says.

“Flipping is not the main motivation here and their down payment is often significant,” says Tal.
...

[retro_orange]

Originally Posted by WBC

I think that would would be most helpful in this situation is for Federal and Provincial government to invest in non-market cooperative housing that would offer locals ability to pay reasonable rents. These programs exist in Western and Northern Europe where it is far less common for people to own property. Rather large condo/townhouse complexes are owned by government or coops and mortgaged on long term 50-60 year mortgages. As a tenant you pay a part of that mortgage. These things exist in Canada, but are a tiny fraction of all the housing types. Unfortunately, these programs were abandoned by the feds in favor of CHMC underwriting everything under the Sun which contributed to the current situation.

As for the assessment of the cause of the problem this article I think paints a correct picture:

http://www.vancouversun.com/business/tim...ibc+economist+weighs/11917445/story.html

...
“I asked many questions and after a few bottles of wine I got some answers. And the picture that is emerging is the following — pure foreign investment is probably much smaller than perceived by many,” writes Tal.

What has emerged is what the economists calls a satellite family situation in which the money is coming from outside the country but family members — mostly wives, children or students reside in Canada. That scenario is is probably more common than perceived, he says.

“Flipping is not the main motivation here and their down payment is often significant,” says Tal.
...

I totally agree that the government should be building more housing, seems they won't begin until it's too late.

That article is full of excuses to make being politically correct more important then social justice and equality. The wine and dine business meeting was just a media stunt to bolster the image of the top real estate agents to confirm and maintain that their business model is best. Those who are most successful are best at manipulating the market in their favor and maintaining an air of uncertainty in the media to cloud out what the average person can see right in front of them because the average person does not benefit from their business model.

The quote "pure foreign investment is probably much smaller than perceived by many" is full of their B/S. Of course they will say that! A car dealer will say that "Car ownership is probably must less of a problem to the environment then perceived by many" and an oil exec. would say "climate change is probably much less significant then perceived by many". The article is purely to maintain the status quo and it wouldn't surprise me if the writer went to this meeting also got other gifts aside from a free meal and booze.

[WBC]

Originally Posted by retro_orange

The quote "pure foreign investment is probably much smaller than perceived by many" is full of their B/S. Of course they will say that! A car dealer will say that "Car ownership is probably must less of a problem to the environment then perceived by many" and an oil exec. would say "climate change is probably much less significant then perceived by many". The article is purely to maintain the status quo and it wouldn't surprise me if the writer went to this meeting also got other gifts aside from a free meal and booze.

I cannot offer an real numbers as I do not have them and so this is my speculation. I live in Metrotown in a condo building that is full of immigrants. I am also in strata council. The number of families living in the building without one parent while the other is away (usually father) far exceeds the number of empty units in the building. There are also young adults living here that are obviously supported from somewhere else. This is not just Chinese. It includes Lebanese, other middle eastern families and people from Korea and Taiwan (that I know off). I have parents of my son's friend openly saying that they go back to Hong Kong periodically as and I quote "they cannot make any real money here".

I have just hard time fathoming an idea that you would go to a country in which you have no, to little legal rights, buy a property as a foreigner and rent it or leave it empty. Does it happen? Sure...Is it a big trend? I would say no. I think that given how easy it is to get permanent residency in Canada and how large the number of immigrants coming in is (250-300K Canada wide) we are facing a problem that is caused by relatively well off immigration. To make meters worse we have low interest rates, and governments (feds, provincial and local) that have committed to real estate industry as a major source of growth, employment and revenue.

[whatnext]

Originally Posted by WBC

I cannot offer an real numbers as I do not have them and so this is my speculation. I live in Metrotown in a condo building that is full of immigrants. I am also in strata council. The number of families living in the building without one parent while the other is away (usually father) far exceeds the number of empty units in the building. There are also young adults living here that are obviously supported from somewhere else. This is not just Chinese. It includes Lebanese, other middle eastern families and people from Korea and Taiwan (that I know off). I have parents of my son's friend openly saying that they go back to Hong Kong periodically as and I quote "they cannot make any real money here".

I have just hard time fathoming an idea that you would go to a country in which you have no, to little legal rights, buy a property as a foreigner and rent it or leave it empty. Does it happen? Sure...Is it a big trend? I would say no. I think that given how easy it is to get permanent residency in Canada and how large the number of immigrants coming in is (250-300K Canada wide) we are facing a problem that is caused by relatively well off immigration. To make meters worse we have low interest rates, and governments (feds, provincial and local) that have committed to real estate industry as a major source of growth, employment and revenue.

(Bold mine) That is one of the cruxes of the problem. Canada never should have sold citizenship or allowed passports of convenience. If you're applying for citizenship, make the commitment. What those people are doing is driving up housing prices for everyone who works and lives here. If big daddy wants to stash his wife and kids here while they go to school, make them rent.

Another chilling aspect is covered by Frank Ching in the Globe & Mail recently.

...Much has been said about China’s growing nationalism but little attention has been paid to its increasing assertion of something akin to sovereignty over ethnic-Chinese who are citizens of other countries. While this is particularly noteworthy in Hong Kong, it is also true in the United States, Australia and other countries.

What China wants is for foreign citizens of ethnic-Chinese background to be loyal to the “motherland” – meaning China – regardless of their citizenship and to work to further the interests of China. This was disclosed in the People’s Daily a couple of years ago when it encouraged “more and more overseas Chinese to participate in the local political life.”...

http://www.theglobeandmail.com/opinion/the-long-reach-of-beijing/article29930527/

[Stingray2004]

Originally Posted by whatnext

Another chilling aspect is covered by Frank Ching in the Globe & Mail recently.

...Much has been said about China’s growing nationalism but little attention has been paid to its increasing assertion of something akin to sovereignty over ethnic-Chinese who are citizens of other countries. While this is particularly noteworthy in Hong Kong, it is also true in the United States, Australia and other countries.

What China wants is for foreign citizens of ethnic-Chinese background to be loyal to the “motherland” – meaning China – regardless of their citizenship and to work to further the interests of China. This was disclosed in the People’s Daily a couple of years ago when it encouraged “more and more overseas Chinese to participate in the local political life.”...

http://www.theglobeandmail.com/opinion/the-long-reach-of-beijing/article29930527/

Sorry. But ya are beginning to wander into conspiracy theory territory here. Ya know... was there either a 2nd or 3rd man on the grassy knoll on Dealey Plaza in Dallas back in 1963?

I'm sure that a very small segment of Chinese immigrants have loyalty to the Chinese gov't.

BTW, the first thing that came to my mind, with your post, was the pre-1939 German-American Bund. In that vein, millions of Americans were German immigrants... but a very small portion held allegiance to the "fatherland", which culminated in 20,000 showing up at Madison Square Garden in 1939 - many wearing storm-trooper outfits and regalia.

https://en.wikipedia.org/wiki/German_American_Bund

Give it a rest man.

[Migrant_Coconut]

Originally Posted by whatnext

...Much has been said about China’s growing nationalism but little attention has been paid to its increasing assertion of something akin to sovereignty over ethnic-Chinese who are citizens of other countries. While this is particularly noteworthy in Hong Kong, it is also true in the United States, Australia and other countries.

What China wants is for foreign citizens of ethnic-Chinese background to be loyal to the “motherland” – meaning China – regardless of their citizenship and to work to further the interests of China. This was disclosed in the People’s Daily a couple of years ago when it encouraged “more and more overseas Chinese to participate in the local political life.”...

Completely off the mark; while some of Vancouver's Chinese probably have some nationalistic tendencies, the fanatical ones are content to stay at home and burn Toyotas.

What we have here are nouveau riche Mainlanders and Hong Kongers fleeing a feared market implosion, or simply wanting to park their money in a nearby tax shelter, and their kids in a free school. They possess little loyalty to China... or to Canada... or to anything except the next big paycheck. Don't count on them sticking around if things go sour - which is something that BC's government is probably going to learn the hard way.

[logicbomb]

Originally Posted by Migrant_Coconut

Completely off the mark; while some of Vancouver's Chinese probably have some nationalistic tendencies, the fanatical ones are content to stay at home and burn Toyotas.

What we have here are nouveau riche Mainlanders and Hong Kongers fleeing a feared market implosion, or simply wanting to park their money in a nearby tax shelter, and their kids in a free school. They possess little loyalty to China... or to Canada... or to anything except the next big paycheck. Don't count on them sticking around if things go sour - which is something that BC's government is probably going to learn the hard way.

This is tied to the Marxist Theory of the Transnational Capitalist Class.

The theory of the Transnational Capitalist Class has two main principles:

1. The transnational capitalist class collaborate to benefit their own interests;

2. Nation states have less control over transnational capitalist corporations aiding in globalization.

http://www.uni-muenster.de/PeaCon/global-texte/r-m/144sklair.pdf

I will continue to say this...any action (inadvertent or not) to halt foreign investment could sink us all.

[whatnext]

Originally Posted by Stingray2004

Sorry. But ya are beginning to wander into conspiracy theory territory here. Ya know... was there either a 2nd or 3rd man on the grassy knoll on Dealey Plaza in Dallas back in 1963?

I'm sure that a very small segment of Chinese immigrants have loyalty to the Chinese gov't.

BTW, the first thing that came to my mind, with your post, was the pre-1939 German-American Bund. In that vein, millions of Americans were German immigrants... but a very small portion held allegiance to the "fatherland", which culminated in 20,000 showing up at Madison Square Garden in 1939 - many wearing storm-trooper outfits and regalia.

https://en.wikipedia.org/wiki/German_American_Bund

Give it a rest man.

You left out one crucial detail in your analogy. By and large German-Americans (or German-Canadians) were not deriving their income from businesses located in Germany pre-WWII. They were participating in North America more or less fully, while holding onto their ethnic traditions.

I realize you would like this to just go away, as it terrifies any BC Liberal supporter. After all they are vulnerable on it, they won't act on the issue for fear of angering the Bob Rennies of the world. In short it is the club the other parties will beat them around the ears with next election.

[csbvan]

How anyone can justify Burnaby being as pricey as New York city regardless of political leanings seems ridiculous to me. It's a problem. Left, right whatever we all have to realize this is insane. Truly the biggest issue to face BC in decades. I'm a corporate frickin lawyer and I can't believe what I'm witnessing.

[whatnext]

I should have added, it is not the case that the majority of immigrants from China are making their money in China by collaborating with the corrupt Communist regime. Of course not, however there is a significant amount of money that is being funelled from that way and it is what is distorting the housing market.

As to those who dispute Frank Ching's article, I suggest you do a little more research. The Red Chinese government has been very cunning about how they exercise their influence around the world. Rather than the bombastic American tactic of going in with guns blazing, they wield their power much more subtly. However, we should never make the mistake of treating Communist China as a friend or ally.

[retro_orange]

B.C.’s Asian influence figures prominently in Panama Papers
Large percentage of B.C. addresses in leaked database linked to shareholders of business entities in China, Hong Kong and Taiwan

https://www.biv.com/article/2016/5/bcs-asian-influence-figures-prominently-panama-pap/

More than 40% of 200 British Columbia addresses found by Business in Vancouver in the Panama Papers database are linked to shareholders of entities in China, Hong Kong and Taiwan.

Those addresses range from a downtown Vancouver law firm to a subsidized housing complex near a Richmond high school, but the files do not indicate the number of shares held in the companies.

quote from: https://www.biv.com/article/2016/5/bcs-asian-influence-figures-prominently-panama-pap/

[retro_orange]

Originally Posted by logicbomb

I will continue to say this...any action (inadvertent or not) to halt foreign investment could sink us all.

I'd say it's for the best IMO. If we are more self sufficient as a country we will be able to better cater to all classes and income levels. Because many lower paying blue collar jobs went to other countries for even cheaper labour; it created many social problems in the cities that relied on those blue collar jobs because there is not enough service level jobs to accompany that work force. That's how Wal-Mart and other large companies get away with paying minimum wages, there's always someone more desperate to replace the people who demand more. I have been in that situation.

[Migrant_Coconut]

Originally Posted by whatnext

As to those who dispute Frank Ching's article, I suggest you do a little more research. The Red Chinese government has been very cunning about how they exercise their influence around the world. Rather than the bombastic American tactic of going in with guns blazing, they wield their power much more subtly. However, we should never make the mistake of treating Communist China as a friend or ally.

Here's the link, just so we don't have to keep scrolling back up. True, in the sense that the Communist Party considers all ethnic Chinese "theirs." That's about it. Despite their attitude, the idea of the Communists-in-name-only influencing foreign policy through overseas Chinese is laughable, especially when they can barely influence Hong Kong. At best, they've managed to drive prices up (via Mainlander spending sprees), install cronies as leading politicians, and create a PLA Boy Scouts group. The protests for true democracy continue regardless.

Again, the hardcore nationalists types tend to stay home and vent their grievances toward all non-PRCs via street riots and the internet - they don't immigrate any more than Klansmen or Trump supporters, usually for the same reasons.
On the other hand, many of the ethnic Chinese here are born and raised Canadians. Some came here at an early age, or immigrated from another overseas community like Singapore or Taiwan (both of which can't stand PRCs either). Exactly how loyal can you be to a country you can't remember/have never seen before/are already conditioned to dislike? This isn't Irish-Americans supporting the IRA - in fact, China's more likely to be the oppressor. Very unappealing to anybody raised in a liberal democracy.

Yes, America, Europe, Russia, et all are playing Risk while China plays Monopoly. But that translates into buying influence by investing in developing countries, or bullying the rest of Asia out of "your" territory because some of those useless, uninhabited islands might have oil deposits. There is no Long Game involving overseas sleeper agents, period.

[logicbomb]

Originally Posted by retro_orange

I'd say it's for the best IMO. If we are more self sufficient as a country we will be able to better cater to all classes and income levels. Because many lower paying blue collar jobs went to other countries for even cheaper labour; it created many social problems in the cities that relied on those blue collar jobs because there is not enough service level jobs to accompany that work force. That's how Wal-Mart and other large companies get away with paying minimum wages, there's always someone more desperate to replace the people who demand more. I have been in that situation.

In every recession, the "working poor" or middle class are the ones that suffer most. The more affluent suffer some losses but nothing dehabilitating. Many people who work in construction and retail depend off the jobs that foreign investment generate. It's not like we can turn back time and bring all the industrial jobs back...If the real-estate market crashes, most people who depend off these will be completely screwed.

[cornholio]

https://news.vice.com/article/canadas-na...-politicians-are-under-foreign-influence

CSIS chief disagrees.

http://www.theglobeandmail.com/news/poli...boss-says/article4392618/?service=mobile

Usually I stay clear of topics that attract conspiracy accusations....but when the active chief of CSIS says it's so then...
I join in.
He specifically singled out China as grooming students in Canada for politics that are loyal to China. And more.

[CanSpice]

Originally Posted by cornholio

https://news.vice.com/article/canadas-na...-politicians-are-under-foreign-influence

CSIS chief disagrees.

http://www.theglobeandmail.com/news/poli...boss-says/article4392618/?service=mobile

Usually I stay clear of topics that attract conspiracy accusations....but when the active chief of CSIS says it's so then...
I join in.
He specifically singled out China as grooming students in Canada for politics that are loyal to China. And more.

Those stories are a year and four years old, respectively. Richard Fadden was director of CSIS until May 2013. He's also no longer the National Security Advisor to the Prime Minister, having resigned that position three weeks ago. To be fair he said the second bit while he was director of CSIS.

That's not to say that this situation isn't still true; it probably is, although he did get a lot of criticisms for his remarks. I'm just pointing out that he hasn't been the director of CSIS for three years, although he has held a fairly high position in the Department of Defense and in government since then.

[csbvan]

A BIV article on real estate prices potentially leading to a hollowing out of corporate Vancouver:

https://www.biv.com/article/2016/5/report-vancouvers-economy-highlights-threat-reside/

[trofirhen]

Originally Posted by csbvan

A BIV article on real estate prices potentially leading to a hollowing out of corporate Vancouver:

https://www.biv.com/article/2016/5/report-vancouvers-economy-highlights-threat-reside/

So what is to become of Vancouver as a whole? Sure there will be ultra-expensive ghettos surrounded by a sea of overpriced suburbs, without the high-paying, jobs needed to support that, but then what?
Government subsidies or rent-controls to keep things in line for people who want to live here? Hardly in BC there wouldn't be, whoever was in power.
San Francisco has super high housing costs, but it has the hot economy, and the role of a major economic / IT / financial centre to go with it.
In Vancouver, something's gonna go BOOM - FISssssss ... and there won't be a real economy to support the crazy prices. The city will stagnate into a rich resort, with lower rents perhaps, but only service jobs to fill them.
Correct me if I'm wrong (and I hope I am)! The super high prices are like a tumour, blocking normal function, sucking the life out of the city.

[retro_orange]

Originally Posted by trofirhen

So what is to become of Vancouver as a whole? Sure there will be ultra-expensive ghettos surrounded by a sea of overpriced suburbs, without the high-paying, jobs needed to support that, but then what?
Government subsidies or rent-controls to keep things in line for people who want to live here? Hardly in BC there wouldn't be, whoever was in power.
San Francisco has super high housing costs, but it has the hot economy, and the role of a major economic / IT / financial centre to go with it.
In Vancouver, something's gonna go BOOM - FISssssss ... and there won't be a real economy to support the crazy prices. The city will stagnate into a rich resort, with lower rents perhaps, but only service jobs to fill them.
Correct me if I'm wrong (and I hope I am)! The super high prices are like a tumour, blocking normal function, sucking the life out of the city.

I think you are right on the money with that one. I doubt anything significant can be done by government at this point because if they do something that brings property values down in the slightest; landowners and real estate investors will be demonizing them for it. Money talks, no matter how unintelligent the conversation is. The only thing that can and will happen is an implosion. Developers will not step up to the plate, they will only build enough and at a pace slow enough to maintain high property values.

[csbvan]

Originally Posted by trofirhen

So what is to become of Vancouver as a whole? Sure there will be ultra-expensive ghettos surrounded by a sea of overpriced suburbs, without the high-paying, jobs needed to support that, but then what?
Government subsidies or rent-controls to keep things in line for people who want to live here? Hardly in BC there wouldn't be, whoever was in power.
San Francisco has super high housing costs, but it has the hot economy, and the role of a major economic / IT / financial centre to go with it.
In Vancouver, something's gonna go BOOM - FISssssss ... and there won't be a real economy to support the crazy prices. The city will stagnate into a rich resort, with lower rents perhaps, but only service jobs to fill them.
Correct me if I'm wrong (and I hope I am)! The super high prices are like a tumour, blocking normal function, sucking the life out of the city.

I think you're right. I was reading an article the other day that showed a breakdown of BC job growth and it was almost all service industry and construction. I am out or I would try to find it.

Edit: Here it is
https://www.biv.com/article/2016/5/look-inside-bcs-april-job-creation/