Chinese Investors Driving Up Metro Housing Prices

[logicbomb]

Originally Posted by Alex Mackinnon

De Jong said it's a legally binding question on the registration, people answering falsely may be charged and fined.

No idea on the likelihood of that though.

There's so much illegal (and shaddy) activity in the industry. So the legally-binding mumbo jumbo means squat.

We outright knew this was the case and the number of foreign investors would be under 5%. The number we want to see is how many recent immigrants- those that hold PR and those who hold Canadian Citizenship via Quebec's investors program are pumping money into the real-estate market. Truth is, identifying foreign capital flows will be a nearly impossible feat. So we will be left in the dark.

All this is moot anyways. I keep telling people to buy something now or shut up since there is no looming bubble or crash. Immigrants will keep flocking to the Lower Mainland and affordable housing will become even more scarce. The only ways you correct the market is either by rejecting globalization/capitalism or closing the doors to immigration and both of those measures are asinine.

[trofirhen]

Originally Posted by logicbomb

There's so much illegal (and shaddy) activity in the industry. So the legally-binding mumbo jumbo means squat.

We outright knew this was the case and the number of foreign investors would be under 5%. The number we want to see is how many recent immigrants- those that hold PR and those who hold Canadian Citizenship via Quebec's investors program are pumping money into the real-estate market. Truth is, identifying foreign capital flows will be a nearly impossible feat. So we will be left in the dark.

All this is moot anyways. I keep telling people to buy something now or shut up since there is no looming bubble or crash. Immigrants will keep flocking to the Lower Mainland and affordable housing will become even more scarce. The only ways you correct the market is either by rejecting globalization/capitalism or closing the doors to immigration and both of those measures are asinine.

It's been asked a million times already, but with no coherent answer ... where will people without money / on modest incomes live, if this is the case? Anyone have a precise answer?

[csbvan]

https://www.biv.com/article/2016/7/chinese-buyers-bc-real-estate-june-just-3/

Only three per cent of the residential housing sales in a three-week period in June were to foreign investors, the bulk of whom were from China, according to new survey data released by the Ministry of Finance.

The data was released the same day an Asia Real Estate Association of America (AREAA) conference was taking place in Vancouver, where the findings were greeted with ridicule and laughter.

“I would like to know where the B.C. government is getting their statistics,” said Michael North of the Asia Pacific Network Foundation. He estimates the number of foreign buyers investing in Vancouver real estate at 10%, not 3%. Others at the conference put the numbers even higher than that.

The government's data comes from property tax transfers. In June, it began requiring proof of citizenship on all property tax transfer forms.

Data released July 7 is but a snapshot, and a small one at that. It covers all residential home sales between June 10 and 29.

“That is a very limited period,” said Finance Minister Mike de Jong. “There is a very healthy sample size, but chronologically it is not even a month. It is barely three weeks. So in terms of drawing absolute conclusions about what is taking place in the market, I offer that caution.”

There were 10,148 transactions between June 10 and 29 throughout B.C., half of which were in the Lower Mainland. Only 337 of those sales – 3.3% – involved foreign nationals. So, about 97% of home sales in that three-week period involved either Canadian citizens or permanent residents.

The bulk of the foreign buyers were from China: 258, or 2.5%. The second largest source of foreign investment was the U.S., which constituted just 0.23% of sales to foreign nationals.

But those foreign buyers, in general, paid a lot more for the homes they bought. Of those sales involving foreign nationals, 77% were concentrated in the Lower Mainland.

The average value of investments in the June transaction for Canadian citizens and permanent residents was $735,000. The average investment for foreign nationals was $1,157,000.

The government's data suggests foreign investment may not be as significant a factor in inflating Vancouver residential real estate prices as many people have assumed.

But real estate agents and developers attending the AREAA conference immediately questioned the government's numbers.

“I would say 50% of house buyers, maybe 60% [are foreigners],” said Eve Chuang of Macdonald Realty.

Chuang, and other agents at the AREAA conference, said it is not the nationality of the buyer but the source of the capital that is important. Money from China can be simply transferred to a relative with an address in Vancouver, who then acts as the buyer, the real estate agents explained.

“Name the company Maple Leaf Enterprise and hire Joan Smith to head it," North said. "Suddenly you’re a Canadian investor

[logicbomb]

Originally Posted by trofirhen

It's been asked a million times already, but with no coherent answer ... where will people without money / on modest incomes live, if this is the case? Anyone have a precise answer?

-Container housing or micro-units
-Rent rooms instead of units
-Rent in the hinterlands
-Be forced to rent/buy with friends or family
-Stay with their parents or guardian
-Tent cities/illegal squatting
-Sleep in cars or campers
-Homeless shelters/streets


Remember, it can and will get worse. Renters and prospective buyers in dire straits are the smallest minority right now...until you see it effect the majority...well...

[whatnext]

Originally Posted by Alex Mackinnon

De Jong said it's a legally binding question on the registration, people answering falsely may be charged and fined.

No idea on the likelihood of that though.

If one's made their fortune through graft and corruption one is unlikely to be fazed by lying on the BC Libs quaint little PPT form. The NDP is 100% right when they say it needs to be cross-referenced with income tax records.

Speaking of graft and corruption, did anyone miss Gregor's little squeeze, Wanting Qu, sob story about her poor mama, busted for corruption. Wanting doesn't find it strange her mother was able to fund her daughters education and meandering through Canada on what should have been an average salary of $1,400 a month!

http://www.theglobeandmail.com/news/worl...as-trial-in-china-looms/article30750606/

[s211]

Originally Posted by whatnext

If one's made their fortune through graft and corruption one is unlikely to be fazed by lying on the BC Libs quaint little PPT form. The NDP is 100% right when they say it needs to be cross-referenced with income tax records.

Pigs are flying; I agree with the NDP too, in a broad sense. Instead of just checking off a box on a form, formal documentation should be provided by the purchaser to substantiate, and not just for a broker to "see". It should form part of the selling documentation.

[WarrenC12]

Income tax is the missing link. We should be concerned with foreign capital, not somebody's name or country on their passport.

[connect2source]

As someone who's on the front-lines of this daily, the deals I'm seeing done in downtown condos seem more like about 40% offshore. I call BS on these figures and yes, the income tax method is the only way to check these transactions with any accuracy.

[trofirhen]

Originally Posted by logicbomb

-Container housing or micro-units
-Rent rooms instead of units
-Rent in the hinterlands
-Be forced to rent/buy with friends or family
-Stay with their parents or guardian
-Tent cities/illegal squatting
-Sleep in cars or campers
-Homeless shelters/streets


Remember, it can and will get worse. Renters and prospective buyers in dire straits are the smallest minority right now...until you see it effect the majority...well...

I appreciate the painful but blunt straightforwardness of your response.
Extrapolating from that, here's a link from Feb 2016, perhaps already posted, but with portent of severe consequences of the monster price bubble if things don't change.
http://business.financialpost.com/entrep...er-risks-becoming-an-economic-ghost-town

[logicbomb]

Originally Posted by trofirhen

I appreciate the painful but blunt straightforwardness of your response.
Extrapolating from that, here's a link from Feb 2016, perhaps already posted, but with portent of severe consequences of the monster price bubble if things don't change.
http://business.financialpost.com/entrep...er-risks-becoming-an-economic-ghost-town

Yeah, the reality is that there are no consequences. We lose a bunch of citizens as they flee to more affordable areas but we can always fill the gap by bringing in TFW's, further expand the work visa program, or bring in more international students.

I used to think we'd see mass demonstrations but let's not pretend that the majority of British Columbians will sympathize for others when they are gaining big-time equity on their homes. Even the children of the boomers (in their 20's and 30's) are in favour of the stauts-quo to gain off their inheritance.

Preventing Vancouver from becoming a ghost-town would involve collective organizing and mass demonstrations. You need a total shift in ethics and the majority to side on with the "poor." Frankly, everything I've seen the past 30's of my life would seem to indicate that this is will never happen...

[Alex Mackinnon]

Originally Posted by logicbomb

Even the children of the boomers (in their 20's and 30's) are in favour of the stauts-quo to gain off their inheritance.

You are so out of touch it's hilarious.

[Genauso]

Originally Posted by WarrenC12

Income tax is the missing link. We should be concerned with foreign capital, not somebody's name or country on their passport.

This cannot be understated.

[Geof]

Originally Posted by logicbomb

Even the children of the boomers (in their 20's and 30's) are in favour of the stauts-quo to gain off their inheritance.

Originally Posted by Alex Mackinnon

You are so out of touch it's hilarious.

It presumably depends on the millennials. At root, this is a class divide, not a generational divide.

[csbvan]

Originally Posted by Geof

It presumably depends on the millennials. At root, this is a class divide, not a generational divide.

It will be interesting to see how many protest with their feet. The ultimate rebuff of how this housing crisis is being handled will be younger, freshly educated, and highly skilled millennials leaving the city OR equally important, not coming to the city. It could be devastating to BC, but of course, for those who have left, what stake would they have in BC?

[Alex Mackinnon]

Originally Posted by Geof

It presumably depends on the millennials. At root, this is a class divide, not a generational divide.

Unless mommy and daddy bought them a condo, having a fat inheritance 30 years down the road isn't going to help you sleep at night.

Most millennials I know (UBC educated yuppies mainly) are getting pretty resentful. The options of moving to the boonies or renting forever are looking increasingly garbagy.

Just look at all the things happening with rentals in Vancouver. Who wants to get into a bidding war to rent a place? Yet, for some reason that is a thing. Most young people are the ones getting hosed in the recent volatility. We don't have as many assets or as stable jobs, so whenever volatility happens in the markets or the economy we're the first to get hosed.

[whatnext]

Originally Posted by Alex Mackinnon

Unless mommy and daddy bought them a condo, having a fat inheritance 30 years down the road isn't going to help you sleep at night.

Most millennials I know (UBC educated yuppies mainly) are getting pretty resentful. The options of moving to the boonies or renting forever are looking increasingly garbagy.

Just look at all the things happening with rentals in Vancouver. Who wants to get into a bidding war to rent a place? Yet, for some reason that is a thing. Most young people are the ones getting hosed in the recent volatility. We don't have as many assets or as stable jobs, so whenever volatility happens in the markets or the economy we're the first to get hosed.

Yes, even renting is becoming too expensive. I'm surprised the City hasn't at least cracked down on AirBnB and such, as it is something they have jurisdiction over. I guess Vision doesn't want to be seen as hostile to the touchy-feely sharing economy.

There was an article earlier this year that we had reached "Peak Millennial". In other words many of the craft beer swilling hipsters will be looking to settle down and start families soon. While a cramped overpriced apartments make for fun stories over a brew, it's not conducive to starting a family.

[Vin]

Originally Posted by whatnext

Yes, even renting is becoming too expensive. I'm surprised the City hasn't at least cracked down on AirBnB and such, as it is something they have jurisdiction over. I guess Vision doesn't want to be seen as hostile to the touchy-feely sharing economy.

There was an article earlier this year that we had reached "Peak Millennial". In other words many of the craft beer swilling hipsters will be looking to settle down and start families soon. While a cramped overpriced apartments make for fun stories over a brew, it's not conducive to starting a family.

Airbnb helps property owners subsidise their run-away mortgages.

People just have to start a family in smaller homes, or the City of Vancouver has to allow even more densification by upzoning SF areas.

[Cypherus]

There are allegedly astronaut families of Chinese origin where the son/daughter become a Canadian resident or landed resident for purposes of going to school, and use the income of the family to acquire housing in their name. As such, the property transfer tax form will not indicate the person is a non-resident, yet the source of funds is. Future sales of the property is subject to the principal residence gains exemption and the money repatriated back to China. This study ignores it, and the Liberal government knows this.

[cornholio]

The numbers are bs, ever Vancouver who is paying attention or involved in the industry knows this. The province knows this as well yet they present these numbers with a straight face. Also curious as to why they left out the 30th as that is a busy day.

Anyways its good that the people that matter, 30's educated professionals are starting to get angry. These are the people that drive all markets, drive the economy. The brain drain will only get worse as quality people who have marketable skills that make them mobile will increasingly pack up and leave.

But like I said the province is afraid to touch the mess they created, they will let the market run its self of a cliff and say its not their fault when we are left with the social and financial repercussions.

As for the feds they should be lowering immigration numbers instead of increasing them. Getting them down to 200k or less would give the cities some breathing room. But they wont do that. For that we will have to wait until the conservatists get back in power, and they will that is a promise (and no I never voted conservative though I may next election but this is just my prediction that I would nearly bet my life on). Canada federally will swing right in 3 years, and significantly more right then it was a year ago.

[trofirhen]

Perhaps, or perhaps not, this will help mitigate the problem of foreign investment blowing the real eastate bubble to unsustainable levels.
Then again, it may already be too late, but anything seems worth a try at this point:

https://ca.news.yahoo.com/petition-to-end-birth-tourism-to-be-tabled-in-203607644.html