Chinese Investors Driving Up Metro Housing Prices

[retro_orange]

Originally Posted by Jebby

To get this on topic, rich Chinese investors who are shelling out millions to buy homes people claim they don't even live in are paying tens of thousands of dollars annually each to support the public school system while not using it.

Why do you make arguments that continuously go in circles. We have to continue to regurgitate the same information and make the same debate every few days. It's getting annoying.

[Jebby]

Originally Posted by retro_orange

Why do you make arguments that continuously go in circles. We have to continue to regurgitate the same information and make the same debate every few days. It's getting annoying.

No one is forcing you to engage or reply.

[Caliplanner1]

[QUOTE=J
------------------

To get this on topic, rich Chinese investors who are shelling out millions to buy homes people claim they don't even live in are paying tens of thousands of dollars annually each to support the public school system while not using it.[/QUOTE]

The problem thus is government allocation of scarce fiscal resources away from poorer/more needy neighborhood schools and towards wealthy ones in less need of such government education subsidy (considering that the wealthy already have gained many direct and indirect assistance/benefits from the government directed political economy engineered by/of/for the rich--(e.g. when a corporation gets tax breaks/government contracts or employs thousands of workers educated cheaply by public schools or dispenses welfare payments -like food stamps- which is re-spent in the stores of the rich to gird profits etc.).

Ultimately, if wealthy foreign housing speculators/investors do not send their children to (especially public) school here, the school age population in such increasingly wealthy neighborhoods (e.g. Richmond or downtown Vancouver etc.) will decline forcing school closures (as a function of declining school enrollment). This reality is further compounded by the out-migration of the working class who tend to have families but cannot afford to reside close to the city/work opportunities etc. given the astronomical cost of housing.

Such school closures ultimately represents a costly waste of expensive educational infrastructure/scarce educational resources as the sustaining, rejuvenating social fabric that accompany young families/and a younger urban demographic population, is displaced from metro Vancouver over time.

[Migrant_Coconut]

Originally Posted by Jebby

To get this on topic, rich Chinese investors who are shelling out millions to buy homes people claim they don't even live in are paying tens of thousands of dollars annually each to support the public school system while not using it.

They don't live in them - they stay back home, buy low, and watch the prices go up. Occasionally they park an inconvenient trust fund brat here so that they party overseas (rather than back home, where it's embarrassing to the family), but many PRC-bought McMansions are often used as nothing but offshore, tax-free stocks.

[ssiguy]

Well it certainly looks like Vancouver is heading for a real housing crash and it wlll be one for the record books.

Housing prices on any regional areas reflects pressure on the high end......the rise in high end homes causing everything else to rise as middle income earners are forced into cheaper homes leading to higher for them {ie Westside house skyrocketed and there was a lag until Eastside houses did the same} and the lower income people are either completely locked out or are forced further from the city to try to get something within their budget {ie, Fraser Valley real estate only started to soar after all of inner metro became out of reach}.

Well it looks like the expensive markets are completely collapsing and it will take longer but it will reflect lower prices near them and then spread out. Who's going to buy a $1 million crack shack on the Eastside when they can all of a sudden buy a house on the Westside for the same amount? As that spreads out to the suburbs more people will turn around and say, why would I buy a townhouse or condo in the burbs when now I can afford a house and hence it spreads to the condo/townhouse market a little later.
Foreign buyers are the reason the high end home prices soared and then spread to other areas and the reverse is always also the case.

The Chinese got {and kept} the high end frenzy going and with skyrocketing home prices it led to the mania of the general population buyers to "get into the market now or I'll never get in." It's simple Economics 101........fear runs the market. Of course when fear runs the market it also works in the opposite direction.........when sales collapse as people all of sudden realize by waiting 6 or 8 months prices will fall and they will save themselves hundreds of thousands of dollars or maybe be able to get a house, home owners do the opposite of what the buyers where doing before the crash........."sell now or I'll never sell."

Of course prices can drop much faster than they can rise because rising home prices requires one to have more money and plunging home prices only require one to have less.

[logan5]

You have a special talent for saying dumb things

[Caliplanner1]

Originally Posted by ssiguy

Well it certainly looks like Vancouver is heading for a real housing crash and it wlll be one for the record books.

Of course prices can drop much faster than they can rise because rising home prices requires one to have more money and plunging home prices only require one to have less.

The real conundrum is when home equity levels plunge below the market value of given property/houses etc.,....when such occurs the home, being "under water".....plunges the property owner into debilitating debt.

[retro_orange]

Originally Posted by logan5

You have a special talent for saying dumb things

Who?

[Pinion]

Originally Posted by Caliplanner1

The real conundrum is when home equity levels plunge below the market value of given property/houses etc.,....when such occurs the home, being "under water".....plunges the property owner into debilitating debt.

Only if they sell when they shouldn't be selling.

[Caliplanner1]

Originally Posted by Pinion

Only if they sell when they shouldn't be selling.

.....often many such folks with property "under water" are already deeply in debt given that they used their (previous) home equity like an ATM....and are thus forced to vacate their respective debt ridden homes if they can't meet their (many other) external debt obligations.

[WarrenC12]

Originally Posted by ssiguy

Of course prices can drop much faster than they can rise because rising home prices requires one to have more money and plunging home prices only require one to have less.

Truly this is a statement for the ages.

[Alex Mackinnon]

Originally Posted by Caliplanner1

.....often many such folks with property "under water" are already deeply in debt given that they used their (previous) home equity like an ATM....and are thus forced to vacate their respective debt ridden homes if they can't meet their (many other) external debt obligations.

Especially if their "investments" are additional properties.

[logicbomb]

Originally Posted by ssiguy

Well it looks like the expensive markets are completely collapsing and it will take longer but it will reflect lower prices near them and then spread out. Who's going to buy a $1 million crack shack on the Eastside when they can all of a sudden buy a house on the Westside for the same amount? As that spreads out to the suburbs more people will turn around and say, why would I buy a townhouse or condo in the burbs when now I can afford a house and hence it spreads to the condo/townhouse market a little later.
Foreign buyers are the reason the high end home prices soared and then spread to other areas and the reverse is always also the case.

It won't be a crash, but a slight correction.

For as long as interest rates are low, you will get people lining up to buy. There's a lot of people that are a) sold their properties over asking and are waiting to buy (renting in the meantime), or b) have sat on the sideline over the past 5+ years awaiting a correction. There's a swath of people ready to buy, they are out there and will be adding further demand.

[ssiguy]

Originally Posted by logan5

You have a special talent for saying dumb things

Thanks for your informative response. When you have something INTELLIGENT to say please feel free to get back to us.

[retro_orange]

Originally Posted by ssiguy

Thanks for your informative response. When you have something INTELLIGENT to say please feel free to get back to us.

I think you made some good points.

[ssiguy]

Originally Posted by Caliplanner1

.....often many such folks with property "under water" are already deeply in debt given that they used their (previous) home equity like an ATM....and are thus forced to vacate their respective debt ridden homes if they can't meet their (many other) external debt obligations.

Very true and is especially true in BC. BC is the only province to have a negative savings rate and has had such every year this millennium.......in short they have no rainy day fund.

Vancouverites especially are up to their ass in debt and have the highest non-mortgage debt in the country to boot. If someone in, for example, Montreal has a $300k mortgage with 2 breadwinners then their mortgages are easy to handle and if one loses their job it will cause strain but with extra EI and some household cutbacks they may still manage to muddle thru.

On the other hand if someone in Vancouver has a $1 million mortgage and one loses their job they are far more likely to have to default as the mortgage and other non-mortgage debt is simply too high to maintain. During a time of high rising prices they would have to sell their home and take what ever profit from it they can and start over. In a plunging market however they may not be able to sell it and if they do it will be for a vastly lower price than they were expecting. If they are a new buyer they could find themselves under water even if they sell and that means bankruptcy.

[Vin]

You guys have to realize that if people can't sell their homes if the demand is lower, many will just hold on to them. Don't think prices will come down. Renting an investment property still makes owning a it a pretty good deal. It's not like we're facing a financial crisis and people can't afford their mortgages any more in this town.

[retro_orange]

Originally Posted by Vin

You guys have to realize that if people can't sell their homes if the demand is lower, many will just hold on to them. Don't think prices will come down. Renting an investment property still makes owning a it a pretty good deal. It's not like we're facing a financial crisis and people can't afford their mortgages any more in this town.

Assuming those who came within the past 10 years with the main intent of investing don't decide they want to move elsewhere that's less hostile to their intents (No new taxes or the next easiest place to launder money)

[logan5]

Originally Posted by ssiguy

Thanks for your informative response. When you have something INTELLIGENT to say please feel free to get back to us.

OK. I'll elevate to your level... How much are crack houses going for in White Rock?

[cornholio]

Originally Posted by logan5

OK. I'll elevate to your level... How much are crack houses going for in White Rock?

There are 177 single family homes for sale in White Rock as of this moment. The correct answer to your question is nothing because hardly anything is moving. The month before the tax came in there were 115 new detached listings and only 23 sales. Since then the sales have completely died and listings continue to rapidly rise.

R2093363 cut from 1.850 to 1.650 days on market 35
R2092910 cut from 2.888 to 2.780 days on market 34
R2076747 cut from 1.238 to 1.198 days on market 83
R2081264 cut from 1.148 to 1.098 days on market 63
R2063340 cut from 1.500 to 1.200 days on market 122
R2063341 cut from 1.650 to 1.200 days on market 122
R2063335 cut from 1.750 to 1.275 days on market 122
R2063338 cut from 1.650 to 1.200 days on market 122
R2086747 cut from 1.698 to 1.595 days on market 54
R2067147 cut from 1.249 to 1.200 days on market 107
R2096238 cut from 1.100 to 1.024 days on market 26

Just bothering with those that have not been taken off market or relisted with new MLS numbers. Detached.

You are way behind on what is happening in the market. Maybe you prefer to wait for the Vancouver Sun to tell you what happened a month ago a month from now. I am sure they will tell you what is happening after it has happened. Rule of life.

Want a really good laugh? Take a look at Richmond. As I suspected for a long time the place was speculative central and it is now showing.

But don't worry as always there will be a rebound that comes. The question is if it will be a typical bull trap that simply runs out of steam. I gave up on trying to gues the Vancouver market, all I know is what is happening right now and what the fundamentals are.