Chinese Investors Driving Up Metro Housing Prices

[whatnext]

Originally Posted by Vin

$560,000 with a 10% downpayment on a townhouse in Langley is hardly "outbdding" anyone. Any local student can easily do that and not "challenged" by such a foreigner. Only difference is that a local student in his/her 20s is probably spending money elsewhere and wouldn't have the guts to invest on a property further away. Although a foreigner, this student is borrowing from people around her, and just like anyone else, would be paying mortgages with interest rates. The money she loans from her parents is never proven to be "corrupt money". She is also probably paying 3X the tuition fees that local students here are paying. On graduation, she may choose to live here and contribute to the economy here by working and paying taxes. What more do you expect for a potentially legit immigrant who can contribute to your retire funds?

If this person were an American or, say, Italian, no one would be batting an eye.

Again the backlash here has a racist undertone.

Yeah right. So many students I know just have $56k lying around from working at the mall. Save the sob story for SUCCESS.

She "may choose to work here" or she may choose to just flip her condo and drive up prices further. There's the expectation of profit with this kind of purchase otherwise she would just rent.

[retro_orange]

Ontario will need to implement foreign buyer tax on housing, CIBC says


Province will have 'little choice' but to tax foreign buyers, Benjamin Tal says

A prominent economist says that Ontario will have little choice but to implement a tax on foreign house buyers, similar to the 15 per cent surcharge recently slapped on home purchases in Vancouver.
In a recent note to clients, Benjamin Tal of CIBC says the biggest problem facing policymakers with regard to hot housing markets in Toronto and Vancouver is a limit on the supply of new homes.
In both cities, there's a lack of undeveloped land to build new real estate in the downtown core.
"The main reason behind higher prices in the [Greater Toronto Area] is a policy-driven lack of land supply," Tal said. "And with no change on that front, policymakers have to use demand tools to deal with what is essentially a supply problem."
Influence of foreign buyers

One such tool is already underway in Vancouver.
Vancouver's housing market had been showing signs of a slowdown before the city's move in July to implement a 15 per cent tax on housing purchases by foreigners "pushed it over the edge," as Tal puts it. According to the Real Estate Board of Greater Vancouver, house purchases declined by 26 per cent in August compared with the same month a year earlier.
Another subsequent move, to tax vacant homes, is likely to pour more cold water on a housing market that was red-hot for more than a year.
A steep decline in prices may be jarring to recent buyers, but it's exactly what B.C. policymakers are hoping to accomplish, at least in the short term.

High housing prices have become a contentious issue in Vancouver, leading to protests. (Jim Jeong/Reuters)

"Ontario will have little choice but to do the same," Tal said.
That's because the Vancouver tax has had the unintended consequence of inflating bubbles elsewhere.
There's anecdotal evidence that Vancouver's tax has already shifted foreign money to Toronto housing, and media reports suggest some of the money that was pouring into Vancouver has been redirected to Seattle.
High-end real estate seller Sotheby's says it expects a lot of demand in Vancouver's luxury market to move to Toronto.
Other options

Tal doesn't speculate how much of a tax could be under consideration for Toronto, nor does he have any insight as to when and how it might be implemented.
A foreign buyer tax is not the only possible response to the problem of high house prices. Among other possibilities, Tal cites:

• Compelling banks to tighten their lending practices by making them pay for their own mortgage insurance.
• Raising the down payment minimum to 10 per cent, even for homes under $1 million,
• Closer monitoring of lending to subprime buyers.
• Offering tax incentives to developers to make more purpose-built rental buildings, including more flexible rent control rules, as ways of cooling Toronto's housing market.

Tal says Toronto's housing market has been inflated by cheap lending to people who would have no business getting a mortgage if rates returned to more typical levels.

But higher interest rates could mean borrowers would just have to spend more to pay down their debt, which would give them less to spend in the real economy, possibly sparking a recession, Tal warns.
It may be too late to stop cash-tight borrowers who have already bought, but a tax on foreign buyers would help cool the market in the right way.
"Any upcoming changes to regulations," Tal says, "should make it a bit more difficult to borrow — simply to save Canadians, blinded by the current affordability mirage, from themselves."

http://www.cbc.ca/news/business/benj...cibc-1.3769153

[whatnext]

BREAKING: BC gov't says on July 29th, before 15% foreign buyers tax was implemented, foreign nationals bought $850 million worth of property
http://www.news1130.com/2016/09/22/f...-targeted-tax/

Now that's breathtaking (in a bad way).

But foreign ownership isn't a problem, go back through this thread and listen to all the apologists who told you so.

[Jebby]

Originally Posted by whatnext

But foreign ownership isn't a problem, go back through this thread and listen to all the apologists who told you so.

It's not. But go on and enjoy your xenophobia and envy.

[whatnext]

Originally Posted by Jebby

It's not. But go on and enjoy your xenophobia and envy.

LOL. Keep trying. Maybe eventually you'll convince yourself.

[Jebby]

Originally Posted by whatnext

LOL. Keep trying. Maybe eventually you'll convince yourself.

Blaming it all on foreigners is absurd and can only be either ignorance or xenophobia and jealousy.

The problem isn't demand, it's a lack of supply caused by restrictive zoning (density and height limits, social component demands, etc) and political opposition to densification.

If there is so much demand for affordable housing, developers would build it if it were profitable. It's not profitable because of restrictive zoning which drives up the per unit cost of any development. To say developers wouldn't build affordable housing units if the economics made sense is absurd. That's like saying automakers wouldn't produce affordable cars because they could exclusively sell luxury cars with higher margins.

[casper]

Originally Posted by Jebby

Blaming it all on foreigners is absurd and can only be either ignorance or xenophobia and jealousy.

The problem isn't demand, it's a lack of supply caused by restrictive zoning (density and height limits, social component demands, etc) and political opposition to densification.

If there is so much demand for affordable housing, developers would build it if it were profitable. It's not profitable because of restrictive zoning which drives up the per unit cost of any development. To say developers wouldn't build affordable housing units if the economics made sense is absurd. That's like saying automakers wouldn't produce affordable cars because they could exclusively sell luxury cars with higher margins.

Exactly. Lets remove the zoning restrictions and towers go up.

[Vin]

Originally Posted by whatnext

BREAKING: BC gov't says on July 29th, before 15% foreign buyers tax was implemented, foreign nationals bought $850 million worth of property
http://www.news1130.com/2016/09/22/f...-targeted-tax/

Now that's breathtaking (in a bad way).

But foreign ownership isn't a problem, go back through this thread and listen to all the apologists who told you so.

Have you seen prices come down yet? I would reckon that's the most pressing issue. If it continues to stay up, then we only succeed in driving away foreign investors, but this city continues to be unaffordable. This 15% surcharge tax can potentially become a joke, a form of protectionism without any yield of positive results. Without densification, Vancouver is still going to be almost impossible for young people to buy into.

[Vin]

Originally Posted by casper

Exactly. Lets remove the zoning restrictions and towers go up.

Jebby likes densification but has no love for towers.

[Vin]

Originally Posted by whatnext

Yeah right. So many students I know just have $56k lying around from working at the mall. Save the sob story for SUCCESS.

She "may choose to work here" or she may choose to just flip her condo and drive up prices further. There's the expectation of profit with this kind of purchase otherwise she would just rent.

Again that is a very xenophobic comment. Do you think locals don't flip properties? Instead of calling on the government to implement rules to control property speculations by all, you consistently target Chinese from Mainland China, and imagine the worst of them. That makes you xenophobic.

[Jebby]

Originally Posted by Vin

Jebby likes densification but has no love for towers.

I love towers. I wish Vancouver had a lot more of them and much taller as well. I just don't think every area needs towers nor that towers are appropriate for every neighborhood.

[Vin]

Originally Posted by gkz

An interesting, evidence based video exploring zoning, taxation, and housing affordability in Vancouver. Worth the watch!

• Video Link

https://www.youtube.com/watch?v=97uKzVDg-hw

This is worth listetning to.

[retro_orange]

Originally Posted by Vin

This is worth listetning to.

Indeed. Why doesn't this guy form the next city government?

I love how he calls single family homes anti social zoning.

[s211]

Originally Posted by retro_orange

I love how he calls single family homes anti social zoning.

HAHAHAHAHAHAHAHAHAHAHA!!!!!!

What a ridiculous thing to say. Anybody who's lived in both single family neighbourhoods and rental/condo towers will tell you that single family neighbourhoods are far far more neighbourly. I've lost times how many times I've been told by tower dwellers that they don't know anybody on their floor, or the rest of the building for that matter.

[retro_orange]

Originally Posted by s211

HAHAHAHAHAHAHAHAHAHAHA!!!!!!

What a ridiculous thing to say. Anybody who's lived in both single family neighbourhoods and rental/condo towers will tell you that single family neighbourhoods are far far more neighbourly. I've lost times how many times I've been told by tower dwellers that they don't know anybody on their floor, or the rest of the building for that matter.

I guess i gotta do this: age 0-19 in various new SFH, age 19-22 townhouse, age 22-25 apartment tower, age 25-27 top floor suite of old house, 27-now low rise apartment. I got all bases covered. Plus i have actually talked to a number of people on my floor in the 3 years i have been here. Looking up from your cell phone and not being afraid of your neighbors is a good place to start.

I take it you didn't watch the whole thing or any of it. His point was that because of current 21st century market conditions in Vancouver, having the vast majority of the city zoned for an ever decreasingly small amount of people is assbackwards. Townhomes are a better solution for current SFH neighborhoods to have a critical mass for a successful thriving city. Nobody said condo towers.

[s211]

Originally Posted by retro_orange

I guess i gotta do this: age 0-19 in various new SFH, age 19-22 townhouse, age 22-25 apartment tower, age 25-27 top floor suite of old house, 27-now low rise apartment. I got all bases covered. Plus i have actually talked to a number of people on my floor in the 3 years i have been here. Looking up from your cell phone and not being afraid of your neighbors is a good place to start.

I take it you didn't watch the whole thing or any of it. His point was that because of current 21st century market conditions in Vancouver, having the vast majority of the city zoned for an ever decreasingly small amount of people is assbackwards. Townhomes are a better solution for current SFH neighborhoods to have a critical mass for a successful thriving city. Nobody said condo towers.

Swing and a miss, but thanks for playing.

My point is that I tire of activists who use charged labels to describe things, and then shriek when they see other people labelling things.

[GMasterAres]

Socializing is over-rated. Most people in this world are annoying at best.

[Vin]

Originally Posted by s211

HAHAHAHAHAHAHAHAHAHAHA!!!!!!

What a ridiculous thing to say. Anybody who's lived in both single family neighbourhoods and rental/condo towers will tell you that single family neighbourhoods are far far more neighbourly. I've lost times how many times I've been told by tower dwellers that they don't know anybody on their floor, or the rest of the building for that matter.

Only if those SFHs actually have people in them, who also happen to speak your language.

[Vin]

Originally Posted by whatnext

Yeah right. So many students I know just have $56k lying around from working at the mall. Save the sob story for SUCCESS.

She "may choose to work here" or she may choose to just flip her condo and drive up prices further. There's the expectation of profit with this kind of purchase otherwise she would just rent.

Originally Posted by WarrenC12

WTF are you talking about? Where does a young person in school or just out come up with $56k cash and a $2300+/month mortgage payment, not including any taxes or strata fees.

Of course there are! Don't you know so many parents of Vancouver's young people make it rich here (Or elsewhere) that they have a tendency to help out their kids on home deposits and mortgages? This is the reality of modern families. For those kids totally cut off from the generation that could make it rich easy, then yeah too bad for them: they are already in a losing position.

Again, $560,000 to get a townhome isn't really a competition that other working adults have to compete for.

[Vin]

Originally Posted by retro_orange

Indeed. Why doesn't this guy form the next city government?

I love how he calls single family homes anti social zoning.

Yeah I wish educated, well-informed and worldly people like him would actually be the decision makers for this City, not just a bunch of hicks who fail even when they try to ape others.