Chinese Investors Driving Up Metro Housing Prices

[whatnext]

Boo hoo hoo, BC Realtors crying over foreign ownership tax. Cue the world's smallest violins:

http://www.theglobeandmail.com/real-...ticle31114012/

[csbvan]

Originally Posted by whatnext

Boo hoo hoo, BC Realtors crying over foreign ownership tax. Cue the world's smallest violins:

http://www.theglobeandmail.com/real-...ticle31114012/

So, I guess the tax will be somewhat effective after all

[Jebby]

Originally Posted by Vin

Nope, foreigners have been and are still purchasing properties that have ALREADY inflated over a few hundred percent, especially after 2008. Who's being ripped off for those rundown houses these days? Who's overbidding others for houses on the west side? Not you and me for sure. Foreigners are the ones still paying for the most expensive homes despite the hugely over-inflated price.

Care to share your sources for the claim that foreigners are the ones paying for the most expensive homes?

And you still don't seem to understand the difference between paying for something and receiving 100% of the purchase price (excluding realtor fees and title registration) in equity vs paying for something and only receiving 85% of the purchase price in equity.

Especially at inflated prices it makes a huge difference.

[twoNeurons]

Originally Posted by whatnext

You seem to be using outdated data. As was reported today, the numbers now seem to be much higher:

A longer, five-week set of data on foreign investment in Metro Vancouver real estate released by the province shows the problem may be larger than the first numbers suggested.

Data collected between June 10th and July 14th shows 6.6 per cent of residential transactions in BC involved foreign buyers. The percentage in Metro Vancouver was 9.7.

The province also has figures for many municipalities. The City of Vancouver was close to average at 10.9 per cent. Surrey’s was 8.4 per cent. Two suburbs adjacent to Vancouver seem the most affected by foreign investment. About 18 per cent of buyers in Richmond and Burnaby were considered foreign...
http://www.news1130.com/2016/07/26/r...r-foreign/yers in Richmond and Burnaby were considered foreign.

As to a PR of 20 years being lumped in as foreign, well all I can say is piss or get off the pot. If you've been here 20 years make the citizenship commitment.

Yes, I saw the 'updated' numbers.

Either way:

1. The sample size is simply too small over too short a period
2. I don't have the numerical breakdown to verify this.
3. No other factors were listed in the report as to WHY there were differences

Look at it this way. Was there a recent spike in money from China because of something concrete? Is this part of a longer trend? Does a 6 week span cover two ends-of-months?

you can't just **BOOM** increase your numbers without some justification.

[twoNeurons]

Originally Posted by Jebby

Care to share your sources for the claim that foreigners are the ones paying for the most expensive homes?

And you still don't seem to understand the difference between paying for something and receiving 100% of the purchase price (excluding realtor fees and title registration) in equity vs paying for something and only receiving 85% of the purchase price in equity.

Especially at inflated prices it makes a huge difference.

Yes, agreed. It makes a huge difference. It's unfortunate that public perception has come to this, but they had to do something to make it look like they were doing something.

Just because someone is wealthy, it doesn't mean that they're willing to throw away money.

I'm just happy that they're FINALLY recording data. It's something they SHOULD have done years ago. Without data, how can you make meaningful decisions?

And having that data behind a wall in the Real Estate Board is just as bad. If you encourage transparency, the market will regulate itself. Imagine if you could simply look up the price that a house sold for on each transaction on the last 20 years. That information is available, but you have to pay a small fee for every single property you want the history of. Some provinces make the data publicly accessible.

You can't get an idea of trends and actual price by just relying on reports generated by the REB... which is a MAJOR conflict of interest, btw.

[Sheba]

Vancouver Realtor probed for 'how-to' email on avoiding new property transfer tax

The Real Estate Council of B.C. is investigating a Vancouver Realtor who circulated a letter to clients that provides a how-to on avoiding the proposed 15 per cent foreign buyers' tax announced earlier this week by the B.C. government.

The email, from Century 21 Realtor Mike Stewart, describes how a foreign buyer of a pre-sale condo can skirt the new transfer tax, chiefly by selling pre-sale contracts to friends or family who are Canadian citizens or residents.

"For those of you who do not have that option, we may be able to sell the presale to a third party at a profit to you."

Real Estate Council spokesperson Marilee Peters said the council has asked the Realtor to stop.

Peters said the council caught wind of Stewart's email Wednesday morning and launched an investigation.

Stewart did not respond to an interview request, but he told CKNW Radio that he thought the tax unfairly affected people who purchased pre-sale units.

"There are people from all over the world from all walks of life who have bought properties that are pre-construction, pre-sale, and that are completing in a few years with the expectation of moving here or settling here, and they've been suddenly hit with a 15 per cent tax rather arbitrarily," Stewart said.

And he said he wasn't urging people to avoid paying taxes.

"It is primarily a specific solution for a very specific situation. I want to be very clear. I am not telling anybody about how to avoid a tax that is payable because that is illegal and that is not something that I do, and that I am allowed to do," he said in the interview.

"What this entails is for international buyers who have bought pre-construction, so they have not registered at land titles. According to my understanding, these are exempt from the taxation rules," he said.

The tax, which was announced on Monday by the B.C. government, adds an additional 15 per cent property transfer tax on sales of homes in Metro Vancouver by foreign buyers.

The tax takes effect next Tuesday, Aug. 2, and aims to address concerns about skyrocketing housing prices. Some experts have argued that foreign buyers have helped fuel the price increases.

Foreign buyers of pre-sold condos which close after Aug. 2, must pay the new tax.

On Wednesday, Premier Christy Clark weighed in, warning that auditors will take a close look at real estate deals closing near the Aug. 2 cutoff.

"Realtors should not be doing that," Clark told reporters at a news conference in Vancouver Wednesday.

"And they should know; they should be informing their clients, that every single one of these transactions could be audited.

"And we have an audit team ready to go to make sure that everyone of these transaction that was on the table, and that closes before Aug. 2 gets a very close, close look.

"And anyone trying to find loopholes is going to discover very quickly that those loopholes don't stand up."

That means that foreign buyers of pre-sold pre-sold condos which close after Aug. 2, must pay the new tax, she said.

[Jebby]

Stewart did not respond to an interview request, but he told CKNW Radio that he thought the tax unfairly affected people who purchased pre-sale units.

"There are people from all over the world from all walks of life who have bought properties that are pre-construction, pre-sale, and that are completing in a few years with the expectation of moving here or settling here, and they've been suddenly hit with a 15 per cent tax rather arbitrarily," Stewart said.

Totally agree with this guy.

[Alex Mackinnon]

Originally Posted by Jebby

Totally agree with this guy.

This is exactly why tiny violins were invented.

[cornholio]

Originally Posted by Jebby

Totally agree with this guy.

How so? When you apply to immigrate here they tell you clearly to no make any life changes with the assumption that pr will be granted. The guy is playing on people's ignorance. I went through the process my self and also went through the spousal sponsorship process. What he is saying does not make real life sense. Foreign buyers with a few exceptions for the most part are going to be speculators. It's not even people trying to move money out like people think. Its mostly just going to be run of the mill speculators and most of them are from China. For the few that are not speculators and not laundering money, well a life lesson. I would not have done what they did without the little paper they give you at the airport that shows you are a landed immigrant.

[Jebby]

Originally Posted by cornholio

How so? When you apply to immigrate here they tell you clearly to no make any life changes with the assumption that pr will be granted. The guy is playing on people's ignorance. I went through the process my self and also went through the spousal sponsorship process. What he is saying does not make real life sense. Foreign buyers with a few exceptions for the most part are going to be speculators. It's not even people trying to move money out like people think. Its mostly just going to be run of the mill speculators and most of them are from China. For the few that are not speculators and not laundering money, well a life lesson. I would not have done what they did without the little paper they give you at the airport that shows you are a landed immigrant.

It doesn't change that it's a very arbitrary decision and very unfair on those who have already purchased pre-sales. At the very least the tax should only apply to new contracts after a certain date. Pre-sales negotiated and signed before that date should be exempt from the tax.

[whatnext]

Originally Posted by Jebby

Totally agree with this guy.

Wouldn't expect anything less from someone posting from Mexico City, or was it Bogota? The fact is the global elites have had it too good for too long, at the detriment of local populations. Whether it be in the USA, the UK or here, popular sentiment is turning against them. I guess Occupy wasn't a dead-end movement after all.

[Tfreder]

Originally Posted by Jebby

It doesn't change that it's a very arbitrary decision and very unfair on those who have already purchased pre-sales. At the very least the tax should only apply to new contracts after a certain date. Pre-sales negotiated and signed before that date should be exempt from the tax.

Suprisingly I completely agree with you. It would be like buying a car, signing the contracts, and then after the fact finding out that you have to pay an additional sales tax. It just makes no sense. Contracts signed before the tax implementation should be exempt.

I also don't think the tax should even apply towards new condo developments, simply due to the fact that we have seemingly unlimited land to convert into condos, so we arent at risk of a lack of supply like we're experiencing with single family homes. Of course I'm completely biased on the matter, as I'd love to see the condo boom continue because it leads towards greater urbanization of our city.

[cornholio]

Originally Posted by Jebby

It doesn't change that it's a very arbitrary decision and very unfair on those who have already purchased pre-sales. At the very least the tax should only apply to new contracts after a certain date. Pre-sales negotiated and signed before that date should be exempt from the tax.

Why would a person who is here temporarily (not a permanent resident) buy a pre sale unless they are speculating? I understand the angle you are trying to take, I even have a idea why. But it doesn't make sense.

I for one will be happy if the thousands of pre sale units that were gobbled up by foreign speculators (not talking about foreign money which is another mater) but foreign speculators get put back on the market and flood it.

Also it is easy to see who invested on this forum...

[cornholio]

And while in this thread this is relevant to the discussion.

https://www.biv.com/article/2016/7/t...almost-400000/

Immigration, Refugees and Citizenship Canada issues the visas that are valid for up to 10 years. Its figures show that only 27,739 Chinese were approved in 2010, the year that Beijing’s approved destination status for tourism to Canada came into effect.

By 2012, when China overtook India in top spot, approvals hit almost 83,000. The 2013 figure of 113,110 nearly tripled in 2014 to 337,066. Last year, Chinese nationals were approved for 390,292 multiple-entry visas.

Additionally, in 2015, Canada received 594,897 applications for temporary resident visas from Chinese nationals. There was also a nearly 95% increase in study permits issued between 2010 and 2015 to Chinese nationals.

Despite the increase in visits to Canada by Chinese nationals, who prefer travelling to and settling in Vancouver and Toronto, the B.C. Liberal government played down their influence on the province’s real estate market in a July 7 release of residential real estate transaction data. Based on self-reporting, only 5% of purchasers between June 10-29 reported foreign citizenship, but the ratio was 11-to-1 in favour of Chinese purchasers over U.S. investors.

[bb1510]

http://www.cbc.ca/news/canada/britis...-tax-1.3698362

[csbvan]

Originally Posted by Tfreder

Suprisingly I completely agree with you. It would be like buying a car, signing the contracts, and then after the fact finding out that you have to pay an additional sales tax. It just makes no sense. Contracts signed before the tax implementation should be exempt.

I also don't think the tax should even apply towards new condo developments, simply due to the fact that we have seemingly unlimited land to convert into condos, so we arent at risk of a lack of supply like we're experiencing with single family homes. Of course I'm completely biased on the matter, as I'd love to see the condo boom continue because it leads towards greater urbanization of our city.

If foreign buyers begin backing out of pre-sale agreements, then those units will come back on the market. An influx of units coming back on the market could potentially push prices down. Is that not achieving exactly the effect that the government intends with this legislation? It might seem harsh, but it could fast track the success of the tax in the eyes of the government.

[Alex Mackinnon]

Originally Posted by Tfreder

Suprisingly I completely agree with you. It would be like buying a car, signing the contracts, and then after the fact finding out that you have to pay an additional sales tax. It just makes no sense. Contracts signed before the tax implementation should be exempt.

I also don't think the tax should even apply towards new condo developments, simply due to the fact that we have seemingly unlimited land to convert into condos, so we arent at risk of a lack of supply like we're experiencing with single family homes. Of course I'm completely biased on the matter, as I'd love to see the condo boom continue because it leads towards greater urbanization of our city.

Or in this case, it would be like putting down a deposit on a car purchase in 2 years and hoping that nothing changes in the mean time. When the government changed the PST to HST, they began including used cars in the scope of the tax which added 7% to the cost of any used car registered. If you put a deposit on it ahead of time, then you would have the exact same situation, although it would only add 7% to the cost of the car.

The government should stick to it's guns. It can't add in exception periods for everyone negatively affected by any piece of legislation or taxes. That would be way ridiculous waste of resources and slow down the rate of implementation of all policy.

[Jebby]

Originally Posted by cornholio

Why would a person who is here temporarily (not a permanent resident) buy a pre sale unless they are speculating?

So what if they are speculating? That's not the point. This tax has an absolutely arbitrary date and it affects deals already in place. I find that very unfair. As Tfreder said, it's like buying a car and after paying your down payment, you go to register the car and suddenly there's an additional 15% sales tax. It's very unfair. Pre-sales negotiated and signed before the tax implementation date should be exempt.

Originally Posted by cornholio

I understand the angle you are trying to take, I even have a idea why. But it doesn't make sense.

What do you think my angle is?

[Vin]

Originally Posted by whatnext

Wouldn't expect anything less from someone posting from Mexico City, or was it Bogota? The fact is the global elites have had it too good for too long, at the detriment of local populations. Whether it be in the USA, the UK or here, popular sentiment is turning against them. I guess Occupy wasn't a dead-end movement after all.

Why do you keep targeting the "global elites"? I have to state way too many times that our own government is the one who let this happen, letting wealthy people come in to invest, with speculation on property as, unfortunately, part of the process which is undesirable and with dire consequences. Leave the foreigners alone; you should have said popular sentiment is turning against our own mistakes, foolishness and possibly greed.

[Jebby]

Originally Posted by whatnext

Wouldn't expect anything less from someone posting from Mexico City, or was it Bogota?

What does where I live have anything to do with it?

Yes, I"m currently living in Mexico City and I previously lived in Bogota. So what?

Originally Posted by whatnext

I guess Occupy wasn't a dead-end movement after all.

Intellectually, it certainly was.

"Corporations control the government, so we need to give the government more power to control corporations"