Chinese Investors Driving Up Metro Housing Prices

[whatnext]

There, its out there in black and white, in a reputable source like the Vancouver Sun. I'm not sure why some feel the need to deny this, or paint even mentioning it as something a tolerant society shouldn't discuss.

When real estate entrepreneur Cam Good hosted a group of predominantly mainland Chinese investors this Wednesday at a White Rock condo showing, he was tapping into a market that's surging across much of Metro Vancouver.

Good, president of The Key, a Vancouver-based sales and marketing firm that's focusing on a new wave of Chinese buyers, figures he's sold more than 500 homes to mainland Chinese investors and immigrants in January and February in Vancouver and Toronto....But it's not just condos that are attracting Chinese buyers, with single-family homes and large lots topping the list....

Across the Lower Mainland, especially Richmond and Vancouver's west side, mainland Chinese buyers and immigrants are becoming a major part of the market, in some cases competing with each other through multiple offers.

But the phenomenon is starting to spread to other areas including Burnaby, West Vancouver, White Rock and beyond....

...Richmond MacDonald Realty realtor David Lindsay said: "January and February has been almost exclusively mainland Chinese buyers of big lots, with a house of little value on it. And we're getting multiple offers."

He said, for example, that a typical lot in the Seafair area, which sold for $800,000 in October, is now selling in the $1.2-million range. "I sold one last Sunday and we had four offers. The winning bid was $1.03 million. It was on the market for $968,000." Lindsay believes there's speculation is going on, because some buyers are getting an accepted contract with a clause that allows them to assign the contract to a third party before the sale is completed. "One buyer didn't even set foot on the property..."

Read more: http://www.vancouversun.com/business/Chi...+market/4352746/story.html#ixzz1FBM6E7Q7

[Nutterbug]

Let them hold onto them while the market crashes and falls.

It will happen. The homes can only remain empty and unused for so long, until the owners start lowering their demands to unload them. Besides, many homes are going underwater in the US, and they're usually just ahead of us on these things.

[Yume-sama]

The US is quite a bit far ahead with their thousands of bank failures to our 0

I don't know why we seemingly hold on to some hope that our country will be destroyed, too.

[dreambrother808]

So Chinese immigrants are buying homes for themselves! The nerve...

[whatnext]

There's been an interesting series of articles in the Richmond Review detailing the problem, complete with allegation of realtors ripping off long time homeowners:

...Boucher’s lawyer believes that the realtor involved in the deal didn’t perform his legal duty by disclosing the recent selling prices of comparable homes in the neighbourhood near Boucher’s home. Wayne Ryan is appealing for anybody else who may have fallen victim to contact him at 604-271-8078.
Boucher admits that he was enticed by the prospect of saving tens of thousands of dollars in commission by signing a deal without having a realtor represent his interests.
“He kept repeating that I would save the commission.”
Ryan has formally requested that Boucher’s sales agreement be rescinded. If that’s unsuccessful, Ryan said he’ll explore getting a court injunction against Wu, and perhaps even launch a class action lawsuit.
“Every realtor owes his client a duty of care,” Ryan said...
http://www.bclocalnews.com/richmond_southdelta/richmondreview/news/116772744.html

And I love this quote:

Foreign investors profiting from the current real estate frenzy in Richmond need to send a cut of their windfall to Ottawa.

That’s according to the Canada Revenue Agency, which pointed out that the end purchaser of these flipped properties could be held liable if the capital gains taxes aren’t paid...

..Alban Wang, a realtor for Amex Sunrich Realty, said it’s not his responsibility to tell the final buyer that he or she could be on the hook for paying the capital gains tax should the middle-man default.

“It’s nothing with me,” Wang said. “I cannot say something to you. I’m only a realtor. I cannot tell you much. (bold mine)
http://www.bclocalnews.com/richmond_southdelta/richmondreview/community/116513228.html

[logan5]

Originally Posted by dreambrother808

So Chinese immigrants are buying homes for themselves! The nerve...

It's like metro Vancouver condos have turned into a stock or something. Most people in Vancouver cannot afford a new condo in metro, yet they're selling like hotcakes.

I'm not sure what effect tougher regulations would have on the housing market, but somethings gotta be done.
The majority of Vancouver citizens are locked out of the housing market by people who don't even live here.

[trofirhen]

Originally Posted by logan5

It's like metro Vancouver condos have turned into a stock or something. Most people in Vancouver cannot afford a new condo in metro, yet they're selling like hotcakes.

I'm not sure what effect tougher regulations would have on the housing market, but somethings gotta be done.
The majority of Vancouver citizens are locked out of the housing market by people who don't even live here.

As I said in my post (#20), the Australian government has come up with laws that specifically address that issue by requiring investors to be residents-in-fact of the properties they buy. This helps stop real estate from being a purely speculative commodity.

[WBC]

Why is anybody with lots of cash "investing" money in real estate in the city that has had an unprecedented run up in real estate prices is beyond me. That is the equivalent to investing into already expensive stock that had just had 300% price increase.

[Login650]

Originally Posted by trofirhen

As I said in my post (#20), the Australian government has come up with laws that specifically address that issue by requiring investors to be residents-in-fact of the properties they buy. This helps stop real estate from being a purely speculative commodity.

The province of New Brunswick has a similar regulation: non owner-occupied units are charged a provincial property tax on top of the normal municipal property tax. It effectively doubles the property tax.

So BC could do something similar, no need to wait for the Federal government to decide to regulate foreign investment.

[Nutterbug]

Originally Posted by Yume-sama

The US is quite a bit far ahead with their thousands of bank failures to our 0

I don't know why we seemingly hold on to some hope that our country will be destroyed, too.

Who says I want our country destroyed?

I just want the housing prices to drop to more reasonable levels. If greedy investors lose money in the process, cry me a river.

[ckkelley]

Originally Posted by Nutterbug

Who says I want our country destroyed?

I just want the housing prices to drop to more reasonable levels. If greedy investors lose money in the process, cry me a river.

How long have you been waiting? What's your buy-in price?

Just curious.

[Nutterbug]

Originally Posted by ckkelley

How long have you been waiting? What's your buy-in price?

Just curious.

Still renting and haven't saved anything yet. These things still have yet to be decided on.

[Yume-sama]

Originally Posted by Nutterbug

Still renting and haven't saved anything yet. These things still have yet to be decided on.

Well, that is slightly problematic. If you want to know what *would* happen if Canada were to see a similar economic collapse, I must say it would be exactly the opposite of what you'd hoped. As has happened every time there is a collapse of a corporation, economy, etc., more foreigners would come in and buy everything up for pennies on the dollar. This is essentially what has happened in many countries (Iceland, Ireland, Spain, Greece, Egypt). Policies from large international groups (say the IMF) create a situation in which there is bound to be a collapse (say, rampant inflation on the price of gas, food, etc. which we *are* seeing), which screws over the local residents, and then foreign powers come in and snap everything up... which screws over the local residents. Foreign banks relished the opportunity to come in to America and buy everything once it was essentially worthless.

So what has happened? Even though house prices are at their lowest, homelessness, etc. has skyrocketed to their highest levels. And home ownership is at its *lowest* levels.

How can that be when everything is so much more affordable?

Basically, the point is you can't damage one sector of the economy without equally damaging every other part of it.

[Yume-sama]

Prices won't fall to the levels America has seen prices fall to without a serious country wide economic collapse.

It's not just Vancouver that is high (though it has always been the *highest*). All of Canada has remained steadily high in comparison.

So yes, in your desire to "punish" greedy homeowners, the only way that could really come about is a nationwide economic crisis. And yes, I said homeowners, not investors. The amount of investors pales in comparison to the amount of actual homeowners, who would be up the river with a drastic price decrease. You can't just somehow selectively punish one without ravaging the other who can least afford it.

The loss of all home equity was a primary factor in the further fall of the American economy, after the initial collapse.

Oh yeah, and then you'd see the collapse of our big banks, to which everyone would lose everything over the insured amount, and the collapse of the Canadian Dollar

[Nutterbug]

Originally Posted by Yume-sama

Prices won't fall to the levels America has seen prices fall to without a serious country wide economic collapse.

It's not just Vancouver that is high (though it has always been the *highest*). All of Canada has remained steadily high in comparison.

So yes, in your desire to "punish" greedy homeowners, the only way that could really come about is a nationwide economic crisis. And yes, I said homeowners, not investors. The amount of investors pales in comparison to the amount of actual homeowners, who would be up the river with a drastic price decrease. You can't just somehow selectively punish one without ravaging the other who can least afford it.

Even if their prices fall, I don't expect them to fall anywhere near the level that would make them a bad investment and incur a loss over the last 10 or 20 years. I still expect their resale value to be well above what they were back then, even when adjusted for inflation.

[cc85]

the crash is coming.

[Yume-sama]

Yes, the sky has been falling for the better part of the last quarter century.

I just don't understand why people seem to really want it to happen the way they say.

Obviously they've never studied economics. You yourself would be even worse off

[sono65]

Typically, it's people who have never owned a home, who are the big nay-sayers. If the prices are too high, then too bad. Buy are property in a more affordable area. Buy a place in Coquitlam. You think people in NYC complain the housing prices in Manhattan are too expensive? Vancouver cannot stay cheap and affordable forever.

[dubsH]

Originally Posted by sono65

Typically, it's people who have never owned a home, who are the big nay-sayers.

That's very true. They want a crash so they can buy-in, and then they hope that from then on prices will keep on going up. Classic "I want everybody around me to fail but me". I don't own a home (yet), but I don't see where all this fear-mongering is coming from. Honestly though, if you want to buy a house, move into an obscure village away from the cities. The cities are always going to be increasingly expensive if they're desirable.

Inicidentally (and off-topic, since this is a pretty off-topic thread, which has been rehashed time and time again by the usual suspects), I remember reading some years ago on this forum that someone wished that inheritances were not allowed and that parents could not pass on their wealth to their children, and that all their assets would get donated to charity (presumably to prevent the trust fund kids from showing off). Imagine if you spent all your life savings into a dwelling that you could not even keep or pass on! I would just rent...heh... it was an absurd suggestion, but I still remember it quite clearly.

If you haven't saved yet, and you're looking to buy, you'll be at the same place you are today and when you're at the "impending apocalypse" of the housing market. Or worse, since the local economy will tank with it.

[Yume-sama]

Originally Posted by dubsH

That's very true. They want a crash so they can buy-in, and then they hope that from then on prices will keep on going up. Classic "I want everybody around me to fail but me". I don't own a home (yet), but I don't see where all this fear-mongering is coming from. Honestly though, if you want to buy a house, move into an obscure village away from the cities. The cities are always going to be increasingly expensive if they're desirable.

Inicidentally (and off-topic, since this is a pretty off-topic thread, which has been rehashed time and time again by the usual suspects), I remember reading some years ago on this forum that someone wished that inheritances were not allowed and that parents could not pass on their wealth to their children, and that all their assets would get donated to charity (presumably to prevent the trust fund kids from showing off). Imagine if you spent all your life savings into a dwelling that you could not even keep or pass on! I would just rent...heh... it was an absurd suggestion, but I still remember it quite clearly.

If you haven't saved yet, and you're looking to buy, you'll be at the same place you are today and when you're at the "impending apocalypse" of the housing market. Or worse, since the local economy will tank with it.

lol I actually remember the talk about the inheritances should be outlawed

It is natural, and of the human nature to be "jealous". It is always easy to be for social justice, etc. as a young person until it's something of yours that is being taken to make it equal. Then it is really not quite so much fun. However, I think it is important to NOT be jealous, and instill in the minds of young people not a sense of entitlement (which you definitely learn when you go to universities ), but a sense that we live in a place where if you try hard enough, and make smart choices, you can do anything, and have anything you want.

Anyways, I've volunteered as a youth mentor for quite awhile (God help them, right? ) and we try to tell them that they can do whatever they want, be whoever they want, and get whatever they want through hard work. Because it's true. If we told them that they could laze through school, get poor grades, major in something useless, do drugs and party all the time, and then suck off the government tit to become successful, I'm sure so many of them would have turned out differently (rather than getting academic scholarships).... your position in life is usually your fault, but sometimes you don't know better.

Shoot for the moon and you might just get there. Aiming low is only cheating yourself.