Chinese Investors Driving Up Metro Housing Prices

[trofirhen]

Originally Posted by whatnext

Like any country with extreme poverty, China also has the opposite, the extremely wealthy, who accumulate wealth on the backs of the poor. Your hypothesis also ignores the fact that environmental regulations in Canada make it harder to amass a fortune through runaway environmental degradation.

I find it frustrating that some continue to dismiss this issue. Ask yourself, how is a Filipina who comes over here to work as a caregiver, scrimps and saves to bring her family over, supposed to compete with some well-heeled astronaut who jets over here to pick up a few properties? Yet, whose skills are more needed by Canadians? Some will give the glib answer that the Filipino family can buy in Pitt Meadows, but what if most of those jobs are on the West Side? There goes the Liveable Region Strategy that some are so enamoured with.

And on the topic of environment, check out the hideous monster homes going up in Richmond. Virtually no green space, and its not being done in the name of density. Its being done in the name of double-height living rooms, 3 car garages and people who don't want the burden of caring for yard when they spend so little time here.

Thank you WHATNEXT! You said what a lot of people don't have the guts to say.

[Zassk]

^^^ I don't know what to say... most people immigrating to Vancouver are from China, so we should expect most people buying properties in Vancovuer to be from the same place.

Monster houses aren't new. They predate the mainland China immigration wave.

Pre-sales speculation isn't new. It also predates the mainland China immigration wave.

Real estate inflation in Vancouver is as old as the post-war boom. Again, it didn't start with the Chinese.

They are just a convenient group to pick on currently.

If the Chinese stopped coming here and buying real estate, you can be sure that another group would take their place. The problem would not go away, it would just change demographic. Even if you shut the borders to investment, there would be people from other parts of Canada doing the same thing to Vancouver. Because it is the place where people want to live.

If you can't afford to live in the top-ranked city in the world that everyone else wants to live in ..... well, tough. Who gave you a fundamental right to afford the best place in the world? There are thousands of other places to live, and many of them are perfectly fine places to live.

[cornholio]

Originally Posted by Zassk

^^^ I don't know what to say... most people immigrating to Vancouver are from China, so we should expect most people buying properties in Vancovuer to be from the same place.

Monster houses aren't new. They predate the mainland China immigration wave.

Pre-sales speculation isn't new. It also predates the mainland China immigration wave.

Real estate inflation in Vancouver is as old as the post-war boom. Again, it didn't start with the Chinese.

They are just a convenient group to pick on currently.

If the Chinese stopped coming here and buying real estate, you can be sure that another group would take their place. The problem would not go away, it would just change demographic. Even if you shut the borders to investment, there would be people from other parts of Canada doing the same thing to Vancouver. Because it is the place where people want to live.

If you can't afford to live in the top-ranked city in the world that everyone else wants to live in ..... well, tough. Who gave you a fundamental right to afford the best place in the world? There are thousands of other places to live, and many of them are perfectly fine places to live.

Thats nice but reality is that Chinese investors, most of who dont live here and cant live here without scamming the immigration loop holes are buying up most of the properties right now and inflating the prices.

As for the right to buy or live here, as citizens this is our right, no one outside of here has a "right" to buy here, they are only given the privilege by us. As citizens it is our right to shut the doors to the whole world or anyone we deem a threat to our quality of life, at any time.

Seriously though ever since your first post though where you drew the race card I really dont even want to respond to you anymore. Please dont use the race card.

[cornholio]

Originally Posted by 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.

There are approximately 10,000,000 millionaires in the world.
#1) 2.87million in USA, #2) 1.65million in Japan, #3) 860,000 in Germany.

In China there are 477,000 millionaires and this number is growing incredibly fast. Infact this is up by 31% from 2008. At the recent rates they can have the most millionaires in the world in as little as 5 years, and certainly less than 10 years. Keep in mind these are new millionaires. These people all need to stash their money somewhere because when shit hits the fan in China who knows what will happen(complicated subject I dont want to get in to here).

From a report I read.

The report found that high net worth individuals see themselves as “investor-collectors”, seeking out those items that are perceived to have tangible long-term value.

[logan5]

Originally Posted by Zassk

If you can't afford to live in the top-ranked city in the world that everyone else wants to live in ..... well, tough. Who gave you a fundamental right to afford the best place in the world? There are thousands of other places to live, and many of them are perfectly fine places to live.

As well, the people that live here payed for the roads and bridges and schools and skytrain and all the other things that make this city function.

That gives me the fundamental right to afford the best place in the world.

We built it.

[Yume-sama]

HNWI from China seem to be collecting Gold and Silver along with their Vancouver properties

Now would be a good time to buy gold, despite how high it is.

Just based on how much China & India have been buying recently...

[Coldrsx]

Welcome to the free market, oh nos, wont somebody think of the children...

[logan5]

Originally Posted by Coldrsx

Welcome to the free market, oh nos, wont somebody think of the children...

What your saying is our children's future is for sale.

[Coldrsx]

Originally Posted by logan5

What your saying is our children's future is for sale.

and always has been...

[Zassk]

Originally Posted by logan5

As well, the people that live here payed for the roads and bridges and schools and skytrain and all the other things that make this city function.

That gives me the fundamental right to afford the best place in the world.

We built it.

I would venture to say that almost all of us who paid significant shares of taxes for that stuff, actually do own property here.

Honestly, what fundamental right do you want? The right to afford a condo on the downtown peninsula, or the right to afford a condo at the other end of the SkyTrain lines? The right to afford a detached house on the west side, or the right to afford a detached house on the periphery of Metro? Could you clarify what you think you are owed?

I think Yume's earlier post shows clearly that the majority can still afford this region in general, to the same extent as a few decades ago. Of course, they might not afford the specific neighbourhood or square footage that they want, but that's not new. Not everyone can live in a mansion in Shaughnessy or a penthouse on Georgia. Too bad.

[mrjauk]

Originally Posted by Coldrsx

Welcome to the free market, oh nos, wont somebody think of the children...

No, no, no...one million times no!! The Canadian real estate market is anything but free. A single policy decision would drop prices in Canada substantially literally overnight, and that is to not allow the banks to shuffle off mortgage debt to the CMHC.

If banks actually kept mortgage loans on their books, they would not be lending such stupid amounts of money to people. Simple. Case closed.

P.S. The mainland Chinese "investor" is not the cause of the run-up in Canadian real estate since 2000. Did you know that prices in world-class cities such as Saskatoon and Regina have grown more rapidly since 2000 than have prices in Vancouver?

The real estate bubble is a Canada-wide phenomenon and it's Canadian government policy that has caused it, specifically the creation and implementation of the Canada Mortgage Bond program beginning in 2001. Whereas CMHC bond issuance had never been more than 15 billion dollars during any year previously, beginning with the introduction of the CMB program, issuance has grown exponentially since, topping out at over 140 billion dollars in 2008, before taking a slight dip in 2009.

If you want to know more about this and also about how banks are effectively making money risk-free, thanks to taxpayer money, (free market my ass), here's a nice summary: scroll down to the post by broken_legs at 10:06 am.

[mrjauk]

Originally Posted by Zassk

...I think Yume's earlier post shows clearly that the majority can still afford this region in general, to the same extent as a few decades ago...

The only reason that a majority can still "afford" to buy in the region is because of the historically low interest rates and government policies that allow banks to make a killing while causing people to buy homes that cost much more than they should. Remove the tax-payer subsidization of banks in the mortgage sector and house prices would be much closer to rental equivalency.

We'll see how "affordable" the region is when government subsidies start to be phased out and interest rates climb back to average levels. It is then, to paraphrase Warren Buffett, that we'll see who has been swimming naked.

[wrenegade]

Who says it is a right to own property period? Numerous studies have shown that it is cheaper to rent vs. own, and apart from the period of 1998-2008 (or thereabouts) the increase in value has been similar to other investment vehicles. Of course home ownership has other reasons why people may opt for that route (forced savings, pride of ownership, many others), but I know people who could have easily afforded a home but have never bought one. One family I know have always rented. They moved often, used their incomes for other types of investments and now live comfortably in a 3 bedroom waterfront/view apartment on Beach avenue, still renting. While you may not be able to stay in the same place your entire life when you rent, most people don't anyways.

I'm not sure I would support such measures as forced occupation of property, what kind of precedent does that set? What if I (as a canadian born person) own a condo and live in it but then find myself moving overseas for work, perhaps for an extended period of time? Should I be forced to sell? I would otherwise be doing what many of these offshore investors are doing, renting my suite out. It's an unfortunate situation that many prospective home-buyers may feel that they are being priced out of the market, but it isn't just the fault of the Chinese buyers. They are typically buying condos (higher end) and luxury real estate in the west side of Vancouver, two types of homes that have generally been out of reach for most Vancouverites for a generation or more.

[logan5]

Originally Posted by Zassk

I would venture to say that almost all of us who paid significant shares of taxes for that stuff, actually do own property here.

Honestly, what fundamental right do you want? The right to afford a condo on the downtown peninsula, or the right to afford a condo at the other end of the SkyTrain lines? The right to afford a detached house on the west side, or the right to afford a detached house on the periphery of Metro? Could you clarify what you think you are owed?

I think Yume's earlier post shows clearly that the majority can still afford this region in general, to the same extent as a few decades ago. Of course, they might not afford the specific neighbourhood or square footage that they want, but that's not new. Not everyone can live in a mansion in Shaughnessy or a penthouse on Georgia. Too bad.

The RBC figure of 40% is deceptive and does not represent the majority of us.

In the past 25 years, our economy has grown considerably as have incomes. Unfortunately 30% of that income growth has gone to the top 1%. And the rest of that income growth has gone to the top 20%, while for the rest of us, our incomes have gone up with the rate of inflation while housing prices have skyrocketed.

The RBC figure is using average or median income. If Bill Gates rolls into town, on average we can all afford to buy a place downtown.

To clarify, I think the people of Vancouver are owed the right to housing prices determined by the local market. The local market that built this city.

[Coldrsx]

Originally Posted by mrjauk

No, no, no...one million times no!! The Canadian real estate market is anything but free. A single policy decision would drop prices in Canada substantially literally overnight, and that is to not allow the banks to shuffle off mortgage debt to the CMHC.

If banks actually kept mortgage loans on their books, they would not be lending such stupid amounts of money to people. Simple. Case closed.

P.S. The mainland Chinese "investor" is not the cause of the run-up in Canadian real estate since 2000. Did you know that prices in world-class cities such as Saskatoon and Regina have grown more rapidly since 2000 than have prices in Vancouver?

The real estate bubble is a Canada-wide phenomenon and it's Canadian government policy that has caused it, specifically the creation and implementation of the Canada Mortgage Bond program beginning in 2001. Whereas CMHC bond issuance had never been more than 15 billion dollars during any year previously, beginning with the introduction of the CMB program, issuance has grown exponentially since, topping out at over 140 billion dollars in 2008, before taking a slight dip in 2009.

If you want to know more about this and also about how banks are effectively making money risk-free, thanks to taxpayer money, (free market my ass), here's a nice summary: scroll down to the post by broken_legs at 10:06 am.

Do I think Canadian housing is overpriced, sure, but I don't think it is anything a free market.

[Spork]

Originally Posted by logan5

The RBC figure of 40% is deceptive and does not represent the majority of us.

In the past 25 years, our economy has grown considerably as have incomes. Unfortunately 30% of that income growth has gone to the top 1%. And the rest of that income growth has gone to the top 20%, while for the rest of us, our incomes have gone up with the rate of inflation while housing prices have skyrocketed.

The RBC figure is using average or median income. If Bill Gates rolls into town, on average we can all afford to buy a place downtown.

To clarify, I think the people of Vancouver are owed the right to housing prices determined by the local market. The local market that built this city.

Just wanted to stick my head in here with some data re: affordability.

• Prices (Metro Van)
  • 1996: 190,000
  • 2006: 370,000
  • +95%
• Median Income (Metro Van)
  • 1996: 43,964
  • 2006: 55,231
  • +26%
• Mortgage Interest Rates (30yr, Fixed, Avg.)
  • 1996: 7.32%
  • 2006: 6.28%
• Monthly Cost
  • 1996: 1,291
  • 2006: 2,633
  • +104%

Sources:

• Housing: http://www.vancouverreflections.com/...e-price-graph/
• Income: http://www.metrovancouver.org/about/...96-2001-06.pdf
• 1996 Rates: http://www.hsh.com/natmo96.html
• 2006 Rates: http://www.hsh.com/natmo2006.html

Costs have risen 104%, median income has risen 26%. Seems that affordability for the guy in the middle (median) has gone down.

I welcome all input into these calculations or logic.

[vanhattan]

Originally Posted by Spork

Just wanted to stick my head in here with some data re: affordability.

• Prices (Metro Van)
  • 1996: 190,000
  • 2006: 370,000
  • +95%
• Median Income (Metro Van)
  • 1996: 43,964
  • 2006: 55,231
  • +26%
• Mortgage Interest Rates (30yr, Fixed, Avg.)
  • 1996: 7.32%
  • 2006: 6.28%
• Monthly Cost
  • 1996: 1,291
  • 2006: 2,633
  • +104%

Sources:

• Housing: http://www.vancouverreflections.com/...e-price-graph/
• Income: http://www.metrovancouver.org/about/...96-2001-06.pdf
• 1996 Rates: http://www.hsh.com/natmo96.html
• 2006 Rates: http://www.hsh.com/natmo2006.html

Costs have risen 104%, median income has risen 26%. Seems that affordability for the guy in the middle (median) has gone down.

I welcome all input into these calculations or logic.

Logical and correct if the starting numbers are. For example, $370,000 for an average (what condo, sf house, etc.) in 2006? sounds awfully low to me.

Anyways, the last two years Vancouver was rated as #1 and #3 in the world for affordability calculated on the average income of residents as compared to the average cost of real estate. Vancouver tops this list simply because wages suck here and real estate prices are sky high. I am also assuming that your number are correct in that RE prices have zoomed way ahead of the average percentage of wage/income increases.

http://www.vancouverpropertynews.com...onal-study/39/

Another point I would like to make of the article. While we may have anecdotal evidence that the Chinese are buying a lot of Vancouver area real estate I have seen no statistical proof to back up this claim. Also, the writer of the article has virtually zero journalistic skills as evidenced by zero fact checking the Realtor's claim that he sold 500+ properties to Chinese in Jan and Feb. I mean, this could be a total puff piece planted in the paper as news when it is just a paid piece of realtor hype.

People need to demand more of what passes as journalism in this town and globally.

[WBC]

Originally Posted by trofirhen

I think there may be two main reasons for that:

1: The Chinese know that there is a large, wealthy, and influential Chinese population already established here and are comfortable with Vancouver as a landing pad.

2: They are savvy investors, have taken stock of the city, know that it is geographically constricted with constant in-migration, all of which will keep house prices (i.e. their investments) high; rather like buying blue-chip stocks.

I don't really see investing in individual houses on the top of the real estate peak as savvy investing but to each his own I guess. Why not simply buy gold? Silver? Or blue chip dividend paying stocks? Much easier, less messy and far less costly and can be liquidated in time of need immediately. In fact this is reminding me more of a Ponzi scheme then anything else.

[nova9]

Originally Posted by logan5

As well, the people that live here payed for the roads and bridges and schools and skytrain and all the other things that make this city function.

That gives me the fundamental right to afford the best place in the world.

We built it.

Right to afford the best place in the world? Rights in a democracy must apply universally. With this right, then we should really drop the condo prices at False Creek and make them affordable to everyone, even the homeless.

My question is, how do members of this forum feel about established Canadian families that own vacation homes throughout the world? I mean, I know so many of my friends' families that have homes in Spain, Thailand, Palm Springs. It's like a veritable marathon of "House Hunters International"

I genuinely fail to see the difference between those sorts of wealthy buyers versus the boogeyman Chinese buyer.

[nova9]

An article from the Vancouver Sun from EXACTLY 73 years ago today. Please read carefully and I present this without comment, truly: