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...#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_...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_...116513228.html

[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.

[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

[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.

[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

[cornholio]

The system here is setup in such a way that not only allows but attracts foreign investment and speculation in to real estate prices(this includes all the wealthy people who gain residency status through our flawed immigration process).

This is unsustainable in the long run and eventually action will need to be taken by the Federal government, and this action will put downward pressure on prices. Canada is one of the few western countries left thast still doesnt have a solid policy and restrictions on foreign realestate ownership and investment, like most other western countries eventually Canada will be forced to also create restrictions and new policies.

Right now our prices reflect the demand of our realestate globally, and thus are inflated. However eventually realestate will be "mostly" available only to citizens and the prices will change to reflect the true demand, that is the demand by the people capable of using it(citizens and residents).

I do think the conservatives with a majority will tackle this issue, and as we speak one of their current priorities is revamping our immigration system which believe it or not will make it harder for people to buy their way in with their wealth.

Every time a new resident comes in that is wealthier then the average Canadian then our realestate prices go up, yet the buying power of Canadians doesnt. That is why immigration needs to be balanced.

You can be sure of one thing though, in the future it will be harder for foreigners to buy and thus inflate realestate prices, not easier.
The question though is when will this become a public enough issue and be taken head on by the feds.

[cornholio]

I think people taking part in this thread should really go and look at what has hapend in many other parts of the world. Look at Spain, Australia, most of eastern Europe, Mexico, etc, etc. There are so many examples of exactly what will happen here if the government doesnt take action. The longer no action is taken the harder it will be to prevent a crash from happening when action is finally taken, and no action is not a option as this is not sustainable and eventually something big will have to give, an no one wants that to happen.

[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.

[SpongeG]

what examples are those? and where does one look? i don't know anything about real estate

[Yume-sama]

There are a ridiculous amount of extenuating circumstances to Spain, Greece, Iceland, Ireland Europe, etc. that one can not possibly honestly compare Vancouver (and thus Canada as a whole) to them. It is really grasping at straws~ It has a lot to do with IMF policies, government actions, etc. that one can not even go in to because it would take weeks to study the issue completely, and I wouldn't feel comfortable debating the issue without knowing *all* of the facts (and frankly I don't care that much ). Of course, that doesn't stop people who know none of the facts from saying such broad statements.

There were mass anti-IMF demonstrations throughout Europe in Iceland, Ireland, Spain, Greece etc...

You are right in a very *general* sense that foreign involvement was behind their downfall But it went way beyond a wealthy Asian buying a condo in Barcelona.

To claim otherwise is absurdly (and knowingly deceitfully) simplistic.

[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.

[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.

[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.

[trofirhen]

Originally Posted by dreambrother808

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

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.

Originally Posted by cornholio

I think people taking part in this thread should really go and look at what has hapend in many other parts of the world. Look at Spain, Australia, most of eastern Europe, Mexico, etc, etc. There are so many examples of exactly what will happen here if the government doesnt take action. The longer no action is taken the harder it will be to prevent a crash from happening when action is finally taken, and no action is not a option as this is not sustainable and eventually something big will have to give, an no one wants that to happen.

This is a really touchy issue, not only because Vancouver has, and has always had, a large Asian population, but also because many forum members themselves are Asian and are going to feel offended by many remarks on this topic, be they made here or elsewhere. I've made one or two rude remarks and got rightly slapped for it.

However ... from a purely pragmatic point of view, if a wealthy Chinese person currently living and working in China (no, not necessarily HK) has made a lot of money and wants to keep it in a tax-haven, or stable investment, it is only natural that they buy expensive houses here. That's just good business, from their point of view.

For average Canadians - of whatever race - working steady, perhaps after five years of university - the prospect of never being able to buy even a starter home seems grossly unfair and a slap in the face. Maybe it is. Or maybe that's just "business is business; let the market decide." Forumers can debate that one.

There are, however, measures that a government CAN take (if it has the will) that are not exclusivist, but put a limit on offshore money driving the real estate market through the roof.

An example is Australia, where offshore (yes, mostly Asian) investors CAN buy expensive properties, BUT ONLY IF THEY ACTUALLY RESIDE IN THEM. This puts the brakes on tax-break money inflating the market like a balloon, and mitigates anti-foreigner resentment. ** In fact, this has been mentioned before, somewhere here on SSP Vancouver, I forget where.

The real culprit is a "sell-your-own-mother" government that drops its pants and bends forward just to make a quick buck at any price, to cater to whatever lobby it's catering to.

There is too much black-and-white thinking in Canada (and hey, I'm an ignoramus on all this, so please don't yell at me) .... but a happy and reasonable medium can surely be found if people are willing to to look at all the angles, think things through, and pass laws accordingly. Thank you.