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The Canadian Housing Boom Fueled by China’s Billionaires

bloomberg.com

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Re: The Canadian Housing Boom Fueled by China’s Billionaires

#71

Post by Khaine »

a_bonobo wrote: post #68
vivekd wrote: post #11

Earlier quoted context omitted.

I agree with you that there should be restrictions on foreign investors looking to housing as investment. . . at the same time, I am worried that they are being used as scapegoats to avoid addressing much larger structural economic and legislative problems behind the inflationary price increase. In fact I think these foreign investors are more being attracted by the already inflating prices than actually the culprit…

>Being used as scapegoats That's what it looks like for me with the Australian housing market where the Chinese are being blamed for increasing prices. China is the biggest foreign investor in the Australian housing market followed by the US with $12 billion out of $34 billion foreign investment in 2013-14 [1], but it can't be the only explanation. As a non-permanent resident you can only buy from the plan, no 'used'…

Except, the FIRB does not collect adequate data to truely monitor the acquisition of housing by non-Residents, and these regulations are easily to get around and are often flaunted.

Re: The Canadian Housing Boom Fueled by China’s Billionaires

#72

Post by pedalpete »

decayy wrote: post #63

This is happening in Australia too. There are new apartment buildings going up by Chinese property developers aimed squarely at the growing Chinese population. As a matter of fact, construction management university students are told to study Chinese language and culture to help them get jobs after uni

I'm from Canada (Whistler, north of Vancouver) and now live in Sydney, Australia.

Australia is nowhere near as bad as Canada. I'm amazed this article glanced over the issues Vancouver is really struggling with.

I believe the housing market in Sydney will come into trouble, but Canada is in for a very rude awakening.

I'll post another comment re:these serious issues canada faces.

Re: The Canadian Housing Boom Fueled by China’s Billionaires

#73

Post by throwaway201607 »

There are some simple fixes to people's issues. 1) Charge more for everything 2) If you cannot get a good deal, then leave. 3) Stop playing games where you sacrifice yourself trying to compete against people who sacrifice very little but have much. These billionaires are flippant about these things because it cost them nothing (personally) to get the wealth. When you make $64M a year, a $4M condo is nothing. But when a paralegal and a plumber scrimp and save to try and compete, it will cost them everything. Better to just move to another city and not play the game. Or charge the billionaire $400 an hour for plumbing.

Re: The Canadian Housing Boom Fueled by China’s Billionaires

#74

Post by lpaone »

Gustomaximus wrote: post #50
lpaone wrote: post #30

What isn't talked about in this article is the effect this is having on the other industries in the city aside from real estate. I believe that Vancouver has potential to be THE tech hub in Canada. Unfortunately, wages are very low compared to the cost of housing, and so the cost of living is super high. Combine that with extremely low vacancy rates, and it is very hard to attract talent from out of town. In fact, ma…

This lacks recognition. So many factors could come into play. E.g. The downstream effects of house prices has to hit entrepreneurship. Previously a bunch of people would be in a good place to take a couple years off to start a business mid-career. Now people have these huge mortgages where your ability to start a business is hampered by your ability to get a financial buffer to take this year or 2 off. And lets not f…

Some great points here for sure.

I forgot to mention in my post that not only is the government in bed with the real estate industry (new rumors that the biggest real estate marketer in the city was notified weeks in advance about the new foreign buyer tax), but that they also "unexpectedly" took in 50% more than forecast, to the toon of $500+ million, in extra property transfer tax last year. Good luck getting them to slow down that gravy train.

Re: The Canadian Housing Boom Fueled by China’s Billionaires

#75

Post by pedalpete »

Very surprised Bloomberg would put out such a fluff piece about the Vancouver Real Estate market.

There are very serious issues in Vancouver, and some suspect Canada is in for a ruder awakening than the US. http://www.vice.com/en_ca/read/meet-the-wall-street-short-se...

1) Canadian Real Estate is being used as a money laundering facility http://www.huffingtonpost.ca/ike-awgu/canadian-real-estate-f... .

2) Canada also has a healthy (well, actually unhealthy) sub-prime lending market http://www.huffingtonpost.ca/2016/05/18/subprime-lending-can...

3) Then there is the issue of occupancy. The reason the 15% tax was brought in is because money was coming in to purchase houses which then sat empty. Many have become derelict. When I lived in Vancouver, Yaletown was full of apartment towers, but where were all the people (I believe occupancy in that area has improved). http://www.theglobeandmail.com/real-estate/vancouver/poking-...

4) Lastly, the shadow flipping, again, mentioned in the article, but didn't get the attention it deserved http://bc.ctvnews.ca/house-flipping-concerns-as-368-vancouve...

Don't worry if you don't want to read the articles, it will be a movie in a few years along the lines of The Big Short.

Re: The Canadian Housing Boom Fueled by China’s Billionaires

#77

Post by happyslobro »

dottedmag wrote: post #28
jackcosgrove wrote: post #9

Earlier quoted context omitted.

I used to think you had to live in an "it" city to make it. Then I realized that I could make my life whatever I wanted to be more easily in a less expensive place. The chains were in my head.

Yes, until you have a family. Then suddenly you need a good school nearby (and good luck bringing children to school in car if they have serious case of motion sickness).

I walked to school back when I was in elementary school. In grade 2, my mother confirmed that I remembered the stranger rules, and stopped walking with me. It was about a 2km walk.

Why is it ok for this to not be the norm? Why do people just accept that their kids are growing up in a city where they can't be allowed to explore their environment?

Re: The Canadian Housing Boom Fueled by China’s Billionaires

#78

Post by a_bonobo »

Khaine wrote: post #71
a_bonobo wrote: post #68

Earlier quoted context omitted.

>Being used as scapegoats That's what it looks like for me with the Australian housing market where the Chinese are being blamed for increasing prices. China is the biggest foreign investor in the Australian housing market followed by the US with $12 billion out of $34 billion foreign investment in 2013-14 [1], but it can't be the only explanation. As a non-permanent resident you can only buy from the plan, no 'used'…

Except, the FIRB does not collect adequate data to truely monitor the acquisition of housing by non-Residents, and these regulations are easily to get around and are often flaunted.

Do you have any proof for either statement?

All I could find is the 2014 report on the FIRB which said they would never initiate court proceedings; http://www.abc.net.au/news/2014-11-27/foreign-buyer-rule-enf...

I have no clue how much has changed there since then, and I don't assume anything will change. This still doesn't mean that any of my original points are wrong, the entire system is bad and IMHO Chinese foreign investment is just a scapegoat (if you look at the report, at that time Chinese investment was already the highest but back then very close ($5.9 billion) to US ($4.4 billion) and Canadian ($4.9 billion) investment: Why did no-one complain about either?)

Re: The Canadian Housing Boom Fueled by China’s Billionaires

#79

Post by linkregister »

paulsutter wrote: post #67
rz2k wrote: post #37

Earlier quoted context omitted.

Introduction of a gradual increase in property taxes, as well as a gradual decease in income taxes, even lower than zero if appropriate, would be the naïve, straightforward economic policy recommendation if the problem has been accurately described. Some details yo resolve would be the numerous people who were using their primary residence as their main investment for retirement, and deciding how to handle people who…

Why gradual? (not disagreeing, just asking)

Impact on retirees, impact on existing resident property owners, and lack of control over what income tax Ottawa sets are a few reasons.

Re: The Canadian Housing Boom Fueled by China’s Billionaires

#80

Post by Gustomaximus »

lpaone wrote: post #74
Gustomaximus wrote: post #50

Earlier quoted context omitted.

This lacks recognition. So many factors could come into play. E.g. The downstream effects of house prices has to hit entrepreneurship. Previously a bunch of people would be in a good place to take a couple years off to start a business mid-career. Now people have these huge mortgages where your ability to start a business is hampered by your ability to get a financial buffer to take this year or 2 off. And lets not f…

Some great points here for sure. I forgot to mention in my post that not only is the government in bed with the real estate industry (new rumors that the biggest real estate marketer in the city was notified weeks in advance about the new foreign buyer tax), but that they also "unexpectedly" took in 50% more than forecast, to the toon of $500+ million, in extra property transfer tax last year. Good luck getting them…

The gravy train doesn't have to stop. With a non-owner tax they ride a new gravy train. And the biggest complainers will be non-voting foreigners that dont matter and the foreign governments like China will hardly care exiting money is being punished, so bonus. It will be tough for those that bough at the peak, but it seems those will be the minority to the almost 50% of the population in my town that cant afford a home in their own city.

That said the 'loudest' voices will be the uber wealthy with large property holdings so again...good luck...

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