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The Canadian Housing Boom Fueled by China’s Billionaires

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

#141

Post by allengeorge »

RandyRanderson wrote: post #94

As a vancouverite, and a person that's lived in Toronto for over a decade, I can say that while vancouver has about half the population (of T.O.) it has maybe 1/4 or 1/8 of the tech jobs. Also Canada is not like, say, the US, where there are many different industrial centers (ie Entertainment in LA or Finance in NY). In Canada, most corp headquarters are in Toronto and a small fraction are in Calgary and that's it. V…

The city of Vancouver's population is 600K, while Toronto's is 2.6M - over 4x as large. Are you talking about their CMA populations? (That seems more likely: ~2.6M vs. 5.6M)

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

#142

Post by skylan_q »

hifumi wrote: post #138
skylan_q wrote: post #123

The Chinese buyers are paying on average $900k for a house, which is what the average Canadian is buying. The percentage of Chinese buyers is anywhere from 4% to 8% in the market. What upsets me here more than anything else is that no one mentioned the CMHC. I suppose people would be more willing to believe that aliens are using mind control on people to drive a real estate frenzy rather than believe that there are i…

What is the "CMHC"?

Canadian Mortgage and Housing Corporation.

They insure the banks against mortgage default. People pay a small premium on their monthly mortgage payments so that if they default, the bank is insured for the cash difference of the outstanding amount on the mortgage.

As a result, banks in Canada face no risks from mortgage default so there's no reason to deny a mortgage. Over 90% of mortgages made in the past decade are CMHC-insured.

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

#143

Post by myth_drannon »

pjonesdotca wrote: post #134
kejaed wrote: post #124

Earlier quoted context omitted.

Exactly, how many people coming to Montreal would be happy that their kids could only go to school in French?

Probably about as many parents who are fighting to get their kids in French Immersion in the rest of Canada. I can't speak about anywhere other than Toronto but here it's quite sought after, second language for children. Especially amongst first generation immigrants like myself.

That's not because of French language, they would try even if it had Zulu immersion. It's just that it's cheaper than private schools, but you still get good students and quality environment

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

#144

Post by mark_l_watson »

arenaninja wrote: post #137
mark_l_watson wrote: post #131

Isn't the cause of rapidly rising real estate prices also caused by devaluations of currencies, so people with a lot of money are looking for relatively safe places to park it? In the USA real inflation is much higher than our government admits.

Do you have any supporting evidence to your claim that real inflation is much higher? I'm not trying to prove you wrong, I'm genuinely curious. My impression has been that inflation has been relatively low, with the exception of housing. Though housing has gone up much faster in large metros than the rest of the country

I have read that our government stresses consumer items like TVs in calculating the inflation index because tech product prices decrease rapidly. Food, housing and medical costs are increasing rapidly and get discounted in the CPI.

If the true rate of inflation were admitted, then cost of living increases for social security, etc. would be more expensive, right?

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

#145

Post by kohanz »

aminok wrote: post #105
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…

Billionaires buying houses does not increase housing costs. You do not need to purchase a Single Family House in Vancouver to have housing. You can buy a condo, the prices of which are totally uncoupled from SFHs, or rent. If foreign investors were leaving the houses they buy empty, and thus removing units from the housing stock, you might be able to make a case for foreign investment negatively impacting Vancouver h…

> You can buy a condo, the prices of which are totally uncoupled from SFHs

If domestic buyers can't afford SFH's and shift their attention to condos, this increases demand for condos, thus raising the price. It is practically impossible for the two to be "totally uncoupled".

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

#146

Post by allengeorge »

aminok wrote: post #115
seanmcdirmid wrote: post #111

Earlier quoted context omitted.

Eh. But aren't they biased? They were going through a lot of effort to show that there wasn't a bubble, or that the market wasn't being targeted by the Chinese.

I put the possibility of them massaging the data in some way at very remote. This study had a lot of eyeballs on it so risk of getting caught would be too high for them to entertain. Moreoever, the CoV grunts who do the actual work, like doing studies, seem both competent and of high integrity, and I don't think they'd be willing to betray their duty to the public and try to create a false impression of the unoccupan…

I'm also puzzled by some of the numbers they post.

They point out that non-occupancy in many other housing types is incredibly low (0% - 1%).

They then estimate condo non-occupancy as ~ 12.5% (I'd say that's a big deal, since most new housing stock is in condo form).

And finally point out that short-term-non-occupancy (aka. two months of the 4 they're counting) sits at ~ 10% across all housing types - without breaking out the numbers for condos alone, or clarifying whether this short-term-non-occupancy is on top of the non-occupancy numbers above.

Clarification welcome.

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

#147

Post by delecti »

rz2k wrote: post #37
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…

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…

Is there any reason that property taxes couldn't be increased solely on homes without residents? It would at least encourage putting foreign owned homes on the rental market.

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

#148

Post by sir_terenced »

pjonesdotca wrote: post #134
kejaed wrote: post #124

Earlier quoted context omitted.

Exactly, how many people coming to Montreal would be happy that their kids could only go to school in French?

Probably about as many parents who are fighting to get their kids in French Immersion in the rest of Canada. I can't speak about anywhere other than Toronto but here it's quite sought after, second language for children. Especially amongst first generation immigrants like myself.

The difference is that in the rest of Canada, your child (and their children) does not lose their right to go to English school if they go to a French school first.

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

#149

Post by ayuvar »

et-al wrote: post #4
hoodoof wrote: post #2

A disaster for people who believe Canadian citizens and permanent residents should be able to afford to buy a home in their own city. Great for those who own real estate and sell it.

It seems like the Canadian government is responding: > Foreign investors will have to pay an additional 15 percent in property-transfer tax as of Aug. 2 and city of Vancouver was given the authority to impose a new tax on empty homes. The additional tax on foreign investors is a good idea, but I wonder how it will be enforced, especially when ownership is often hidden behind trusts.

A huge portion of BC (and Canada's) economy since the oil price crash has been FIRE, so I would imagine there is no interest in bursting the real estate bubble.

The foreign investor tax is a low-effort attempt to skate through another election and maybe pick up a few bucks on the other side.

An actual solution to this problem will involve cooperation between the province and the feds at the very least to handle Canada's lax money laundering laws and the Quebec immigrant investor program, as other posters have said. And you are correct in that there have already been realtors caught and censured in BC for offering to help their clients sidestep this new tax using a white proxy buyer or a cut-out trust.

However, an actual solution is likely to also tank real estate values, which is reasonable when you think about how the average single detached home in Van is selling for a huge multiple of average wage.

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

#150

Post by [deleted] »

branchless wrote: post #119
celerystock wrote: post #104

Earlier quoted context omitted.

Unfortunately the software industry in Montreal has decided that developers are not valuable. Salaries are hilariously low compared to american counterparts.

Living costs are very low. And hours are good. Can you buy time? Do you want to live in a country with shameful inequality? Not me.

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