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High-end house rents in Vancouver plunge up to 20% as inventory spikes: experts

vancourier.com

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Re: High-end house rents in Vancouver plunge up to 20% as inventory spikes: experts

#21

Post by koolba »

Patrick_Devine wrote: post #14
tspike wrote: post #5

This is great news and may serve as a model for other cities facing similar housing shortages. Was the speculation tax a ballot measure or something passed at the city council level?

It's hard to draw direct comparisons between Vancouver and San Francisco's housing markets. Canada, as well as each of the provinces, local municipalities, and cities, have representational democracy, not a quasi-direct democracy like California. The spike in affordability in Vancouver wasn't caused directly due to a shortage in housing stock and an influx of residents. It was caused by rampant speculation from peopl…

> It guts schools because there aren't enough kids to fill classrooms.

That one doesn’t sound bad at all. Every other school district complains about the reviser, too many kids and not enough teachers / tax dollars.

Re: High-end house rents in Vancouver plunge up to 20% as inventory spikes: experts

#22

Post by crazypyro »

koolba wrote: post #21
Patrick_Devine wrote: post #14

Earlier quoted context omitted.

It's hard to draw direct comparisons between Vancouver and San Francisco's housing markets. Canada, as well as each of the provinces, local municipalities, and cities, have representational democracy, not a quasi-direct democracy like California. The spike in affordability in Vancouver wasn't caused directly due to a shortage in housing stock and an influx of residents. It was caused by rampant speculation from peopl…

> It guts schools because there aren't enough kids to fill classrooms. That one doesn’t sound bad at all. Every other school district complains about the reviser, too many kids and not enough teachers / tax dollars.

Not sure about Canada, but I know in many places in America, schools are budgeted on a per student basis, so losing kids (who still are going to school, just somewhere else) strains the school they are leaving with less money and then strains the schools where they are migrating to as the infrastructure now has to support more kids without having time to ramp up.

So I think the problem kind of goes both ways.

Re: High-end house rents in Vancouver plunge up to 20% as inventory spikes: experts

#23

Post by adventured »

kitcar wrote: post #17
meritt wrote: post #16

> A $3 million house that would have rented for $5,000 a year ago $5k/mo for a $3M home is a cap rate of just 2%. That's pretty terrible in itself. Now it's $4k/mo or 1.6%? How on earth is that financially sustainable at either amount?

In many cases the owners do not view it as an investment, it's a store of wealth that is difficult for the government of their home country to seize. Hence even if they lose money every year it's better then the alternative -

There's no value for the Chinese Government in seizing foreign personal homes of that sort. It's tens of billions of dollars, a trivial sum to them right now. They do not need that money. They need to strictly contain domestic capital from pouring overseas, which has largely been accomplished. And they need controls in place to restrict people from being able to easily flee, which they've also largely accomplished (social scores, heavy tracking, etc). For the most part it doesn't matter if you have a house in Vancouver if they can change a score and prevent you from ever flying away. If you have the audacity to try it anyway, they've probably got your family. Which is something they've used on many occasions to induce Chinese nationals to return.

Re: High-end house rents in Vancouver plunge up to 20% as inventory spikes: experts

#24

Post by toomuchtodo »

adventured wrote: post #23
kitcar wrote: post #17

Earlier quoted context omitted.

In many cases the owners do not view it as an investment, it's a store of wealth that is difficult for the government of their home country to seize. Hence even if they lose money every year it's better then the alternative -

There's no value for the Chinese Government in seizing foreign personal homes of that sort. It's tens of billions of dollars, a trivial sum to them right now. They do not need that money. They need to strictly contain domestic capital from pouring overseas, which has largely been accomplished. And they need controls in place to restrict people from being able to easily flee, which they've also largely accomplished (s…

You might be misunderstanding the use case. The Chinese with wealth moved their wealth out of China to real estate in London, Canada, and parts of the US specifically to put it out of reach of the Chinese government and to avoid the capital outflow controls you refer to.

Once safely outside of the PRC's reach, it's trivial to move the wealth around using corporate entity ownership (among other methods).

Re: High-end house rents in Vancouver plunge up to 20% as inventory spikes: experts

#25

Post by joncrane »

Patrick_Devine wrote: post #14
tspike wrote: post #5

This is great news and may serve as a model for other cities facing similar housing shortages. Was the speculation tax a ballot measure or something passed at the city council level?

It's hard to draw direct comparisons between Vancouver and San Francisco's housing markets. Canada, as well as each of the provinces, local municipalities, and cities, have representational democracy, not a quasi-direct democracy like California. The spike in affordability in Vancouver wasn't caused directly due to a shortage in housing stock and an influx of residents. It was caused by rampant speculation from peopl…

Wait, people were treating real estate in Vancouver like putting their money in the stock market?

And on top of that, there were lots of real estate investors who weren't even trying to keep their places occupied?

Isn't that super irresponsible investing?

Re: High-end house rents in Vancouver plunge up to 20% as inventory spikes: experts

#26

Post by darawk »

crazypyro wrote: post #22
koolba wrote: post #21

Earlier quoted context omitted.

> It guts schools because there aren't enough kids to fill classrooms. That one doesn’t sound bad at all. Every other school district complains about the reviser, too many kids and not enough teachers / tax dollars.

Not sure about Canada, but I know in many places in America, schools are budgeted on a per student basis, so losing kids (who still are going to school, just somewhere else) strains the school they are leaving with less money and then strains the schools where they are migrating to as the infrastructure now has to support more kids without having time to ramp up. So I think the problem kind of goes both ways.

In America, schools are also funded by property tax, though.

Re: High-end house rents in Vancouver plunge up to 20% as inventory spikes: experts

#27

Post by adventured »

toomuchtodo wrote: post #24
adventured wrote: post #23

Earlier quoted context omitted.

There's no value for the Chinese Government in seizing foreign personal homes of that sort. It's tens of billions of dollars, a trivial sum to them right now. They do not need that money. They need to strictly contain domestic capital from pouring overseas, which has largely been accomplished. And they need controls in place to restrict people from being able to easily flee, which they've also largely accomplished (s…

You might be misunderstanding the use case. The Chinese with wealth moved their wealth out of China to real estate in London, Canada, and parts of the US specifically to put it out of reach of the Chinese government and to avoid the capital outflow controls you refer to. Once safely outside of the PRC's reach, it's trivial to move the wealth around using corporate entity ownership (among other methods).

I don't misunderstand. I said that even if they've managed to get their capital outside of China, it doesn't matter. If they flee, China still can induce their return.

It's not trivial to move capital around using foreign corporate entities, when they track all of your communication within China. If they even so much as get a hint of that going on, and it bothers them in the least, they can do anything they like to you at that point. The hint of suspicion is more than enough, if it suits them. Being able to move capital around is meaningless, if you're not entirely physically free yourself as well.

Your scenario is only a sure thing, if you've escaped your capital and everyone you care about.

Re: High-end house rents in Vancouver plunge up to 20% as inventory spikes: experts

#28

Post by [deleted] »

adventured wrote: post #27
toomuchtodo wrote: post #24

Earlier quoted context omitted.

You might be misunderstanding the use case. The Chinese with wealth moved their wealth out of China to real estate in London, Canada, and parts of the US specifically to put it out of reach of the Chinese government and to avoid the capital outflow controls you refer to. Once safely outside of the PRC's reach, it's trivial to move the wealth around using corporate entity ownership (among other methods).

I don't misunderstand. I said that even if they've managed to get their capital outside of China, it doesn't matter. If they flee, China still can induce their return. It's not trivial to move capital around using foreign corporate entities, when they track all of your communication within China. If they even so much as get a hint of that going on, and it bothers them in the least, they can do anything they like to y…

[deleted]

Re: High-end house rents in Vancouver plunge up to 20% as inventory spikes: experts

#29

Post by projectramo »

jimrandomh wrote: post #11
goatherders wrote: post #9

Earlier quoted context omitted.

I believe the city has been adding different things for the last couple years trying to open up more rentals. If I recall correctly something like 25% of all condos downtown are unoccupied which is insane. They arent even available to rent, just sitting their empty. It has had a real effect on employment, especially in tech. A friend of mine at hootsuite laments that sometimes they miss on great hires because even th…

> If I recall correctly something like 25% of all condos downtown are unoccupied which is insane. They arent even available to rent, just sitting their empty. You do not recall correctly. https://www.reuters.com/article/canada-housing-vancouver/nea...

I think i see the confusion:

1% vacancy

5% unoccupied but not open to rent

So of the houses that are unoccupied, only 20% are vacant?

(I actually read it as 1/6th but the point is where the confusion may have come from)

Re: High-end house rents in Vancouver plunge up to 20% as inventory spikes: experts

#30

Post by derefr »

adventured wrote: post #27
toomuchtodo wrote: post #24

Earlier quoted context omitted.

You might be misunderstanding the use case. The Chinese with wealth moved their wealth out of China to real estate in London, Canada, and parts of the US specifically to put it out of reach of the Chinese government and to avoid the capital outflow controls you refer to. Once safely outside of the PRC's reach, it's trivial to move the wealth around using corporate entity ownership (among other methods).

I don't misunderstand. I said that even if they've managed to get their capital outside of China, it doesn't matter. If they flee, China still can induce their return. It's not trivial to move capital around using foreign corporate entities, when they track all of your communication within China. If they even so much as get a hint of that going on, and it bothers them in the least, they can do anything they like to y…

You’re assuming that the person trying to expropriate wealth cares about being able to spend it themselves, rather than e.g. their family who already lives in Canada being able to spend it while they sit in jail.

Think in terms of nobility: what’s more important, your head or your dynasty?

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