Canada Housing/Debt: Trust me, I'm a landlord.

The Something Awful Forums > Discussion > Debate & Discussion > Canada Housing/Debt: Trust me, I'm a landlord.

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UnfortunateSexFart: May 18, 2008; ð» ððð« ð·ððð·
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Jumpingmanjim posted:

So how do you keep house prices growing in a recession?

As long as China is not in a recession we're fine. In Vancouver and maybe Toronto anyway.

# ? Jun 22, 2015 20:29

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# ? May 23, 2024 14:01

etalian: Mar 20, 2006

lmao Bombardier was unable to land a single contract after the Paris air show this year:
http://www.bnn.ca/News/2015/6/19/Bombardier-leaves-Paris-Airshow-without-CSeries-orders.aspx

# ? Jun 23, 2015 01:22

PT6A: Jan 5, 2006; Public school teachers are callous dictators who won't lift a finger to stop children from peeing in my plane

etalian posted:

lmao Bombardier was unable to land a single contract after the Paris air show this year:
http://www.bnn.ca/News/2015/6/19/Bombardier-leaves-Paris-Airshow-without-CSeries-orders.aspx

Bombardier's planes are poo poo and I never want to fly on any of them again, unless it's a business jet. It takes a lot of work to make a plane that's less comfortable than an Embraer, but evidently it's possible. Airbuses frighten me more, but at least they're comfortable and probably not any less safe, when you get right down to it.

# ? Jun 23, 2015 05:54

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

http://bc.ctvnews.ca/video?clipId=639061

let them eat Fort St John

# ? Jun 23, 2015 18:27

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

http://www.timescolonist.com/life/islander/nanaimo-grapples-with-50-million-hotel-plan-1.1975179

Why on Earth would anyone want to host a conference in Nanaimo? The island as a whole including Victoria is fundamentally unsuitable given the attendant travel hassles both to and on it, but Nanaimo? a.k.a. 'Surrey by the Sea'

:laugh:

# ? Jun 23, 2015 18:50

Baronjutter: Dec 31, 2007; "Tiny Trains"

Yeah, even in tourism-focused Victoria we're closing down hotels and converting them to over-priced hipter-techworker apartments because vacancy is under 75%. I can't believe Nanaimo is willingly getting strung along like that.

# ? Jun 23, 2015 19:08

namaste friends: Sep 18, 2004; by Smythe

You guys need a multi billion dollar convention center and a casino.

# ? Jun 23, 2015 19:13

Ceciltron: Jan 11, 2007; Text BEEP to 43527 for the dancing robot!; Pillbug

Cultural Imperial posted:

You guys need a multi billion dollar convention center and a casino.

I can see it now! Trump Towers BC, specialty in catering to only the most crass and opulent mainland Chinese embezzlers.

# ? Jun 23, 2015 19:58

Furnaceface: Oct 21, 2004

Lexicon posted:

http://bc.ctvnews.ca/video?clipId=639061

let them eat Fort St John

Every time I get angry, frustrated or pissed off at the OLP I know I can turn to Christie Clark to make myself think "Well, it could be worse!".

Are there any active volcanoes in BC still? Maybe we can hope one erupts while she is flying over it to go see that great view in Kitimat or Fort St John.

# ? Jun 23, 2015 21:29

Helsing: Aug 23, 2003; DON'T POST IN THE ELECTION THREAD UNLESS YOU JOE BIDEN

So, while the Canadian economy is probably particularly poorly positioned because of our crappy fundamentals there are bubbles inflating all around the world:

quote:

Markets More: Nouriel Roubini 2015 Forecasts 2016 Forecasts
ROUBINI: The Mother Of All Asset Bubbles Will Burst In 2016

AKIN OYEDELE

DEC. 5, 2014, 7:55 PM

In February 2013, NYU professor Nouriel Roubini made the call that US markets had entered the "mother of all asset bubbles."

With the rally in stocks that we've seen this year and a surge in high-yield debt issuance, Roubini said we're now at the midpoint of the bubble, in an interview with Yahoo Finance.

Next year may see more gains across markets, but the bubble, bigger than the one before the 2008 recession, could pop in 2016.

Because there is low growth, and low inflation in much of the world, there is liquidity that's leading to asset inflation, Roubini said:

quote:
"I think that this frothiness that we have seen in financial markets is likely to continue, from equities to credit to housing, and in a couple of years, most likely, this asset inflation is going to become asset frothiness and eventually an asset and a credit bubble and eventually any bubble ends up in a bust and a crash. I would say that valuations in many markets, whether it�s government bonds or credit, or real estate, or some equity markets, are already stretched. And they�re going to become more stretched as the real economy justifies the slow exit, and all this liquidity is going to go into more asset inflation. So two years down the line, we could have this shakeout � 2016 I would say."

His advice for investors is to be underweight US equities next year as stock valuations increase, particularly in the biotech, technology and social media sectors. Emerging markets that are heavy oil importers and will benefit from lower oil prices are attractive.

Here's the full interview.

My question to the thread: are all of these timebombs going to detonate together (or in close sequence) or is there any chance that Canada will either lead the pack or maybe even hang on longer? We've heard rumblings for some time about condos in places like Toronto not selling as fast but are we going to have to wait for the rest of the world to implode before financial Armageddon arrives in the True North?

# ? Jun 23, 2015 22:35

Baronjutter: Dec 31, 2007; "Tiny Trains"

They are starting to actually build more rental buildings, but even here in Victoria there's like 5 new condo towers going up and a bunch of mega-projects that were stalled out are getting back in gear and the whole industry is abuzz talking about a new boom and the new normal.

# ? Jun 23, 2015 22:44

Helsing: Aug 23, 2003; DON'T POST IN THE ELECTION THREAD UNLESS YOU JOE BIDEN

I can imagine how loving pissed off some of you guys are going to be if the Canadian bubble only bursts during a global downturn, because all those home owning relatives and co-workers will never give you the satisfaction of saying you were right. They'll just claim they got screwed by totally unforeseen global market forces beyond the power of any mortal to understand, let alone predict or control.

# ? Jun 23, 2015 22:52

UnfortunateSexFart: May 18, 2008; ð» ððð« ð·ððð·
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Ceciltron posted:

I can see it now! Trump Towers BC, specialty in catering to only the most crass and opulent mainland Chinese embezzlers.

Not sure how that is different from every other tower in BC. If you walk into a sales centre in Burnaby and don't look Chinese they look at you like you must be lost.

# ? Jun 24, 2015 00:01

ocrumsprug: Sep 23, 2010; by LITERALLY AN ADMIN

To answer your earlier question, people call stock market bubbles anytime the market hasn't crashed for more than two months. (Then those same people generally call 1930s global depression everytime it does correct.) ie. The allusion to 2008 being a market bubble pop, where it was something quite different that caused the GFC.

Now it is certainly true that there is a lot of excess capital rolling around yield seeking, but I am not sure you are seeing irrational exuberance, or shoe shine boys with stock tips quite yet. (These things are totally happening in Chinese markets OTOH.) What you are seeing in American markets is pricing in the anticipated economic recovery.

Helsing posted:

I can imagine how loving pissed off some of you guys are going to be if the Canadian bubble only bursts during a global downturn, because all those home owning relatives and co-workers will never give you the satisfaction of saying you were right. They'll just claim they got screwed by totally unforeseen global market forces beyond the power of any mortal to understand, let alone predict or control.

Watching some of them living with their kids in the leased BMW will suffice, even if they think it was Greek hairdressers destroying the EU that done it.

# ? Jun 24, 2015 00:04

MrChips: Jun 10, 2005; FLIGHT SAFETY TIP: Fatties out first

PT6A posted:

Bombardier's planes are poo poo and I never want to fly on any of them again, unless it's a business jet. It takes a lot of work to make a plane that's less comfortable than an Embraer, but evidently it's possible. Airbuses frighten me more, but at least they're comfortable and probably not any less safe, when you get right down to it.

That's all the airline's fault; Bombardier actually builds very good aircraft. In fact a lot of the airframe builders are very quietly getting more and more frustrated with the airlines cramming more and more seats into their aircraft and making their new, technological marvels into ever more miserable cattle cars.

The biggest reasons why Bombarier can't sell their aircraft right now is because a) Bombardier management has their heads up their asses, and b) their competitors (Boeing, Airbus, EMBRAER and the like) are very heavily subsidised by their governments (both directly and indirectly with things like Ex-Im banks, military contracts and whatnot) while Stephen Harper is seemingly unwilling to help out anything that doesn't come out of the ground.

MrChips fucked around with this message at 00:27 on Jun 24, 2015

# ? Jun 24, 2015 00:23

Femtosecond: Aug 2, 2003

National Post weighs in on foreign buyers

quote:

http://news.nationalpost.com/full-comment/national-post-view-scapegoating-foreign-buyers

National Post View: Scapegoating foreign buyers

Should housing go on a hundred-mile diet? Vancouver real estate developer Bruce Langereis thinks so: this week, he made headlines for restricting the sale of an $18-million penthouse to �local buyers only.� �I want someone fun, someone who will connect with the residents,� he told the National Post. �Not someone who treats this place like a hidden chamber and then leaves.�

Langereis� unit has been on the market for three years, and so far no purchaser has met his terms. But his position is part of a growing call for restrictions on foreign real estate ownership, as Metro Vancouver home prices spiral ever higher. Earlier this month, Vancouver Mayor Gregor Robertson asked B.C. Premier Christy Clark to implement �extraordinary tax measures,� including a luxury and vacancy tax, to curb real estate speculation. A petition calling for restrictions on foreign ownership has garnered over 25,000 signatures.

But it�s not clear that foreign ownership is to blame for these woes. In response to Robertson�s demands, Clark cited a report by the Ministry of Finance and the B.C. Real Estate Association, which found that foreign buyers make up only five per cent of home sales and activity in Greater Vancouver. While a reduction in foreign investment would have little impact on general housing prices, the authors calculated it would cause the loss of about $1 billion in residential real estate sales and 3,800 jobs in construction and real estate sectors, as well as a drop of $350 million in GDP.
The report also found that similar restrictions in markets such as Hong Kong and Singapore have been counterproductive, causing rents and vacancy rates to rise. They also do little in the face of counter-incentives that encourage home ownership. An example of this is Australia, which implemented rules requiring foreign owners to �add to existing housing stock.� Like Canada, however, Australia exempts 100% of the capital gains on primary residence sales from tax. It also exempts portions of homes used for rental purposes, and the gains on main residences that are inherited. In a low-interest environment, Australians thus have every incentive to plow their money into real estate, which may explain why they have the third-highest household debt-to-income ratio in the world.

The reality is that property prices rise for the same reason as for any other commodity: scarcity. In the case of real estate, that scarcity is mostly due to the lack of available land, particularly for detached single family homes. By one Vancouver realtor�s estimate, if no new detached houses came on the market, the supply would dry up in 35 days. As a result, the average price of such a house hit $2.23 million in May. This situation is not unique to Vancouver: other major Canadian markets, such as Toronto, are experiencing the same effect.

While the high cost of housing is a concern for those who want to get into the market, no one seems to spare a thought for existing homeowners � pensioners, for example, or those nearing retirement, for whom the equity in their house is a kind of pension � who might prefer the value of their investment were not undermined in this way. It is not clear why it should be government policy to redistribute from all homeowners, rich or poor, to all home-buyers, poor or rich. Yet that would be the practical effect of any limitation on ownership or use, whether a ban on foreign ownership, a vacancy tax or other mechanism: not only a reduction in homeowner equity, but also reduced incentives to build new homes. Which can hardly help in the long run.

Rather than impose new restrictions, cities could rezone to increase density, and reduce needless regulations that stand in the way of building new housing stock to meet demand. Rather than scapegoat foreigners, likewise, governments should consider the impact of tax and mortgage policies that artificially inflate the demand for housing. It�s just not as simple as signing a petition.

National Post

quote:

Rather than impose new restrictions, cities could rezone to increase density, and reduce needless regulations that stand in the way of building new housing stock to meet demand.

Vancouver has been building non stop since the 90s..?

# ? Jun 24, 2015 00:41

etalian: Mar 20, 2006

lolling how people think more density and more housing units is somehow a panacea to the overpriced housing problem.

# ? Jun 24, 2015 00:49

Helsing: Aug 23, 2003; DON'T POST IN THE ELECTION THREAD UNLESS YOU JOE BIDEN

ocrumsprug posted:

To answer your earlier question, people call stock market bubbles anytime the market hasn't crashed for more than two months. (Then those same people generally call 1930s global depression everytime it does correct.) ie. The allusion to 2008 being a market bubble pop, where it was something quite different that caused the GFC.

Now it is certainly true that there is a lot of excess capital rolling around yield seeking, but I am not sure you are seeing irrational exuberance, or shoe shine boys with stock tips quite yet. (These things are totally happening in Chinese markets OTOH.) What you are seeing in American markets is pricing in the anticipated economic recovery.

Well this is not exactly my field but I don't see how you can deny that a big part of the story in 2008 was the popping of the American real estate bubble. Sure there are some deeper structural reasons behind the inflation of that bubble - shadow banking, financialization, perhaps even a declining rate of profit (depending on how one define's profit) - but regardless of why it happened, there was clearly an asset bubble and the popping of that bubble clearly did a lot of damage to the economy. A lot of folks lost their jobs, other people lost the equity in their homes, etc.

As for current economic conditions I'm not an expert but it seems like ultra low interest rates world wide, low economic growth, and especially quantitative easing must be interfering with price discovery. How the hell could anyone be expected to know what an assets real value is in these conditions? I don't really watch global markets closely enough to have a truly informed opinion on this but what I do know about global markets is enough to make me very uneasy. The world economy looks very unstable at the moment. If you have any information to reassure me please share it.

etalian posted:

lolling how people think more density and more housing units is somehow a panacea to the overpriced housing problem.

Seems about right. Just like the solution to a stagnant job market is to try and push more people into university or college.

# ? Jun 24, 2015 01:16

HookShot: Dec 26, 2005

Furnaceface posted:

Every time I get angry, frustrated or pissed off at the OLP I know I can turn to Christie Clark to make myself think "Well, it could be worse!".

Are there any active volcanoes in BC still? Maybe we can hope one erupts while she is flying over it to go see that great view in Kitimat or Fort St John.

Mt St Helens kind of dropped a bit of ash on the lower mainland.

I think Baker is technically still active but hasn't exploded in ages.

# ? Jun 24, 2015 01:17

ocrumsprug: Sep 23, 2010; by LITERALLY AN ADMIN

etalian posted:

lolling how people think more density and more housing units is somehow a panacea to the overpriced housing problem.

It is the Law of Supply and Demand, not the Theory or suggestion. You're not an economic criminal suggesting otherwise are you?

# ? Jun 24, 2015 01:19

F1DriverQuidenBerg: Jan 19, 2014

I park in the east village in calgary for work.

This was supposed to be the density driven solution, the whole area is a shithole worse than where I live. There's a homeless shelter two blocks away, some sort of addiction center right across the street from where I park and every day I drive by a huge crowd of homeless and other shady characters.

The ideal place to put in low priced high density right? Nope, they're putting in huge glass towers with rather elegant shapes that I assume are going to go for big money. The Developers have already started lobbying to move the homeless shelter.

There's no incentive for developers to put in anything other then luxury housing in any area in this housing bubble. It gets the best return and there's always somebody willing to stretch themselves financially to pay for it.

# ? Jun 24, 2015 01:25

ocrumsprug: Sep 23, 2010; by LITERALLY AN ADMIN

Helsing posted:

Well this is not exactly my field but I don't see how you can deny that a big part of the story in 2008 was the popping of the American real estate bubble. Sure there are some deeper structural reasons behind the inflation of that bubble - shadow banking, financialization, perhaps even a declining rate of profit (depending on how one define's profit) - but regardless of why it happened, there was clearly an asset bubble and the popping of that bubble clearly did a lot of damage to the economy. A lot of folks lost their jobs, other people lost the equity in their homes, etc.

As for current economic conditions I'm not an expert but it seems like ultra low interest rates world wide, low economic growth, and especially quantitative easing must be interfering with price discovery. How the hell could anyone be expected to know what an assets real value is in these conditions? I don't really watch global markets closely enough to have a truly informed opinion on this but what I do know about global markets is enough to make me very uneasy. The world economy looks very unstable at the moment. If you have any information to reassure me please share it.

Oh, definitely not disagreeing with you. The American real estate bubble, and the lending the fueled it was definitely where the GFC came from. (Everyone realizing that Iceland wasn't wearing any clothes a few months earlier probably wasn't unrelated since it was fueled by lending too.) My point was more this line from your quoted article.

quote:

Next year may see more gains across markets, but the bubble, bigger than the one before the 2008 recession, could pop in 2016.

Which implies that what happened to the market in 2008 was a market bubble popping, and not the wheels coming off the global economy. Maybe it was a bubble, and the collapse of credit and everyone's economy going to poo poo simultaneously was the external event that caused it to pop. That seems to be a bit of a stretch though.

# ? Jun 24, 2015 01:26

Kraftwerk: Aug 13, 2011; i do not have 10,000 bircoins, please stop asking

etalian posted:

lmao Bombardier was unable to land a single contract after the Paris air show this year:
http://www.bnn.ca/News/2015/6/19/Bombardier-leaves-Paris-Airshow-without-CSeries-orders.aspx

So glad I finally landed a new better paying job. Handing in my notice was very satisfying.

# ? Jun 24, 2015 01:42

blah_blah: Apr 15, 2006

The GFC wasn't really about lax lending but the immense web of poorly-understood securities that were built around those mortgages. Borrowers defaulting were responsible for it in the same way that you would be 'responsible' for blowing up my house if I bought a landmine, placed it under my house, and put the pressure sensor on your driveway.

# ? Jun 24, 2015 01:46

etalian: Mar 20, 2006

ocrumsprug posted:

It is the Law of Supply and Demand, not the Theory or suggestion. You're not an economic criminal suggesting otherwise are you?

It only works in things like German system since the government discourages home price speculation while at the same time making sure the housing supply doesn't
get constrained.

# ? Jun 24, 2015 02:00

ocrumsprug: Sep 23, 2010; by LITERALLY AN ADMIN

blah_blah posted:

The GFC wasn't really about lax lending but the immense web of poorly-understood securities that were built around those mortgages. Borrowers defaulting were responsible for it in the same way that you would be 'responsible' for blowing up my house if I bought a landmine, placed it under my house, and put the pressure sensor on your driveway.

Excellent point. The real estate bubble popping would not have been anywhere near as bad if billions of AAA securities, which turned out to be backed by underwater and broke home owners, weren't owned by all the financial institutions.

# ? Jun 24, 2015 02:34

PT6A: Jan 5, 2006; Public school teachers are callous dictators who won't lift a finger to stop children from peeing in my plane

blah_blah posted:

The GFC wasn't really about lax lending but the immense web of poorly-understood securities that were built around those mortgages. Borrowers defaulting were responsible for it in the same way that you would be 'responsible' for blowing up my house if I bought a landmine, placed it under my house, and put the pressure sensor on your driveway.

This is an excellent post, and I think even people who were/are aware of this sometimes forget about it.

# ? Jun 24, 2015 02:51

sauer kraut: Oct 2, 2004

etalian posted:

It only works in things like German system since the government discourages home price speculation while at the same time making sure the housing supply doesn't
get constrained.

Can we stop this nonsense please, try buying/renting a desirable location in Munich, Hamburg or Cologne and see how it goes.
Plenty of speculation, gentrification and constraint to go around and the only thing governments ever do is figuring out how to get the most tax out of it.
Maybe we (and others like Japan, France etc) are lacking the threadworthy exaggerations of the Anglosphere because we have a smaller, grown industrial nuclei all over the place. Reading this thread gives the impression that if you aren't living in one of the top 5 North American cities you might aswell kill yourself or get eaten by mosquitoes. You can live in any 100k pop city in (southern) Germany happily forever because there will be several medium sized companies that produce competitive machines, chemicals or whatnot.

e; I live in podunk nowhere population 7500, 2km from my apartment are these guys http://www.bomag.com/world/en/homepage.htm and 5km down the river are dudes that build the worlds best famous ship propellers or something https://en.wikipedia.org/wiki/Schottel_(company)

sauer kraut fucked around with this message at 03:15 on Jun 24, 2015

# ? Jun 24, 2015 02:56

I would blow Dane Cook: Dec 26, 2008

If you haven't yet, read The Big Short : Inside the Doomsday Machine by Michael Lewis, it's a great way to start understanding some of the madness of mortgage securitisation, and soon to be made into a film starring Selena Gomez!

# ? Jun 24, 2015 02:59

namaste friends: Sep 18, 2004; by Smythe

Also, read the vanity Fair article on aig. If you want to know about ground zero of the gfc that is it.

# ? Jun 24, 2015 03:29

etalian: Mar 20, 2006

sauer kraut posted:

Can we stop this nonsense please, try buying/renting a desirable location in Munich, Hamburg or Cologne and see how it goes.

http://www.economist.com/blogs/dailychart/2011/11/global-house-prices

home price index Canada, US and Germany:

home price vs rent

# ? Jun 24, 2015 03:31

Furnaceface: Oct 21, 2004

HookShot posted:

Mt St Helens kind of dropped a bit of ash on the lower mainland.

I think Baker is technically still active but hasn't exploded in ages.

Fault lines? Sink holes? Quick sand?

Im not picky.

# ? Jun 24, 2015 03:32

UnfortunateSexFart: May 18, 2008; ð» ððð« ð·ððð·
ð ð ð ð« ð®ð ð¾ð ð ð¡ððð

There is a massive fault line off the coast of Vancouver Island, there are about 20 active volcanoes in BC, and our new skytrain lines is running into trouble due to sinkholes forming every time they progress.

Best Place On Earth�

No quicksand though, as far as I know.

# ? Jun 24, 2015 03:38

HookShot: Dec 26, 2005

Longshot, but does anyone have a chart showing the average income of homeowners compared to the average price of homes? I'm not super picky about timeline but 1980-sometime in the last few years would be awesome.

# ? Jun 24, 2015 03:51

ductonius: Apr 9, 2007; I heard there's a cream for that...

Reverse Centaur posted:

No quicksand though, as far as I know.

Lulu Island near the south arm of the Fraser. Yard trailers where I work have to have pads under the legs or else they sink. If there's ever a strongish earthquake the commercial/light industrial area off Nelson Rd. is going to disappear.

# ? Jun 24, 2015 03:55

Femtosecond: Aug 2, 2003

Looping back to that National Post article does anyone want to comment on this quoted section? Why should the government meddle with the market?

quote:

While the high cost of housing is a concern for those who want to get into the market, no one seems to spare a thought for existing homeowners � pensioners, for example, or those nearing retirement, for whom the equity in their house is a kind of pension � who might prefer the value of their investment were not undermined in this way. It is not clear why it should be government policy to redistribute from all homeowners, rich or poor, to all home-buyers, poor or rich. Yet that would be the practical effect of any limitation on ownership or use, whether a ban on foreign ownership, a vacancy tax or other mechanism: not only a reduction in homeowner equity, but also reduced incentives to build new homes. Which can hardly help in the long run.

In the foreign investor context, it's clear to me that if the situation is largely a pure speculation play, with a great deal of complete absentee home owners, there's a good reason for government to intervene to discourage this. However, what if the situation in Vancouver is simply one of multi-millionaires throwing around cash on homes while in the process of getting their permanent resident status, and they fully intend on living here? A housing bubble super charged by outside money has real negatives for a lot of people, but I can't come up with a great deal of reasons that feel weighty enough for the government to do anything.

For example a great deal of people would be priced out of the market, but the counter argument, that one can just move to the suburbs or continue to rent, is not unreasonable.

# ? Jun 24, 2015 04:20

tagesschau: Sep 1, 2006; D&D: HASBARA SQUAD
THE SPEECH SUPPRESSOR

Remember: it's "antisemitic" to protest genocide as long as the targets are brown.

sauer kraut posted:

Can we stop this nonsense please, try buying/renting a desirable location in Munich, Hamburg or Cologne and see how it goes.

At least when compared to Toronto, Berlin has better jobs that pay more, and better apartments and dairy products that cost less.

# ? Jun 24, 2015 04:50

namaste friends: Sep 18, 2004; by Smythe

http://www.theglobeandmail.com/repo...rticle25085285/

quote:

Chinese envoy says lack of oversight behind Vancouver�s house-price crisis

The Chinese government�s top envoy in Vancouver says the city�s skyrocketing house prices and affordability crisis are due to a lack of regulation in the booming real estate market.

In a wide-ranging interview over tea at the Chinese consulate in Vancouver, Consul-General Liu Fei said local residents are blaming wealthy Chinese buyers for the city�s increasingly costly real estate but that the real blame lies with officials who monitor buyers, sellers and real estate developers.

�People are blaming the buyer. It�s the wrong direction,� said Ms. Liu, who has served in Vancouver since 2011. �I mean, the regulation here, nobody�s playing the role.�

Ms. Liu said this situation would not be allowed to occur in China, and pointed out that China�s government frequently wades into the country�s real estate market, and has strict policies with regard to affordable housing. She suggested a number of possible measures Vancouver could take to make housing more affordable, including the introduction of quotas to increase the number of affordable housing units within new buildings, greater oversight of real estate developers from the city and a tax or fee for overseas investors who want to buy luxury properties in the West Coast city.

�If there are not enough [affordable] houses, you can set up rules � saying, �Okay, we have to save 30 or 40 per cent of [the units] for those families who need housing,�� she said. �And we can put on luxury houses � a higher price for the overseas investors. We can do it this way. So everybody could enjoy [Vancouver].�

The diplomat�s remarks come as Vancouver grapples with a red-hot housing market that has become both a blessing and a curse. The soaring average price of a detached house in Vancouver reached $2.23-million in May, an increase of nearly 20 per cent from the same time last year. The real estate industry and homeowners have profited from the demand, which has been boosted by tens of thousands of mainland Chinese millionaires who settled in Vancouver through federal and provincial immigrant investor programs. Although there is a constant debate about the lack of available data on the subject, a large real estate firm in B.C., Macdonald Realty, estimated that in 2013 roughly one-third of the houses it sold in the city of Vancouver went to buyers with ties to mainland China.

But soaring prices have also pushed home ownership beyond the reach of many Vancouverites, who complain houses and apartments are bought up and left empty as investment hedges against volatility elsewhere on the Pacific Rim. The city is now home to a small protest movement led by middle-class professionals who united under the Twitter hashtag #donthave1million and say the city is becoming so unaffordable that its livability might be at risk. A recent online Angus Reid survey suggested 64 per cent of Vancouver residents thought foreign investors were largely to blame for high prices.

Vancouver Mayor Gregor Robertson has urged B.C. Premier Christy Clark to intervene in the market and called for a speculation tax on people who buy and sell real estate quickly to make a profit � although the province, which does not collect any data on the subject, has so far said it will not enact any measures.

When reached for comment, the provincial government referred to Ms. Clark�s reply to Mr. Robertson�s request for a speculation tax, in which she said the province was hesitant to introduce measures that could damage residents� home equity. She added a Ministry of Finance analysis suggested foreign buyers were not having a significant impact, and suggested the city lower its own civic fees and levies on condo units to reduce housing costs, as well as pursue �better land-use planning� to increase the housing supply.

Mr. Robertson�s suggestion followed years of the real estate industry playing down the role of foreign investment in rising prices, and came shortly after the idea was floated by prominent local real estate marketer Bob Rennie. Mr. Rennie, whose own firm, like other local real estate companies, has donated to Mr. Robertson�s Vision Vancouver party, has said that making the link between Chinese buyers and house prices was �bordering on racism.�

Although Ms. Liu said she doesn�t think Chinese buyers are entirely responsible for Vancouver�s house price increases, she said interest from overseas buyers logically pushes up local prices. She compared Vancouver real estate to West Coast spot prawns, which have soared in value because of demand from mainland China. But Ms. Liu said that the Chinese government would have no hesitation in stepping in and regulating price increases like this, unlike governments here.

�In this situation, the [Chinese] government would come out and say, �Now, we should put some quota on the houses for those with low-incomes,�� Ms. Liu said. �This is the regulation in China.�

In China, although there have long been concerns about the country�s debt-fuelled postrecession construction boom, the central government has enacted a number of regulations over the years aimed at lowering house prices. This includes an emphasis on public housing and housing affordability for low- and medium-income households, according to Tsinghua University scholar Zan Yang and Jie Chen of the Shanghai University of Finance and Economics.

A typical Chinese regulation from the state council in 2010 was called �A notification on resolutely curbing the soaring housing prices in some cities.� Other global jurisdictions � from Asian city-states such as Singapore and Hong Kong to Australia and Britain � have various policies, ranging from stamp taxes on real estate purchases by foreign residents to so-called mansion taxes on luxury purchases. Australia�s government, which bars foreigners from buying existing houses and limits overseas buyers to properties in development, said Chinese buyers purchased around $12-billion Australian ($11.4-billion) worth of real estate in 2014 � and recently said it would impose a new application fee.

Ms. Liu said there seems to be no agreement in Canada on what level of government wants to step forward and do something about the rising house prices in Vancouver.

�People are just complaining and complaining, but who is the one who can come out and play this kind of role to balance the market?� Ms. Liu asked. �Who is going to control, guide the developers? That�s the key question. Guide them � to keep the market stable. This is a local economic job. That�s what would be fair.�

yeah i mean it's not like china's got a problem with bubbles or anything

# ? Jun 24, 2015 05:42

Precambrian Video Games: Aug 19, 2002

Femtosecond posted:

Looping back to that National Post article does anyone want to comment on this quoted section? Why should the government meddle with the market?

In the foreign investor context, it's clear to me that if the situation is largely a pure speculation play, with a great deal of complete absentee home owners, there's a good reason for government to intervene to discourage this. However, what if the situation in Vancouver is simply one of multi-millionaires throwing around cash on homes while in the process of getting their permanent resident status, and they fully intend on living here? A housing bubble super charged by outside money has real negatives for a lot of people, but I can't come up with a great deal of reasons that feel weighty enough for the government to do anything.

For example a great deal of people would be priced out of the market, but the counter argument, that one can just move to the suburbs or continue to rent, is not unreasonable.

Yeah except the suburbs suck and renting is also getting more expensive, although I suppose that depends on the market. Toronto is building ridiculous quantities of condos but far fewer purpose-built rentals and renting condo units can be the worst of both worlds.

It's somewhat interesting to know what the main driver of Vancouver's ridiculous price growth is, whether foreign investors make a major contribution, whether they're just money laundering/parking their cash in a safe country/actually intending to profit/ever live in their homes. But does it really matter in the end if the result is unreasonable growth in housing costs? Only a lucky few get to cash out from selling their homes at the peak.

# ? Jun 24, 2015 06:20

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# ? May 23, 2024 14:01

Femtosecond: Aug 2, 2003

eXXon posted:

It's somewhat interesting to know what the main driver of Vancouver's ridiculous price growth is, whether foreign investors make a major contribution, whether they're just money laundering/parking their cash in a safe country/actually intending to profit/ever live in their homes. But does it really matter in the end if the result is unreasonable growth in housing costs? Only a lucky few get to cash out from selling their homes at the peak.

Whether investors are actually present or not I think would have a significant impact on the city in a number of areas, such as the street level vibrancy of certain neighbourhoods, and school enrolment. The 'absentee investor' scenario is the only one I could see irritating a broad enough selection of people to awaken a government into any sort of action to stem foreign investment.

# ? Jun 24, 2015 06:43

The Something Awful Forums > Discussion > Debate & Discussion > Canada Housing/Debt: Trust me, I'm a landlord.

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