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tagesschau posted:There's not really any evidence that foreign investment is having a significant effect on prices outside the very high end. You can blame it at least partially for making a $2 million home $4 million; however, what should be a $200,000 home is $450,000 due not to suitcases of cash from abroad, but Canadians borrowing anything and everything to own property and avoid that FOMO. Canadians FOMO is hugely important as they're the majority of the buyers. The effect of foreign investment is that a marginal amount of buyers is edging the price higher and Canadians will pay anything due to FOMO. from the article I posted: quote:“While many downplay this factor ('it’s only X% of the buyers!'), Economics 101 will tell you that the marginal buyer sets the price; and, if you introduce a wave of new buyers on an already tight market, prices will soon reach for the sky as the demand curve shifts even slightly to the right,” Porter and Kavcic write. If you're on a street where some 20 houses are vaguely the same and one sells for $100k over asking, when all those other houses go to sell, they're going to aim their price targets at what the last highest house sold at. Additionally the affects of purchases on the high end ripple outward because a seller still has to buy somewhere else. Early on you saw that in the $1 million dollar house line moving steadily eastward across Vancouver, until where we are now where it has vanished as West Side sellers buy in the East. One of the more dramatic examples of this is in the Sunshine Coast [url="http://www.timescolonist.com/news/local/buying-wave-sparks-bidding-battles-for-victoria-real-estate-1.2188107"and Victoria[/url], where prices have spiked upward and people are paying way over asking. Femtosecond fucked around with this message at 16:57 on Jun 17, 2016 |
# ? Jun 17, 2016 16:40 |
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# ? Jun 7, 2024 09:03 |
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namaste faggots posted:http://www.theglobeandmail.com/news...rticle30498453/ quote:From a single mother of four: "This is truly affecting people like myself who make a decent enough income but still at the low end on middle class scale. And because of my income I don't qualify for help... I don't make enough to pay egregious rents and still pay my bills and feed my kids." Why do people believe they are "Middle Class" when they can become homeless because they don't make enough money? You are literally the definition of Lower Class, sure you may not be aboriginal or another colour but you survive off of money from the government.
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# ? Jun 17, 2016 16:52 |
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If you're not actually living on the street you're middle class. Also if your yacht doesn't have a helicopter on it you're just upper middle class. 99% of canadians are middle class, and we have the strongest middle class in the world!
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# ? Jun 17, 2016 16:55 |
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quote:Justin Trudeau to get sobering view of Vancouver’s housing market Save us Justin! /s One of the things I'd want for him is his help in ending the Quebec Investor Immigration program. It's abundantly clear that all those millionaires end up in BC/Toronto. Femtosecond fucked around with this message at 17:05 on Jun 17, 2016 |
# ? Jun 17, 2016 17:01 |
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the horse is out of the barn, it's way too loving late to close the door even if foreign investment sparked this bubble (and it unquestionably did) it's now being driven by hordes of buyers who think it's totally ok to get their downpayment in the grey market (borrowing from family or shady unregulated lenders) and then spend 70% of their net income on debt service the only way to cool the market now is stricter lender regulations. require larger downpayments and require borrowers show provenance of that money. if it's a 'gift' from their parents that corresponds to those parents taking out a mortgage on their own home gently caress that borrower. if it just mysteriously showed up as a cashier's cheque one day, whelp
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# ? Jun 17, 2016 17:36 |
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Femtosecond posted:If you're on a street where some 20 houses are vaguely the same and one sells for $100k over asking, when all those other houses go to sell, they're going to aim their price targets at what the last highest house sold at. And so the proximate cause is not foreign investors, but the willingness of banks to lend people three or four times what they can actually afford to borrow. There's no ripple effect without cheap and overly easy credit.
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# ? Jun 17, 2016 17:39 |
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a b o l i s h c a p g a i n s t a x e x e m p t i o n (▔▀ ‿ ▔▀ )ლ ▂▂⌇
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# ? Jun 17, 2016 18:25 |
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namaste faggots posted:a this too
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# ? Jun 17, 2016 18:25 |
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Femtosecond posted:One of the things I'd want for him is his help in ending the Quebec Investor Immigration program. It's abundantly clear that all those millionaires end up in BC/Toronto. Immigration is a benefit to society. If wealthy people want to live and spend money here, then why not? Policy needs to capture some of this wealth though... the talent deficit posted:the only way to cool the market now is stricter lender regulations. require larger downpayments and require borrowers show provenance of that money. if it's a 'gift' from their parents that corresponds to those parents taking out a mortgage on their own home gently caress that borrower. if it just mysteriously showed up as a cashier's cheque one day, whelp They could crank up the various tax rates. Property tax, property transfer tax, abolishing the capital gains exemption, etc. If people are making 15% a year on housing appreciating in value, tax away 10% and it becomes a lot less lucrative for investors. Suddenly, housing is about a place to live again, your policy doesn't select for people who can ask their parents for an even larger down payment and government has a lot more money to spend on regular folks. EDIT: ^^^ word
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# ? Jun 17, 2016 18:26 |
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I'm 100% ok letting people just buy their way into canada, but it's got to cost them. Like they have to actually PAY to get in, not just let the government hold onto their money for a little bit then give it back. Then absolutely fleece them with taxes and fees. We could be making a huge profit off these people rather than essentially subsidizing them.
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# ? Jun 17, 2016 18:28 |
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Baronjutter posted:I'm 100% ok letting people just buy their way into canada, but it's got to cost them. Like they have to actually PAY to get in, not just let the government hold onto their money for a little bit then give it back. Then absolutely fleece them with taxes and fees. We could be making a huge profit off these people rather than essentially subsidizing them. Even universities have figured this one out.
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# ? Jun 17, 2016 18:33 |
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if house bubble how come not burst??
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# ? Jun 17, 2016 18:39 |
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namaste faggots posted:a Can you set this to a Taylor Swift song instead to make it easier to understand for my generation?
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# ? Jun 17, 2016 18:40 |
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tagesschau posted:And so the proximate cause is not foreign investors, but the willingness of banks to lend people three or four times what they can actually afford to borrow. There's no ripple effect without cheap and overly easy credit. Not sure that's fully reasonable... people don't always get the biggest mortgage possible. Not everyone who can buy looks to buy. But skyrocketing prices & FOMO will make more people jump to it. Or get bigger loans from Mom. Things would be somewhat less bad if lending were somewhat tighter but I don't think it'd fundamentally change much here. The ripple effect might just be smaller. It would surely still be there.
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# ? Jun 17, 2016 18:42 |
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Now don't get me wrong, I am sure that most people have done their homework and reached a consensus that there must be a ceiling for these housing markets. But, what is there is no limit? What if housing stays hot, forever?
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# ? Jun 17, 2016 18:44 |
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Freakazoid_ posted:if house bubble how come not burst?? if market irrational how come i still solvent?? Vehementi posted:Not sure that's fully reasonable... people don't always get the biggest mortgage possible. Not everyone who can buy looks to buy. But skyrocketing prices & FOMO will make more people jump to it. Or get bigger loans from Mom. Things would be somewhat less bad if lending were somewhat tighter but I don't think it'd fundamentally change much here. The ripple effect might just be smaller. It would surely still be there. People were totally sure Miami real estate prices were going up well over inflation because it's an international financial hub, everyone wants to live there, they aren't making any more land, foreign investors, etc. The only reasons not to learn from the example immediately to the south boil down to either not understanding it or not wanting to.
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# ? Jun 17, 2016 18:48 |
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New study on exactly how hosed 25-34 year olds in Vancouver are. TLDR: HAHAHAHAHAHAHAHAHAHAHAHA HOLY poo poo YOU'RE hosed. quote:As housing prices doubled across the country since 1976, and tripled in Metro Vancouver, incomes fell for younger Canadians. After adjusting for inflation, full-time earnings for a typical Canadian age 25-34 have fallen over $4,000 compared to 1976-1980 (Kershaw 2015). In BC, the drop in earnings is worse than any other province. Full-time earnings are down over $9,000 for a 25 to 34 year old compared to 1976-1980. Earnings in Metro Vancouver have tracked the provincial pattern.4 These findings echo research by Moos (2014a) who shows that 25 to 34 year olds in Canada’s big cities like Vancouver and Montreal have lost thousands of dollars of earnings compared to Canadians of the same age in 1981 even after controlling for education, occupation, immigration, etc.
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# ? Jun 17, 2016 18:49 |
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Chair In A Basket posted:Now don't get me wrong, I am sure that most people have done their homework and reached a consensus that there must be a ceiling for these housing markets. But, what is there is no limit? What if housing stays hot, forever? Children will live with their parents until they die, then take over the house like a hermit crab.
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# ? Jun 17, 2016 18:52 |
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PT6A posted:the foreign element, which I think is necessary but not sufficient to cause the current bubble. I think it's pretty likely that we would have seen this bubble with almost exactly the same shape without foreign money. Taking 15% of the transactions off the table doesn't prevent this. Are people even mooting Yellow Fiscal Peril for the Toronto bubble?
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# ? Jun 17, 2016 18:57 |
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McGavin posted:New study on exactly how hosed 25-34 year olds in Vancouver are. Time to pull up your bootstraps kids.
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# ? Jun 17, 2016 19:11 |
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A friend's friend is selling a place in Vaughn, and received a call from a foreign buyer who wanted to know if they would entertain a longer closing period for the house, to up to 180 days. Two things, currency restrictions are very real atm, and chinese money is moving north to Vaughn
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# ? Jun 17, 2016 19:12 |
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Subjunctive posted:I think it's pretty likely that we would have seen this bubble with almost exactly the same shape without foreign money. Taking 15% of the transactions off the table doesn't prevent this. Are people even mooting Yellow Fiscal Peril for the Toronto bubble? i'm not so sure. the lending environment is definitely dangerous, but i think you need a critical mass of 'irrational' [1] buyers to spark the fear of missing out that seems to be driving things now [1] the chinese buyers are probably the most rational actors in this whole game. most of them are looking at potentially losing everything if they leave their money in china so they don't really care if the house they buy for 4 mil today is only worth 2 mil next year
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# ? Jun 17, 2016 19:53 |
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McGavin posted:New study on exactly how hosed 25-34 year olds in Vancouver are. Lost one kid and the cat is having sex with the dog.
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# ? Jun 17, 2016 20:01 |
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the talent deficit posted:i'm not so sure. the lending environment is definitely dangerous, but i think you need a critical mass of 'irrational' [1] buyers to spark the fear of missing out that seems to be driving things now Those buyers have never been hard to find in desirable areas. Do you think that foreign money was necessary for Toronto as well? For the Bay Area or Seattle?
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# ? Jun 17, 2016 20:02 |
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Subjunctive posted:Those buyers have never been hard to find in desirable areas. Do you think that foreign money was necessary for Toronto as well? For the Bay Area or Seattle? Vancouver is not Toronto, the Bay Area, or Seattle. The local wages in Vancouver are not sufficient to support the ridiculous rise in housing prices. There aren't any loving Hootsuite millionaires willing to plop down fat stacks of tech cash to live in The Greatest City on Earth™. quaint bucket posted:Lost one kid and the cat is having sex with the dog. The price you pay to live in The Greatest City on Earth™. McGavin fucked around with this message at 20:10 on Jun 17, 2016 |
# ? Jun 17, 2016 20:04 |
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Subjunctive posted:Those buyers have never been hard to find in desirable areas. Do you think that foreign money was necessary for Toronto as well? For the Bay Area or Seattle? Hmm, what do all three of those areas have that Vancouver does not?
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# ? Jun 17, 2016 20:08 |
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namaste faggots posted:http://thetyee.ca/Opinion/2016/06/17/Lower-Mainland-Renters-Rage/ Their husbands are still in China smuggling money out
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# ? Jun 17, 2016 20:17 |
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mastershakeman posted:Their husbands are still in China smuggling money out
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# ? Jun 17, 2016 20:18 |
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That's exactly what CI was alluding to
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# ? Jun 17, 2016 20:19 |
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Subjunctive posted:Those buyers have never been hard to find in desirable areas. Do you think that foreign money was necessary for Toronto as well? For the Bay Area or Seattle? as others already pointed out, there are jobs in those cities that pay more than $40k
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# ? Jun 17, 2016 20:25 |
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tagesschau posted:And so the proximate cause is not foreign investors, but the willingness of banks to lend people three or four times what they can actually afford to borrow. There's no ripple effect without cheap and overly easy credit. Right. Again I'm not disagreeing that easy credit and FOMO is not the primary driver of price increases, but I'm trying to ground this discussion in the reality of what the government can act on with new policy. I'm not a banker so maybe I'm wrong here but I don't know how the government goes to the banks and asks them to stop making "bad" loans. I'm not sure how the government prevents the sort of intergenerational transfer of wealth where parents gift their kids $100k+ for a down payment. Maybe there are some tools with CMHC that can be used, though the government would have to be careful in that what Vancouver and Toronto is experiencing is a local problem. Housing is not so hot elsewhere. In contrast new policy around foreign investment is something the government can do, as governments around the world have done.
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# ? Jun 17, 2016 20:29 |
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McGavin posted:Vancouver is not Toronto, the Bay Area, or Seattle. The local wages in Vancouver are not sufficient to support the ridiculous rise in housing prices. There aren't any loving Hootsuite millionaires willing to plop down fat stacks of tech cash to live in The Greatest City on Earth™. Fair enough, but the point is that people are buying houses they can't afford. If they could afford them we wouldn't consider it a bubble, that's why people keep posting graphs of real wages that look like a corpse's cardiogram. The vast majority of people buying for inflated prices are residents -- they're stretching beyond their means to bank on the Forever Rise, and it's ill-advised, but they're buying. They're mostly competing with each other. I haven't seen anything showing that the snowball was kicked off by foreign purchasers, but maybe it's farther upthread than I've read. (I wonder if Barrie residents consider Toronto emigrees to be foreign money.)
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# ? Jun 17, 2016 20:31 |
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Subjunctive posted:Fair enough, but the point is that people are buying houses they can't afford. If they could afford them we wouldn't consider it a bubble, that's why people keep posting graphs of real wages that look like a corpse's cardiogram. The vast majority of people buying for inflated prices are residents -- they're stretching beyond their means to bank on the Forever Rise, and it's ill-advised, but they're buying. They're mostly competing with each other. I haven't seen anything showing that the snowball was kicked off by foreign purchasers, but maybe it's farther upthread than I've read. it's an open secret that vancouver realtors are marketing vancouver property in china as a 'safe' investment for those worried about china's unstable economy. did you miss the new sun realty scandal?
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# ? Jun 17, 2016 20:34 |
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yippee cahier posted:Immigration is a benefit to society. If wealthy people want to live and spend money here, then why not? Policy needs to capture some of this wealth though... In general immigration is good for Canada but these investor immigration schemes have not shown to benefit many. There was a study for example that showed that refugees were paying more income tax than millionaire migrants that had entered through the investor stream. A Conservative cabinet minister said on Twitter recently that he regretted they didn't close down the program sooner. With the Quebec program the Province is making money selling the passports but the newcomers go to BC and Ontario and neither province sees any of this money. Changes to limit the capital gains on selling a house would be fantastic but this would be an incredibly dramatic change.
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# ? Jun 17, 2016 20:42 |
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Subjunctive posted:I think it's pretty likely that we would have seen this bubble with almost exactly the same shape without foreign money. Taking 15% of the transactions off the table doesn't prevent this. Are people even mooting Yellow Fiscal Peril for the Toronto bubble? But it's the foreign price-insensitive speculators that are driving the marginal cost up, is it not? If those "15% of transactions" are the crazy people, then that is a fundamental factor.
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# ? Jun 17, 2016 20:43 |
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I think one of the fastest ways to slow things down, if not pop the bubble, is for the CMHC and the federal government to no longer insure any mortgage over 500k, regardless of down payment, and to explicitly repudiate (with legislation) backstopping any proportion of losses that private mortgage insurers or banks take. As a fun benefit this would also apply for renewals too!
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# ? Jun 17, 2016 20:46 |
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Quebec using the Immigrant Investor Program to gently caress over the rest of Canada is the most Quebec thing I've ever heard. They get to pretend to be open and not xenophobic, they get all the money, and the rest of the provinces get screwed.
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# ? Jun 17, 2016 20:47 |
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Femtosecond posted:In contrast new policy around foreign investment is something the government can do, as governments around the world have done. Unfortunately, the only effective policy involves time travel and nipping the bubble in the bud ten years ago instead of going for pedal-to-the-medal 40-year amortizations with 5% down. The pain is coming; it's a question of whether it will be intense and brief (house prices reverting to some sane multiple of income, a decent chunk of people lose money what they were sure was a safe investment) or a long, slow grind (house prices aren't allowed to fall, Canadian workers will demand too much money to pay for those still-overpriced homes, demand for Canadian labor drops because the Americans and Germans will do better work for less money, Canadian economy sputters along aimlessly for decades). Pick your poison.
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# ? Jun 17, 2016 20:59 |
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the talent deficit posted:it's an open secret that vancouver realtors are marketing vancouver property in china as a 'safe' investment for those worried about china's unstable economy. did you miss the new sun realty scandal? I know they are now, I just didn't know that they were doing that before the bubble started, kicking off the bubble. Vehementi posted:But it's the foreign price-insensitive speculators that are driving the marginal cost up, is it not? If those "15% of transactions" are the crazy people, then that is a fundamental factor. The marginal cost argument is interesting, but if it's foreign money driving marginal price up, then blocking foreign investments should kill the bubble -- or at least plateau it. I haven't heard anyone make the argument that foreign money is the only factor pushing marginal price up.
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# ? Jun 17, 2016 21:07 |
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# ? Jun 7, 2024 09:03 |
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Vehementi posted:But it's the foreign price-insensitive speculators that are driving the marginal cost up, is it not? If those "15% of transactions" are the crazy people, then that is a fundamental factor. Vancouver's big problem is that the prices are not grounded in the local reality and local incomes. Transactions by those with incomes independent of the local situation is I think a major contributing reason for this. If these transactions independent of local income never occured I think you'd see prices that more closely reflect local incomes. I definitely still think we would have seen significant price increases due to demographic changes, and the ability for people to bid high (low interest rates) but prices may not have climbed to the level where a runaway speculative bubble was created. A few pages ago I posted a story about a teardown that is being sold every few months. That is not FOMO. FOMO is people overpaying for a detached house in Langley because they badly want a detached house. I don't know how you explain a teardown being flipped every few months without considering money laundering activity. I don't think we'd see activity like this without foreign investment being involved. Femtosecond fucked around with this message at 21:10 on Jun 17, 2016 |
# ? Jun 17, 2016 21:08 |