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.

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.

namaste faggots posted:

http://www.theglobeandmail.com/news...rticle30498453/


i don't really give a gently caress if people want to jump into the fuckin condo pool of poo poo

bring it on. i can't wait to see the waves of comments from 30 thousandaires when this motherfucker burns down and they're all underwater

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."

quote:

Justin Trudeau to get sobering view of Vancouver’s housing market

Prime Minister Justin Trudeau is scheduled to meet with a round table of experts on Vancouver’s housing affordability crisis on Friday, just as new data are released showing the extreme nature of the city’s escalating housing problem.

Planner and analyst Andy Yan, who will attend the meeting, has released a comprehensive set of maps that show the rapid rise of assessed house prices over the past decade. Strikingly, his data show prices have spiked considerably within the past two years.

At least one academic at the gathering plans to make the case that Vancouver’s sudden escalation of house prices is timed perfectly with the mass exodus money from China. None of the academics interviewed was given any specifics as to what would be on the agenda, other than a general discussion of housing, so they plan to bring their wish list of recommendations to the table.

Josh Gordon, an assistant professor in public policy at Simon Fraser University, said in an interview on Thursday that he plans to make the case that the inflow of Chinese money has pushed Vancouver home prices out of range for the average person.

For example, in 2013, online real estate portal Juwai facilitated $5-billion (U.S.) worth of global real estate deals for its Chinese clients. In 2014, that number soared to $52-billion.

Prof. Gordon argued that that corresponds with a major increase in the number of houses assessed at more than $1-million (Canadian) in Vancouver.

The number of houses priced below $1-million dropped from 41 per cent in assessment year 2014 to 9 per cent by 2016, according to Mr. Yan’s data. Prior to the exodus of Chinese money, assessment figures show the market was levelling off. “Then all of a sudden it explodes,” Prof. Gordon said. “It shows so clearly what is going on is being driven by that kind of a factor. And we do have pretty good data on flows of capital out of China.”

The province announced in its February budget that it will begin gathering data on foreign investment in British Columbia’s real estate market, requiring all new purchases to list the buyer’s nationality. However, Finance Minister Mike de Jong has played down the idea that the role of foreign buyers in Vancouver’s affordability crisis is significant.

But Prof. Gordon said there is also solid data on the flow of Chinese money into Australia, where house prices have also soared. He questioned why Vancouver would be any different.

“We are a very similar target – if not a more enticing target – because we have such low property taxes, and we make such limited effort to track the nature of money and enforce money-laundering rules.”

Mr. Gordon said he also planned to make it clear to the Prime Minister that the high-end market is not operating in isolation to the rest of the market. It’s a common argument put forward by the real estate industry that foreign wealth is only driving luxury property prices.

Mr. Yan’s maps clearly illustrate the ripple effect spreading from the more affluent west side of the city to the east. The average price for a detached house that sold in the city of Vancouver is $2.96-million, according to recent figures supplied by Landcor. That’s a 19.8-per-cent increase since January. The average price of a condo is $719,434, a 7.88-per-cent increase in the same period. Throughout the region, prices have risen 20 to 35 per cent over all in the last year.

“The point I want to make in the public debate is that a lot of the other things we are seeing right now – including speculation, fear of missing out, loans from the bank of Mom and Dad, all these different things that we are talking about in terms of driving prices – these are all in a sense knock-on effects of foreign money,” Prof. Gordon said.

“They are not independent causal factors; they are occurring as a result and in reaction to the foreign money that is flowing into the city.”

Mr. Yan said he will emphasize with participants that they need to look at demand. “Clearly ,global capital is part of this,” said the acting director of Simon Fraser’s City Program. With these patterns, we have price and the supply, but we need to look at demand. And in terms of housing, we need to ask, ‘What are the kinds of demand we want to support? And what are the behaviours we want to discourage?”

University of British Columbia geography professor David Ley, who’s studied Asian global capital flows for 16 years, said he will suggest to Mr. Trudeau that Ottawa attempt to cool off the top end by taxing it, which would quell the entire market. He said he will also suggest a tax on foreign property purchases. “It would be a bolder move, and I think there’s quite an appetite for that. But that would be a bigger ask, and a complicated ask, as you can’t always easily tell what is a foreign purchase.”

He said he’ll also ask for regulation of the real estate sector, including measures against money laundering. Indebtedness tied to high mortgages is another one of Mr. Ley’s concerns he’d like to discuss with the Prime Minister.

“I’m going to raise the issue that we need to protect what we already have – the housing from the ’70s and ’80s, such as the government-subsidized rentals, whose subsidies are expiring and, not surprisingly, are in need of repair. I think it’s an easier task to conserve what you already have,” he said.

Jean-Yves Duclos, the minister responsible for housing, will follow up the Prime Minister’s round table with more in-depth meetings on June 26 and 27, according to his communications director, Mathieu Filion.

Vancouver and Toronto prices have also recently caused the Bank of Canada and major banks some concern. Bank of Canada Governor Stephen Poloz and economists have recently cautioned consumers that rising prices are unsustainable.

Prof. Gordon said several major banks have contacted him to discuss an academic paper he released last month about foreign buying in Vancouver.

“It’s incredible, really,” he said. “We’re numb to it now, but if you think about how much income you need to have a $1-million house, you realize how crazy things are.”

Prof. Gordon said he plans to tell Mr. Trudeau that there is no time to waste and that immediate action needs to be taken.

“They need to start cracking down on money laundering, which is within their jurisdiction, and they need to end the Quebec Immigration Investor program, and seriously look at taxation of foreign investors.”

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.

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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.

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

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.

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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.

Freakazoid_ posted:

if house bubble how come not burst??

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.

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.

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?

PT6A posted:

the foreign element, which I think is necessary but not sufficient to cause the current bubble.

McGavin posted:

New study on exactly how hosed 25-34 year olds in Vancouver are.

TLDR: HAHAHAHAHAHAHAHAHAHAHAHA HOLY poo poo YOU'RE hosed.

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?

McGavin posted:

New study on exactly how hosed 25-34 year olds in Vancouver are.

TLDR: HAHAHAHAHAHAHAHAHAHAHAHA HOLY poo poo YOU'RE hosed.

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

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?

quaint bucket posted:

Lost one kid and the cat is having sex with the dog.

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?

namaste faggots posted:

http://thetyee.ca/Opinion/2016/06/17/Lower-Mainland-Renters-Rage/


there seems to be no shortage of single moms in vancouver why is that

mastershakeman posted:

Their husbands are still in China smuggling money out

McGavin posted:

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?

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.

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™.

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.

(I wonder if Barrie residents consider Toronto emigrees to be foreign money.)

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...

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?

Femtosecond posted:

In contrast new policy around foreign investment is something the government can do, as governments around the world have done.

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?

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.

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.