Vancouver loves hot asian money.
There’s an article in the Globe and Mail that asks that classic question “Is Vancouver in a real estate bubble?“. Well.. actually it doesn’t really ask that, it’s just titled that. What it really explores is Realtor anecdotes about wealthy foreign buyers.
If “buyers from China” answers the “who” question about Vancouver’s unique real-estate market, the follow-up question—“Where is this leading?”—is harder to answer. The torrid affair between eastern Asia and Vancouver real estate, now in its third decade, is actually a love triangle from which each party derives very different things. When wealthy Chinese immigrants buy property in Vancouver—and they utterly dominate the top end of the market—they’re actually buying a form of insurance. What the federal and provincial governments get out of these newly minted Canadians turns out to be a modern form of the infamous head tax that was imposed on Chinese migrants in the 19th century. And what Vancouver gets is an economy that boasts a lot of froth, and not much substance. From all three angles, it feels like a relationship that is built not so much on Commitment as on enjoying the good times while they last.
Ah yes, the wealthy foreign buyer and their almighty impact on the market. I guess we’ll just have to trust the Realtor anecdotes, since that’s all journalists seem to rely on when writing these articles.
.. Gosh, wouldn’t it be nice if there was some actual data on foreign buyers? Wouldn’t it be really great if someone sat down and put those numbers into perspective?
Oh! Look! Somebody has.
The article outlines a typical scenario in which, “one of the parents, usually the wife, moves to Canada with the children while the husband stays in Asia, coming for visits when he can.” So the number of total investor immigrants represents 2500 households at best! When this number is compared against the total annual sales volume for the Greater Vancouver area, we find that it accounts for at best 7% of total sales! That puts things in a whole different light, doesn’t it? As it turns out, rich Asian investors undoubtedly account for less than 10% of the total sales volume, and I would suggest that it is likely significantly less than that given the propensity of many Asian cultures to live in extended family (multigenerational) households.
Now given that the entire article is premised on the argument that there are lots of rich Chinese investors coming to Vancouver to buy extremely expensive houses, the above data calls this foundational assertion into question. In fact it leaves it in a smoldering pile.
Go read the full post over at the Financial Insights blog.
November 24th, 2010 at 9:19 pm 1
One thing I always wondered about this situation where the family lives in Vancouver and the man lives in Hong Kong is what tax they are paying. According to Revenue Canada, if the family is in Canada the man (living in HK or anywhere else outside Canada for that matter) is still subject to tax as a Canadian resident, i.e. on his worldwide income. It would be interesting to know how many are actually paying tax this way or evading tax here by not paying. I think Revenue Canada hasn't really enforced this but if(when)they do, it will also be a contributing factor to the downfall of Vancouver real estate.
Like or Dislike:
0 
0
November 24th, 2010 at 9:27 pm 2
Yikes! When I first read the title of this post I thought that it was "Vancouver loves hot Asian mommy!" (My Freudian slip is definitely showing.)
I just read through yesterday's comments thread and it was a treat not having to wade through the muck produced by a couple of our more mentally-unhinged denizens.
Like or Dislike:
0 
0
November 24th, 2010 at 10:14 pm 3
Londonerno@Londonernow:
I doubt Revenue Canada has the resources to enforce this. It isn't just absentee Chinese, I know of locals who live in large homes but play penny stocks through off-shore companies and banks and have made bank-roll this year and yet pay very little tax.
In fact it would be very easy for Revenue Canada. They would just need to find out where a person lives. If they live in an $X Million home (rented or owned) then they must have at least $Y in income to support that and wil be assessed that much.
It would then be up to the person assessed to show how they can live at that level with a lower income.
BTW -7% marginal increase in demand is a lot, particularly in a tight market like this. It can make the difference between a correction and stagnation.
Like or Dislike:
0 
0
November 24th, 2010 at 10:44 pm 4
Of course we should not under-etimate the economic impact of these purchases. Bringing $2 M cash for a home purchase has lots of knock-on effects. Living at a high standard also does and is probably a net gain even with-out the tax revenues, unless the elderly parents are brought along and deposited on our creaking health system.
Like or Dislike:
0 
0
November 25th, 2010 at 12:00 am 5
Because the market prices are set at the margins, these buyers do have a positive effect on the prices of some specific sub-markets ie. Dunbar, Pt. Grey etc. To extrapolate this effect to the rest of the Greater Vancouver market would be really really stretching it.
Like or Dislike:
0 
0
November 25th, 2010 at 12:35 am 6
@ckung: "To extrapolate this effect to the rest of the Greater Vancouver market would be really really stretching it."
+1. Extrapolating this effect to the rest of the province is even more of a stretch.
Like or Dislike:
0 
0
November 25th, 2010 at 12:45 am 7
http://fr.news.yahoo.com/73/20101125/twl-irlande-…
This one is in French. Sorry.
It says that some economists used to brag about the Irish model, and how strong the fundamentals were in Ireland. People became convinced that it was normal that Dublin real estate was as expansive as New York (sounds familiar?).
But the Irish miracle was only the product of inflated real estate, excessive consumption and fiscal dumping.
Like or Dislike:
0 
0
November 25th, 2010 at 12:51 am 8
"Oh! Look! Somebody has" link doesn't seem to work
?
Like or Dislike:
0 
0
November 25th, 2010 at 12:58 am 9
The link worked for me…
In the Financial Post:
Q When you look at Canada right now, what keeps you awake at night?
A I think the [major concern] is around indebtedness of the consumer and the potential inflation of certain asset classes, like real estate, which could be in a bubble but not now. If because of currency interventions by other countries the Canadian dollar's too strong, then rates in Canada would stay low because of [the central bank's] inflation targeting policy. Then you have the potential for a housing bubble. I don't think that has to happen. I agree with the consensus that it will probably be a more modest correction. I think the Bank of Canada and other regulators have tools to put policies in place where they could limit the amount of lending the banks could do. But that requires a lot of judgment and policymakers getting a lot of things right.
Read more: http://www.financialpost.com/news/Beware+euro+con…
Like or Dislike:
0 
0
November 25th, 2010 at 1:12 am 10
Spanish Real Estate:
Property values will fall 20% over the next five years, Rodriguez y Rodriguez de Acuna estimates. Most of the declines will come in 2011, he said. Since the Spanish market’s peak in April 2007, home prices have dropped 22.5%, according to a survey by real-estate website Fotocasa.es and IESE Business School.
Under the changes introduced by the Bank of Spain in September, lenders must take account of a drop in value of at least 30% if they keep the assets for more than two years. They must also make provisions for bad loans after 12 months, rather than as long as 72 months.
Read more: http://www.financialpost.com/news/Foreclosed+home…
Like or Dislike:
0 
0
November 25th, 2010 at 1:21 am 11
Today is another glorious day to remind the home owners among us just what a priviliage it is to own a house in Vancouver, best city in the best place on Earth.
I woke up this morning to a nice fresh pile of 2 inches of snow. You know what this means? If means us, priviliage landed gentry, who didn't get up an hour earlier than usual to shovel our sidewalk (new bylaw), clear the driveway, put on sand/salt if we didn't do it last night (isn't that really bad for the environmen?), get rid of snow from the car, and budget extra travel time will now be late.
Off course, if we owned rental house then we would have to shovel their sidewalk too before 10AM since those damn lazy renters would never bother to do it.
But this is all part of the ownership premium! I mean what's better to come home from a hard day at work with a long exhausting drive because of all the other irresponsible bad drivers who can't drive properly in snow to spend more time shovelling snow and sand/salt the sidewalk, driveway, etc? It's all worth it because it's fun, it's part of ownership pride, part of being responsible and adult, and more important a yard where the family can build a snowman and have a snow fight!
/ yes a lot of is sacarsm.
Like or Dislike:
0 
0
November 25th, 2010 at 1:51 am 12
@Frank:
"In fact it would be very easy for Revenue Canada. They would just need to find out where a person lives. If they live in an $X Million home (rented or owned) then they must have at least $Y in income to support that and wil be assessed that much."
I don't think it's that simple.
Like or Dislike:
0 
0
November 25th, 2010 at 2:07 am 13
Here's a question… these rich foreign buyers – and I'm talking about the real ones, however many or few they may be – are they buying houses cash, or are they getting CMHC backed mortgages and putting like 5% down?
If they're paying cash, I have no problem whatsoever with them buying as much of Vancouver as they can stomach. But if they're speculating and getting me to cover their losses through my taxes, I'll be extremely pissed.
So which is it? All cash, or my cash?
Like or Dislike:
0 
0
November 25th, 2010 at 2:09 am 14
@VHB
Regarding your Interest Rates post "In the Forum"
I agree the backup in rates is quite strong but I don't think its permanent or that mortgage rates will rise substantially.
Reasons.
1. This backup seems more to do with speculation than fundamentals. The major action is in the belly of the curve (7-10 years) rather than the long end. My thesis is that this is a buy the rumour sell the news thing as there was a huge drop in rates after Bernanke's Jackson hole speech – this is just the speculation coming off as the realization he may not be able to do much more sinks in.
2. Inflation as measured by 30 year – TIPS isn't moving (its flat) so this indicates its not inflation expectations pushing rates.
Cheers.
Like or Dislike:
0 
0
November 25th, 2010 at 2:22 am 15
@painted turtle:
As O'Toole points out in "Ship of Fools", the Irish miracle was for real during the 90's. There was tremendous growth in industries such as computers and pharmaceuticals, and needed improvements to the physical and social infrastructure. It was post-2000 that the economy was taken over by RE and financial speculation. Just like in the US.
And just like in "The best place on earth".
Like or Dislike:
0 
0
November 25th, 2010 at 2:31 am 16
@MrBear:
Offshore buyers are not eligible for CMHC insurance because CMHC would have little effective recourse against them upon foreclosure. Nor do I think the banks would be too eager to lend to them, although they can if the buyer puts 20% down. It appears that there are lenders willing to finance offshore buyers with 35% down:
http://www.mortgageforless.com/new-to-canada-offs…
Like or Dislike:
0 
0
November 25th, 2010 at 2:41 am 17
How is it possible for the "average" Canadian working in our high tax environment to compete with someone coming from a low tax and low regulatory environment? If I got to keep most of my gross pay I could buy an expensive house too, but when I pay 50 percent of my income to various fees and taxes, I can't compete. I also resent immigrants who come here with their money earned in their local sweatshop environment and take advantage of our generous social programs without ever having paid into these programs, all the while skirting our taxes. Why does the government put the opportunistic immigrants ahead of their own native born citizens?
Like or Dislike:
0 
0
November 25th, 2010 at 2:49 am 18
I have 2 questions:
1. Does the Globe & Mail receive advertising revenue from the real estate industry?
2. If yes, would you trust anything they write about real estate, particularly anecdotal evidence from realtors?
It seems that as sales and prices continue to fall, the real estate industry becomes more shrill in its bleating trying to play up the wealthy Asian angle.
No explanation from them why prices soared in Abbotsford, Nanaimo, Saskatoon, etc…
It's not foreigners that drove up prices, it's cheap money.
Like or Dislike:
0 
0
November 25th, 2010 at 2:54 am 19
@Crash:
You don't have to. The price of houses is determined by the marginal buyer, who is the buyer that is least willing and able to buy or hold at the market price. For RE, that's landlords, who have no other reason to own than financial return. There is no reason for landlords to own at a cost over rental value unless prices keep going up indefinitely, and it is not possible for prices to keep going up indefinitely. If aggregate demand from landlords goes down, there is nobody to sell to except renters, and prices must go down.
Like or Dislike:
0 
0
November 25th, 2010 at 3:00 am 20
Weekly earnings in Canada up 4.3 per cent from year ago
That marked the second straight month in which year-over-year wage gains topped four per cent, the federal agency said.
Read more: http://www.vancouversun.com/business/Weekly+earni…
Read more: http://www.vancouversun.com/business/Weekly+earni…
Like or Dislike:
0 
0
November 25th, 2010 at 3:01 am 21
How do you go about measuring such stats? The G&M reports one thing anecdotally. Is the Landcor data correct? Can it be trusted? How current is it?
Manyee Lui says 80% of her business is Mainland Chinese.
Bob Rennie has said 60% of westside sales have been Chinese.
So the site you use to try to break these two very respectable anecdotes is referring to Landcor and then using those numbers for the whole of the REBGV? No one cares about the whole of the REBGV! Chinese certainly don't. They like Richmond and Westside Vancouver for the most part. Add in a bit of newer Coquitlam homes and many of the higher priced Burnaby homes… but for the most part they are in Westside and Richmond. For those markets, the ones driving the reported averages higher, they are making up the vast majority of the money. You cannot deny this. For the low end stuff, the 400k condo and the 700k townhouse? The ones that aren't selling as well or dropping price, the Chinese don't care about them. Look in your own hood. Who's buying? In mine it's nothing but Chinese and the properties are the newer, bigger, and much more expensive ones, not the sh!th*les.
The HAM is not a myth. It is a reality. Instead of tearing it down why don't you do some investigation of your own? Call up at least 10 top producers and ask them. To make it interesting call up 10 non-Chinese Realtors. And call them from the Westside. That would be interesting.
Like or Dislike:
0 
0
November 25th, 2010 at 3:14 am 22
@BearsCry:
The RE industry and media are intentionally conflating and confusing offshore Chinese buyers with Canadian residents of Chinese ethnicity, and it appears that you are as well.
The numbers say that offshore buyers are not significant in Metro Vancouver in aggregate. Perhaps they are in West Van and the West Side – but who can afford to buy there anyway, and in Richmond – but who wants to live there anyway.
Like or Dislike:
0 
0
November 25th, 2010 at 3:19 am 23
@Anonymous:
It is almost that simple. CRA calls it a net worth audit.
Like or Dislike:
0 
0
November 25th, 2010 at 3:31 am 24
My wife is a successful West Side realtor and she concurs with Manyee on stats. Marginal buyer is Asian from Oak street west to UBC. Most of those houses are not coming back on the market for at least a generation so effectively the pool of homes is being reduced. Schools (especially private) are the big driver followed closely by "status" of living in best/most expensive neighbourhoods (what ever that means!?!). While I think this is ridiculous it is what it is for now and has to be supportive of the market. Add lower rates and bullish commodity prices and I wouldn't bet against house prices until one of these factors change.
Like or Dislike:
0 
0
November 25th, 2010 at 3:39 am 25
@XXX:
One more time, the marginal buyer is the one who is least able and willing to buy.
Do you think it is possible for landlords to continue renting out in the West Side (or anywhere else) at a big cash flow deficit indefinitely?
Like or Dislike:
0 
0
November 25th, 2010 at 4:10 am 26
@MR BEAR
I had the opportunity to meet a new Canadian 'business investor' from China and he left his young wife alone with limited english to manage 3 properties. All mansions, where they each have apprx. 15-17 rooms as short-long term rentals. Heck, they even put coin operated washers and dryers in the main hallway and some slot machines in the 'communal kitchen' area. The folks who introduced me mentioned that the house the owners live in (which btw previously had an inside pool but was filled-in to accommodate another rental room) paid their house cash and the other two 'mini-hotels' were mortgaged but with a % down payment as per regulation for investment properties.
So the mentioned article does not account for how many multiple homes these new chinese immigrants will park their hard earned cash. It only assumes they'll buy one. I say BS!
Like or Dislike:
0 
0
November 25th, 2010 at 4:11 am 27
@patriotz: "It appears that there are lenders willing to finance offshore buyers with 35% down"
There are other more nefarious schemes making the rounds in immigrant communities. Consult your local REIN for more information on how you can profit from it.
Like or Dislike:
0 
0
November 25th, 2010 at 4:24 am 28
@XXX: "Most of those houses are not coming back on the market for at least a generation so effectively the pool of homes is being reduced"
Gobbledygook. People need to live somewhere. "Rich Asians" succumb to the same risks as everyone else: illness, divorce, death, and other financial hardships. I'm sure more than a few of these houses will be "coming back on the market" within the decade.
Like or Dislike:
0 
0
November 25th, 2010 at 4:27 am 29
You don't have to be an 'investor immigrant' to be a foreign buyer. There are no restrictions on foreign buyers so that number of 2500 is meaningless.
Like or Dislike:
0 
0
November 25th, 2010 at 4:37 am 30
"In addition to low interest rates on loans and the added lift from foreign demand, the trend may in part be due to rather than in spite of the economic gloom.
One explanation for the surge could be the 'safe haven' status of bricks and mortar amid worries about financial investments"
There's one thing the bears never considered, always quoting the economy as a source of a housing crash. Maybe it's the source of the strength of the market. Lots of money looking for a home. Some people willing to pay to hold US paper, some holding cash paying 1%, and some putting it into RE. This is why today's post 2008 crisis environment can't be compared to pre crisis areas like Ireland and US.
http://www.financialpost.com/news/What+crisis+Par…
Like or Dislike:
0 
0
November 25th, 2010 at 4:44 am 31
@Chip:
I'd like to know how they define "foreigner". Do they mean somebody who doesn't reside in Canada, somebody who resides in Canada but doesn't have PR, somebody who doesn't have Canadian citizenship, or somebody who wasn't born in Canada?
Like or Dislike:
0 
0
November 25th, 2010 at 4:45 am 32
@Troll:
"There’s one thing the bears never considered, always quoting the economy as a source of a housing crash. Maybe it’s the source of the strength of the market."
I remember after 9/11 that many were considering bricks and mortar to be one of the safest investments given the uncertainty in the economy late 2001.
Like or Dislike:
0 
0
November 25th, 2010 at 4:53 am 33
I just read this surprising article, only marginally relevant to RE in Vancouver, but relevant to the debate about the allegedly "problem free" integration of all news immigrants in Canada.
Discussing the role that race plays in the self-selecting communities that more and more characterize university campuses makes many people uncomfortable. Still, an “Asian” school has come to mean one that is so academically focused that some students feel they can no longer compete or have fun. Indeed, Rachel, Alexandra and her brother belong to a growing cohort of student that’s eschewing some big-name schools over perceptions that they’re “too Asian.” It’s a term being used in some U.S. academic circles to describe a phenomenon that’s become such a cause for concern to university admissions officers and high school guidance counsellors that several elite universities to the south have faced scandals in recent years over limiting Asian applicants and keeping the numbers of white students artificially high.
http://www2.macleans.ca/2010/11/10/too-asian/
Like or Dislike:
0 
0
November 25th, 2010 at 5:19 am 34
I'm a total bear but I know someone who had gone five months with only one low ball offer on a million dollar place in a nice area of Victoria. They switched to an Asian realtor based out of Van and had an Asian buyer with cash sign a deal within a week or two. Wife and kids are moving in, dad staying in China to work. Not saying it's the norm by any means but it does happen but only in high end neighborhoods.
Like or Dislike:
0 
0
November 25th, 2010 at 5:20 am 35
If it was all about hot Asian money, then local real estate whores wouldn't pen articles like this about local FTBs:
http://www.vancouversun.com/business/buyers+admir…
Anyhow, this article is delusional in claiming that the vast majority of FTBs have large downpayments. Whatever sample they are using is hugely unrepresentative.
No doubt he will find a similar sample for his followup article:
"During the next month, I intend to contact a few of the folks who attended the seminar this year, last year and in 2007 to find out if they bought homes and, if so, how their lives have evolved since they lost their property virginity. In a future column, I will share what I learned from the first-timers."
Simpson, what a shameless shill.
Like or Dislike:
0 
0
November 25th, 2010 at 5:32 am 36
The "rich" Chinese are having little effect on the market as pointed out. It is one of many stories (Olympics, running out of land, etc) put out by the promoters but are nothing more than a fairy tale to justify high prices.
With any bubble the promoters start out with the story and the investors have the cash (or credit in the case of RE). When it comes to an end the promoters have the cash and the investors have the story (with a whole bunch of debt in the case of RE).
Like or Dislike:
0 
0
November 25th, 2010 at 5:58 am 37
@ Londonernow:
Canadian residents are taxed on their worldwide income. If the father lives in China he is NOT a Canadian resident and will NOT be taxed in Canada. The wife and kids (who live in Canada) are Canadian residents. Their income is zero & so they will pay no tax here.
And also …the wife may get welfare and free medical since she has NO income.
Like or Dislike:
0 
0
November 25th, 2010 at 5:59 am 38
Can someone please elaborate on the phenomenon of Mainland Chinese driving the most expensive and luxuries cars (> 85K) at the Lower Mainland, Vancouver. Percent of other people driving that kind of cars is literally irrelevant. My observation points during a period of a few years are major streets in core DT and parkings at Ikea, Costco, Superstore and Home Depot.
Like or Dislike:
0 
0
November 25th, 2010 at 6:06 am 39
@Anonymous: Transfers from an out of country sugar-daddy are income for tax purposes, Captain Clearly Not An Accountant.
Like or Dislike:
0 
0
November 25th, 2010 at 6:30 am 40
Froth is right….I've looked for work in BC for the last 2.5 years and as far as engineering and design goes…it's DEAD.
I don't know how people in BC make ends meet…perhaps it's all the ahole Brits that live there too that seems to be part of it. Seems like they, like the Asians…end up leeching off everyone else in order to have the "good life."
Sad.
Like or Dislike:
0 
0
November 25th, 2010 at 6:35 am 41
Maybe they like expensive cars. They are probably a better investment than Vancouver real estate.
I was speaking with a BMW salesman a while back. He said 70 to 80% of the cars he sells are leases. Don't judge someones wealth or income by the car they drive. If you have to lease a 70 to 80K car you can't afford it IMO.
Like or Dislike:
0 
0
November 25th, 2010 at 6:39 am 42
@Patiently Waiting:
From your article: "The survey results, tabulated by Canada Mortgage and Housing Corp., reveal that most potential first-time buyers are between the age of 25 and 34 and rent accommodation away from parents. They plan to purchase a home within a year and will be buying with a spouse/ partner. They prefer a two-bedroom apartment or townhouse between 800 and 1,199 square feet. Their target price range is $300,000 to $399,000 and most have down payments of at least 10 per cent of the purchase price."
I wish them good luck getting a 1,199 square foot apartment in VW for $300,000.
Like or Dislike:
0 
0
November 25th, 2010 at 6:40 am 43
@Londonernow: I'm pretty sure the answer to your question is probably 0% or very close to 0%. Not only that, it's very common for the wife here to claim all kinds of social assistance due to low income.
The current thinking among many of these type of people is why not take the free money if the Cdn gov't is stupid enough to give it.
Like or Dislike:
0 
0
November 25th, 2010 at 6:43 am 44
@Anonymous:
That is incorrect. If you have a dependent spouse and/or children resident in Canada, you are deemed to be a Canadian resident for income tax purposes no matter where you live.
Like or Dislike:
0 
0
November 25th, 2010 at 6:54 am 45
@Renting:
Agree, but you still have to pay for lease and these are quite big numbers too, how come that mostly Chinese go for it? Some people that I know and they do well (say around 120K – 250K per year) wouldn't even dare to approach to those sort of cars, not to mention to lease or buy them. BTW take a walk through an upscale Holt Renfrew store at Pacific Mall and you'll notice yet another "Chinese Phenomenon" but let's stick with cars for now.
Like or Dislike:
0 
0
November 25th, 2010 at 7:10 am 46
@Renting:
Don't assume that somebody who pays a lease can't afford the car. There are often tax reasons for leasing assets.
Like or Dislike:
0 
0
November 25th, 2010 at 7:47 am 47
Exactly, they could afford it but don't. To them driving a fancy car is not important. To other cultures what you drive and the purse you carry is a big part of your social status.
I use to work with a junior accountant who took the bus everyday to work. I asked him why he didn't buy a car as where we worked was a pain to get to by bus. He told me he didn't want to drive a car unless he could drive "the best". A few years later he drove in a brand new Lexus SUV. This from a guy making 35K a year. He paid cash for it. He saved for 10 years or more and took the bus in the mean time. It is just a different culture. To him he would rather take the bus over driving a Honda.
Like or Dislike:
0 
0
November 25th, 2010 at 7:53 am 48
Asians have always liked to "look" the part and that explains the leasing an expensive car and dressing like a millionaire. Just because the oveinflated value of your quaint and very old west side address is worth a million today doesn't make you a millionaire. Helocs and expensive cars are a recipe for disaster not success something that many Asians and non asians alike will feel.
Like or Dislike:
0 
0
November 25th, 2010 at 7:55 am 49
You can write off an owned car as well. The same supposed tax advantages would be there for a leased property or any other leased asset for that matter.
The vast majority of people leasing cars do so because the payment is lower. Sure a business may not want to tie up cash and will lease vehicles, but we are talking luxury cars not work vehicles.
Like or Dislike:
0 
0
November 25th, 2010 at 8:04 am 50
Another comment on vehicles. Has anyone checked out the price tag on a new loaded pick up truck? They are like 50K to 80K. Lots of white folk living in the burbs driving these very expensive trucks around. They may not have the flash of a Benz or BMW but often cost more.
Like or Dislike:
0 
0
November 25th, 2010 at 8:27 am 51
@Renting:
Good point, I live, work in DT and buy in the crappy-big-chain stores therefore could have a bit skewed perspective but speaking of Mercedeses and bmws they are mainly driven by Chinese. I guess, you are right it could be culture and showing but then why others don't do that too? There are immigrants and all sorts of comers that came from similar shitty backgrounds and are hungry of those flashy things.
Like or Dislike:
0 
0
November 25th, 2010 at 8:45 am 52
You know what, I really don't get the whole flash car thing. What are people missing in their lives that they have to go into debt to buy a 50k car? I mena if you are absoloutely loaded, then fine – money is no issue – but why go into debt to buy 50k worth of phallic extension? I could go buy one for cash tomorrow, but don't see the appeal.
Oh well,the world takes all sorts, I guess.
Like or Dislike:
0 
0
November 25th, 2010 at 9:10 am 53
@Dave:
You would lease a car, but buy a house, for tax purposes?
Like or Dislike:
0 
0
November 25th, 2010 at 9:25 am 54
New Listings 89
Price Changes 40
Sold Listings 120
Like or Dislike:
0 
0
November 25th, 2010 at 10:05 am 55
Sold Listings 120
What are these people thinking?
Like or Dislike:
0 
0
November 25th, 2010 at 10:12 am 56
@xyz: They want a place to live?
Like or Dislike:
0 
0
November 25th, 2010 at 10:27 am 57
@Vanrod: Why don't they rent for 1/2 the monthly cost?
Prices are no longer going up. There will be no more flippiing for gains.
Like or Dislike:
0 
0
November 25th, 2010 at 10:37 am 58
@Devore:
Short of the Smith Maneuver, you can't write off interest on your house. But, you can write off a leased car. Lot's of businesses lease their cars and trucks.
Like or Dislike:
0 
0
November 25th, 2010 at 10:38 am 59
Canadian residents are taxed on their worldwide income. If the father lives in China he is NOT a Canadian resident and will NOT be taxed in Canada. The wife and kids (who live in Canada) are Canadian residents. Their income is zero & so they will pay no tax here
************8
That is incorrect. If you have a dependent spouse and/or children resident in Canada, you are deemed to be a Canadian resident for income tax purposes no matter where you live.
***********
Care to back up that assertion? Or are you just prepared to say, "no it isn't" ?
At the first hint that offshore (asian) non residents skirt the payment of taxes, you go into an unsubstantiated PC mode.
Clearly you are unfamiliar with the reasons why dad continues to work in Hong Kong and mainland China, while mom and kids (and it used to be just the kids in the 90s – remember latch key kids from HK)live in Vancouver.
Dad can continue to make huge sums of money that are taxed nominally (if at all) while Mom and kids can claim social service assistance (including ESL clasess)because they have no income.
Don't worry Patriotz, the Chinese non-resident "investors" were not the first to pull the scam. The Japanese did it here in the 80s as well, and avoided paying taxes.
I work in accounting, and you would be suprised at how many "rich asians" claim no income, yet drive the best vehicles and live in "owned" expensive real estate.
Like or Dislike:
0 
0
November 25th, 2010 at 10:42 am 60
@Renting:
Revenue Canada doesn't care if you drive a truck of a Merc. But, there is a cap on the write-off, which I think is $40k. Hard to be balla at $40k.
Like or Dislike:
0 
0
November 25th, 2010 at 10:48 am 61
When you earn and then save cash you don't want piss it away. you realize the value of a dollar.
When people can get something by just signing their name without having saved a dime they tend to give it less thought. Easy credit makes people do stupid things.
Like or Dislike:
0 
0
November 25th, 2010 at 11:26 am 62
@xyz:
What are these people thinking?
They're thinking interest rates are going up.
And they're right!
Like or Dislike:
0 
0
November 25th, 2010 at 11:32 am 63
Guys, if your wife or dependent is a permanent resident here and resides for more than 183 days / year in canada and has established ties to this country (kids go to school here) then CRA will consider that their principal residence is in canada and they will be taxed on their worldwide income. This is the law.
Do those rich asian declare their worldwide income here? I dont know but taking a 50% cut on your yearly income just to have your family live here seems a high price to pay, especially if your income is high, more than 200k/year.
My educated guess will be that most of those guys take a gamble, wife and kids live here, claim child tax benefit, free healthcare, ESL etc, and husband takes care of mistresses back home and business. If he gets busted by CRA then he moves back home anyway. I guess also CRA is ill equipped to deal with such cases and also it is not goverment policy as Canada does not want to be seen as harassing the rich foreigners for fear of capital inflow reduction.
This is grossly unfair to the canadian hardworking taxpayer as he/she has to compete against untaxed money and also suffer the consequences. But so are thousand of grow-ops around our province, they dont pay any taxes and yet the goverment never harrases them.
It seems that the goverment is keeping quiet on purpose and hoping that this foreign and drug money has eventually secondary positive effects in the form of more consumption, construction work etc. As long as we avoid the big bust , all means are justified by the end.
Like or Dislike:
0 
0
November 25th, 2010 at 12:17 pm 64
Consider this:
4325 W 9 was listed at $1,498,000 on November 5, 2010 and got sold at $2,000,000 on Monday after a fierce multiple-offer bid.
Lot size: 5,290 sq. ft.
Buildable: 3,174 – 3,703 sq. ft.
I doubt this was any rich Asian investors. These are wealthy locals that can play this game (in West Point Grey).
Like or Dislike:
0 
0
November 25th, 2010 at 12:43 pm 65
@paradox: "This is grossly unfair to the canadian hardworking taxpayer"
Do you have any numbers showing how prevalent so-called "astronaut families" really are? Maybe on the westside it's more common but in the rest of the Lower Mainland I think it's relatively rare.
Like or Dislike:
0 
0
November 25th, 2010 at 12:52 pm 66
@Revenue Canada: "Dad can continue to make huge sums of money that are taxed nominally (if at all) while Mom and kids can claim social service assistance"
Yeah making tons of money offshore then nickel-and-diming on chronically underfunded and oversubscribed ESL classes and using a health care system with long wait times.
Is it so hard to believe everyone, recent immigrants and Canadians with hundreds of years of establishment alike, is speculating on real estate? I'm trying to figure out which comments I hate more, the ones complaining prices are high because of immigants, or the ones bragging prices are high because of immigants.
Like or Dislike:
0 
0
November 25th, 2010 at 1:24 pm 67
@Revenue Canada: Wow, rich people evade taxes. Who knew? Next topic…
Like or Dislike:
0 
0
November 25th, 2010 at 1:25 pm 68
@jesse: I agree. Lots of reasons that Asian families, just like other families, sell their homes. I worked for one of the most sought-after private schools on the westside and have gotten to know a lot of these families. Here's a snapshot of the kinds of reasons they sell (which reminds us not to stereotype people too easily):
Sold house because Taiwanese father called wife and kids back to Taiwan so wife could return to work in family business during economic downturn in Taiwan. Family needed cash from sale;
Family divorce–father in China divorced wife (had a second family) and he sold home. Wife moved with kids from this marriage into a rental with instruction from husband to "get a job" — no more support for her, only for the kids. (She was young and naive and failed to get a property agreement before she agreed to move to Canada.)
Mainland Chinese couple folded Richmond-based vitamin business that failed and sold their one and only rental home (kept the personal residence).
Hong Kong couple moved to Shanghai so father could return to principal site of law firm and earn more than at satellite office in Van. Once kids entered university couple decided the would only rent a place on westside to return at holidays when kids are out of university.
Word on the street among many of these Asian families last year was "sell" because Van market was at peak and market would go down for several years. Use capital to buy multiple US properties instead because that market is way down already and they could make a bigger return quicker by speculating. (Of course, they didn't foresee the banks screwing up the chain of title in the MERS/securitization mess.)
Like or Dislike:
0 
0
November 25th, 2010 at 1:56 pm 69
@Paradox: I see your point of the dad being a "deemed resident". If he is taxed in Canada he would get credit for taxes paid in China & therefore only pay the difference in tax rates to Canada. Example: China tax rate 30% (guessing??), Canadian rate 44% so he pays an extra 14% to Canada.
Now if the Canadian government says we want you to pay all your income tax (44%) to Canada there is an issue. He can't be resident in both countries and be taxed in both countries 30% + 44% = 74%. Good luck telling the Chinese government that even though he lives and works in China he refuses to pay tax in China because he is a Canadian resident and pays taxes in Canada.
Besides I think the woman probably says she is a single mom.
Like or Dislike:
0 
0
November 25th, 2010 at 1:58 pm 70
Yeah making tons of money offshore then nickel-and-diming on chronically underfunded and oversubscribed ESL classes and using a health care system with long wait times.
@@@@@@@
Lol. When you don't pay into a system, you have no qualms about abusing the services provided by that system. Its really quite simple for those that are not naive
Like or Dislike:
0 
0
November 25th, 2010 at 2:07 pm 71
@Revenue Canada:
Why don't you just visit the CRA site, it all there in plain English. The CRA sees no problem with people being resident in more than one place at a time. There are ways to minimize you tax burden, but if you have a house here and depedents here and status here, you are resident here.
Like or Dislike:
0 
0
November 25th, 2010 at 2:10 pm 72
@Denier: "When you don’t pay into a system"
Well according to the article, paying $2MM for a Dunbar old timer is de facto "paying into a system."
Why would someone who has $2MM to buy property and a mint salary offshore insist on sending their child to an underfunded and overcrowded ESL class? China has some decent private schools so I've heard; in fact a lot of Chinese parents think even the IB program is inferior to curricula in higher end Chinese schools.
I also know a lot of born Canadians abusing the system. The sheer magnitude of the abuse blows the mind.
Like or Dislike:
0 
0
November 25th, 2010 at 2:15 pm 73
@ anonymous
you dont get it, rich people in China pay 0% taxes. Maybe some bribes , but thats it.
Even normal chinese dont pay taxes as you will find that mos ex-comunist countries didnt have any income tax. It takes one generations for those people to come around the idea of paying income tax. That is why there are so many state emterprises in china. Dont kid yourself.
Like or Dislike:
0 
0
November 25th, 2010 at 2:19 pm 74
@jesse
"Why would someone who has $2MM to buy property and a mint salary offshore insist on sending their child to an underfunded and overcrowded ESL class?"
here is the answer to your question
)
Why do you think Warren Buffet drives a used car and lives in his clumsy house he bought 50 year ago?
Like or Dislike:
0 
0
November 25th, 2010 at 2:21 pm 75
I love hot asians.
I also love money.
Me likes this topic.
Like or Dislike:
0 
0
November 25th, 2010 at 2:23 pm 76
@paradox: You do know Buffett sold property in Florida in 2005 because he thought it was overvalued, right?
Like or Dislike:
0 
0
November 25th, 2010 at 2:47 pm 77
Collected @ greater fool.
http://www.canadaimmigrants.com/Asia.asp
http://www.calgaryherald.com/business/Calgary+hou…
Like or Dislike:
0 
0
November 25th, 2010 at 3:14 pm 78
@Dave:
You can write off interest on your house if you use it for business purposes, like your car.
But I thought we were talking rich asians buying $2M houses and leasing expensive cars for their wives, not businessmen.
Like or Dislike:
0 
0
November 25th, 2010 at 7:56 pm 79
@Revenue Canada:
What's with this "PC" crap? I didn't claim that deemed residents aren't evading taxes on foreign income, I said that deemed residents are taxable on foreign income. All sorts of people evade taxes on all sorts of income, whether foreign or domestic.
There are any number of things which make a person a deemed resident for tax purposes regardless of actual residence, and they are on the CRA website.
Like or Dislike:
0 
0