Are you mad? Do something about it

The coming months of 2011 will provide an interesting ground for special interests pandering to politicians fighting for their futures. My recent favourite is Terry David Mulligan running booze across the Alberta line in an attempt to change the province’s arcane prohibition liquor transport ban. In terms of real estate, there are a few issues that have garnered attention of late, mostly around Vancouver’s chronic affordability issues, so much so even the City’s elite have started to take notice.

In election years politicians on both sides of a debate love a wedge issue. On this front real estate seems prime for garnering some of their attention. Christy Clark won her seat in Point Grey by not too large a margin, to the point where she is considering running elsewhere. Point Grey is close to ground zero when it comes to the international housing bubble, fueled by debt, speculators, and foreign capital investment. High prices are nice, even for locals, but this has limits. We have heard anecdotes of resident surgeons leaving Vancouver, not for higher-paying jobs, but for more affordable real estate. Parents in well-heeled neighbourhoods are starting to realize their children are unable to afford to live close to them. Then there are people who have been unwilling to take large debt loads and have chosen to rent, or simply move away from the city into the suburbs or to another metropolitan area altogether. Having an exodus of well-educated Vancouverites is not something in the long-term interests of a city that has delusions of being the next New York. The long-term health of the City I would hope to be in everyone’s interest.

So the questions for readers are:

  • Are recent house price movements in Vancouver enough to be a political issue?
  • What politicians would you specifically contact?
  • What groups of people would like to see governments do something about high prices?
  • What can provincial and civic politicians even do about it?

It’s worth thinking about what would be required for politicians to act to attempt to curb high prices in Vancouver, in other words, how should the problem of high prices be framed to make it a potential vote-winner and loser. Writing a rant to your MLA may be one strategy, but in an election year, a more concentrated, reasoned, and strategic effort may elicit better results. What do you think?

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deanbc
deanbc
9 years ago

"What can provincial and civic politicians even do about it?" They could increase property taxes. More specifically, and better, they should change provincial legislation to allow the tax to be charged on the land value only – ie. untax buildings. An annual land value tax would be discounted from current prices, decreasing housing prices. If the revenue were used to decrease other taxes, then people could as easily afford the higher annual tax (in effect this would be an income transfer from interest payments to banks to taxes for the government). Furthermore, a land value tax is economically efficient (doesn't distort incentives to work) while other taxes that are inefficient could be reduced. A higher land value tax would also mean that future price appreciations would go increasingly to government revenue, thereby decreasing the incentive for speculation – this could… Read more »

lol cats
lol cats
9 years ago

sweet. limey

trackback

[…] at vancouvercondo.info May 16th, 2011 at 10:07 pm – “My wife and I moved here 2.5 years ago from London UK, (I am Cdn). We are giving […]

patriotz
9 years ago

@Eddie:

Let Quebec voters know that the Feds are considering bailing out the western bubble. That’ll take care of everything!

You mean the province that elected, what, 5 Cons MP's? Have you been sleeping in a cave since Mulroney or Chretien was PM? Why would Harper give a hoot about Quebec voters now that he has a majority without their support?

If anything, the Cons will be more inclined to try to prop up house prices than before the election since they have way more MP's from Toronto now.

anymouse
anymouse
9 years ago

This is what happens when we invite the richest, most evil assholes from around the world:

http://www.vancouversun.com/West+Vancouver+woman+

God help us

JR
JR
9 years ago

Paul B where are you? Are the numbers that bad?

Sean
Sean
9 years ago

My wife and I moved here 2.5 years ago from London UK, (I am Cdn). We are giving Vancouver another year, and if prices don't return to sanity, we're out of here. We are both professionals and well-paid by Vancouver standards. But we did the math and for an "investment" in a home in Van, prices would have to rise 10% annually to match what we can make by taking our down-payment and investing it conservatively. So in the meantime, we are letting this all wash over us, and happily renting. But Vancouver needs to wake up and see that what's happening is of ZERO benefit to the city and is going to make it a much worse place.

Eddie
Eddie
9 years ago

Let Quebec voters know that the Feds are considering bailing out the western bubble. That'll take care of everything!

southseacompany
southseacompany
9 years ago

Problem is, 65% of metro population own, 35% rent. Depends on how much of the 65% is willing to want to have home prices come down.

Keeping An Eye On Th
Keeping An Eye On Th
9 years ago

Want lower prices? Let the bubble pop on it's own.
If the politicians get involved they will use our money to build a safety net to keep prices from falling.

They will throw a bone to the most vocal group in the form of social housing.

Anonymous
Anonymous
9 years ago

speaking of mad … I want to run down the streets screaming sometimes in this little town

' Chinese spreading wealth make Vancouver homes pricier than NYC '

Vancouver's Royal Pacific Realty had such a surge of business during the first two weeks of February that agents and assistants worked day and night shifts to find homes for Chinese buyers visiting during the Lunar New Year.

"It was unprecedented," said Royal Pacific Chief Executive Officer David Choi. "I called them sleepwalkers."

http://www.vancouversun.com/business/Chinese+spre

Jack
Jack
9 years ago

The first line of the article re: 1st 2 weeks of Feb……why in 3rd of May is this now being reported and not in the 1st week of March if this is NEWS?

Vancouver's Royal Pacific Realty had such a surge of business during the first two weeks of February that agents and assistants worked day and night shifts to find homes for Chinese buyers visiting during the Lunar New Year.

Anonymous
Anonymous
9 years ago

this is my favourite part of the Van Sun article

"Some buyers acquire multiple homes, one to live in and others for investment, said Chung, the broker. Her clients made their money in a variety of businesses, she said, including mining, stainless steel manufacturing and real estate. About 10 percent of them speak English, she said."

Read more: http://www.vancouversun.com/business/Chinese+spre

CanuckDownUnder
CanuckDownUnder
9 years ago

@patriotz:

Nice. The funniest suggestion is to buy in the $400,000 to $600,000 range in coastal and tourist properties. These are the holiday homes of people in the capital cities and will be hit the hardest, in fact they are already down significantly in some places. As a point of reference think Okanagan.

The number of home loans fell again in March, at their lowest level here since February 2001.

http://smh.domain.com.au/real-estate-news/home-lo

Sentiment has definitely turned here.

chip
chip
9 years ago

Sun is running a Bloomberg story on Vancouver RE and Chinese buyers.
http://www.vancouversun.com/story_print.html?id=4

Sample quote:

"Our office has done 50 sales this year, which is pretty incredible," said Vancouver realtor Tom Gradecak at his office in Point Grey, where he has one colleague who speaks Mandarin and Cantonese and is hiring a second. "Half of those sales are from mainland China."

patriotz
9 years ago

Australia Real Estate Bulls Trot Out Every Cliché Known To Man Select Clichés from the Article * "It's definitely a buyer's market" – Richard Wakelin, director of Wakelin Property Advisory * "This is a really good time for people to be trading up" – Richard Wakelin, director of Wakelin Property Advisory * "Buyers should be sitting back and watching for opportunities, looking for properties that have been passed in on the weekend" – Mark Armstrong, from Armstrong Property Planning * Century 21 director Charles Tarbey suggests buyers focus on the $400,000 to $600,000 range in coastal and tourist properties. Alternative Mish Suggestions 1. Trading up now will greatly increase losses 2. Tourist properties will be especially hard hit 3. Now is a poor time to buy in general 4. Wait 5 years, then see what prices are 5. In the… Read more »

ReadyToPop
ReadyToPop
9 years ago

Mom and Dad in Point Grey having to drive out to Sardis to visit the grandkids….yeah that's when
it suddenly hits home. I can hear them thinking…..what, you mean there is an actual human cost
to all of this? Hats off to a great topic.

Krazy Kanuk
Krazy Kanuk
9 years ago

@Devore: I sort of do think Americans have kind of learned a lesson. After all, their savings rate is what? Double ours? Another data point is after the $8K homebuyers tax credit expired, housing did (and still is) dropping.

I guess what I'm saying is that at least people there aren't saying "Real estate never goes down". At least people have learned that housing entails risks, and you don't hear "renting is for losers"

I do agree with you that people will always blame the lender/government/speculators/etc for their own mistakes. That just seems to be human nature 🙂

KK

Anonymouse
Anonymouse
9 years ago

@jesse:

"I disagree. Price movements in the past 2 years have only been taken up by marginal players; others — the majority of homeowners even in BC — will have large equity positions even with a 20% drop"

A 20% drop on a $1m house would be $200K. I can't imagine too many people being happy about losing that much cash, even if it is only a paper loss.

Anonymouse
Anonymouse
9 years ago

@jesse:

“LOL Do you think that jurisdictions where prices are not out of whack with incomes and rents have no government involvement? Please.”

Where did I say that?

Anonymouse
Anonymouse
9 years ago

@Devore:

"Do you believe the free market brought us here? "

No, I do not. But that's irrelevant to the point I was making.

Devore
Devore
9 years ago

@Anonymouse: Removing existing interference (ie CMHC) is not the same as wanting more interference.

Do you believe the free market brought us here? What a sad little troll you are.