HST and House Prices

Poor Helmut Pastrick is at it again, (HT Raize on Realestatetalks) providing insight into how markets will react with BC voters laying the smack down on a harmonized sales tax. So let’s assume for a moment what’s done is done and look again at how the HST affects house prices. According to Pastrick:

According to Pastrick—chief economist for Central 1 Credit Union, the association of credit unions in B.C. and Ontario—some buyers, especially of new homes, may delay purchases and save themselves some extra money.
“Will it hurt?” Pastrick asked in a phone interview with the Georgia Straight. “I think that impact will be temporary. The activity would be made up under the new system shortly, and indeed under the new system, the demand for housing is somewhat improved given the lower costs that will be in effect. So that would provide some lift to the housing market.”
A housing-market analyst with the Canada Mortgage and Housing Corporation in B.C. before joining Central 1 in 1997, Pastrick said that the changeover period will also likely see postponements in the planned construction of new homes.
“It depends on the transition rules, but in general I would expect to see some delay into the new tax system for some new construction,” he said.

Ah so demand will improve under the new system. Well that’s good news. But let’s remember a few things about the housing market:

  • Most housing stock is not taxed and often competes directly with new stock.
  • A large part of total costs are associated with land prices.
  • Developers want to make money.
  • Rational investors have other competing investment choices.
  • It is true that Realtor and other transaction fees will be taxed less under the new regime.

I do not pretend to be a professional economist, but I’m trying real hard to figure out how, as an investor, I would hold off a purchase solely due to the repealing of the HST. After all, I can factor the tax into my ROI calculations. Please help me out, readers!

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Ravishing Rick
Ravishing Rick
9 years ago

Cut the music!

All you fat, real estate humping, union slobs… Sit down and shut it…so your ladies can see what a real capitalist looks like!

To my fans and li kai, sorry for my absence..

News for you: Riot review in vancouver get this: the vancouver police department paid huge overtime to their head office staff responsible for conducting the review… Why the hell would their head office executive staff be paid hourly? Is that much tax revenue generated off of fatty vancouver real estate. Vancouver real estate correction= forced austerity

Hit the music!

ReadyToPop
ReadyToPop
9 years ago

Result Summary

Overall the situation in Asian countries is as follows:

(1) Out of 13 countries surveyed, 5 countries do not allow private freehold land ownership at all because this legal concept is unknown to them. Those countries are China, Laos, Hong Kong, Myanmar and Vietnam.

(2) Out of the 7 countries where the principle of freehold ownership is known 3 countries do not allow at all foreign freehold land ownership. Those countries are Cambodia, Indonesia and Philippines.

(3) Foreign freehold land ownership is possible only in five Asian countries that are Korea, Malaysia, Taiwan, Singapore and Thailand.

Buying Property: Comparing Foreign Land Ownership In Asia

ReadyToPop
ReadyToPop
9 years ago

painted turtle

@N

It is not hate against Chinese people, but against HAM. I do not care if they come from China or Saudi Arabia or the USA. It is the ostensible exposition of wealth that I find difficult to deal with. If I wanted to live in Monaco, I would have moved there. I think those who are hurt the most by what happens in Vancouver are the middle class Chinese Canadian. I have heard a lot of nasty anti-HAM talk from them.

Just take a look at Singapore as an example of what happens when HAM meets a finite local RE market and prices out the natives. The irony of it is, the sentiment and policy of controlling local RE has been alive and well in Asia for some time.

Vansanity
Vansanity
9 years ago

I missed this… what's HAM?

Li Kai Shing
Li Kai Shing
9 years ago

Also:

Asian youth need to vent…so if drive cars fast…none of your business.

I mean, study 25 hours a day, plus go to Kumon 5 hours a day, plus piano/violin/Fender stratocaster lesson 4 hours a day = 34 hours a day.

This is why capitalist paradise of mainland China have one child policy, people too exhausted….not want to fill hospital when BayWatch reruns on.

If round eyes work as hard, maybe drive 1972 Ford Pinto up to 50km/h …downhill.

Li Kai Shing
Li Kai Shing
9 years ago

Hey…

In my 20 car garage and notice Lamborghini, Ferrari , Maserati not there.

WTF?

I tink stolen by basement suite troglodytes….y'know, the ones drive Ford Pintos ,Ladas, VW Vanagons and the odd Skoda.

YLTN @ Work
YLTN @ Work
9 years ago

@Joe:

And a license plate like I zhu, nah, not Asian at all.

Regardless of race, I kinda wish these guys had a big pileup and spent the rest of their years in wheelchairs – assuming no innocents are involved.

Check Again
Check Again
9 years ago

“Sorry you’re so offended that the assumption is they’re Chinese, but based on past incidents it’s a pretty safe bet so save your outrage for something truly outrageous.”

Outrage is a healthy response to bigotism. Hatred for recent immigrants or specific ethnic groups seriously damages quality of life for everyone. It is a good idea to object to it whenever it raises its ugly head.

______________

Hey N,

Go watch the video at #41 – where there is smoke there is fire. Go through the last 5 years of articles on high speed races (and murders from the racing vehicles) and you will see a trend.

The era of knee jerk responses where one throws out the R card or claims bigotry are gone. Deal with it – the pendulum has swung the other way.

Phil
Phil
9 years ago

@Painted Turtle, nobody (aside from western folk) would feel guilty for not being happy with their city being flooded with a different group of people, making them a minority (Richmond, Burnaby, Van) in their hometown, ruining their chance at an affordable lifestyle and having the newcomers wealth and disdain for the law flaunted in their face. Stop qualifying it by saying, I love (insert ethnicity here).

Patiently Waiting
Patiently Waiting
9 years ago

@painted turtle: They all knew each other and were "celebrating" a friends departure by driving like maniacs down the highway during rush hour.

And yes, every last one of them were HAM.

painted turtle
painted turtle
9 years ago

@N

It is not hate against Chinese people, but against HAM. I do not care if they come from China or Saudi Arabia or the USA. It is the ostensible exposition of wealth that I find difficult to deal with. If I wanted to live in Monaco, I would have moved there. I think those who are hurt the most by what happens in Vancouver are the middle class Chinese Canadian. I have heard a lot of nasty anti-HAM talk from them.

paulb
9 years ago

New Listings 216

Price Changes 78

Sold Listings 83

TI:15962

If you like the stats updates please “like” our Facebook page http://tinyurl.com/paulandlauren

Website http://www.laurenandpaul.ca

Troll
Troll
9 years ago
4SlicesofCheese
4SlicesofCheese
9 years ago

http://jalopnik.com/5836512/mounties-impound-13-s

Watch the vid, they are chinese can we get back to real estate now.

Joe
Joe
9 years ago

@chip: On the blue Lambo, the custom license plate says "ZHU". Can't be more chinese than this!

chip
chip
9 years ago

Going out on a limb here but a personalized licence plate with three 8s in it suggests they're not from Dusseldorf.

Anonymouse
Anonymouse
9 years ago

@paradox:

"So we are second only after Japan…"

Your own graph says 4th.

Patiently Waiting
Patiently Waiting
9 years ago

oops on last post, its the same article as daily topic 😛

Patiently Waiting
Patiently Waiting
9 years ago

Pastrick predicts short-term pain for home building after HST rejection.

http://www.straight.com/article-444066/vancouver/

Patiently Waiting
Patiently Waiting
9 years ago

BC Conservatives pander to homoaners with vague promise to maybe get rid of the PTT, if they ever get in government.

http://www.straight.com/article-444091/vancouver/

Best place on meth
Best place on meth
9 years ago

@N:

>>>Hatred for recent immigrants or specific ethnic groups seriously damages quality of life for everyone<<<

It certainly does, and if you are making that implication then you had better explain yourself in more detail.

N
N
9 years ago

"Sorry you’re so offended that the assumption is they’re Chinese, but based on past incidents it’s a pretty safe bet so save your outrage for something truly outrageous."

Outrage is a healthy response to bigotism. Hatred for recent immigrants or specific ethnic groups seriously damages quality of life for everyone. It is a good idea to object to it whenever it raises its ugly head.

davers
davers
9 years ago

@Anonymouse: Exactly. I went to high school and college with tons of Asians who are now in their mid 20s. Around 80% of them were born and raised in Canada. There are lots of older Chinese immigrants, but most around their 20s were born here. (yes I realize this is from personal experience and I dont have stats to back this up) @Best place on meth: While I agree that the danger is still the same regardless of the cost of the cars, part of the reason this is such a sensational story drawing such attention is the fact that they are under 20 and have really expensive cars. Another reason for the outrage is because of the very low punishment they recieved. But that is understandable because even though witnesses claim they were doing 200km/h, they have no proof.… Read more »

real_professional
9 years ago

Sauder School of Business – Centre for Urban Economics and Real Estate: Top Paper of 2011

http://cuer.sauder.ubc.ca/download/news_EricaTim_

From Conclusion:

"First of all, Vancouver’s expected price appreciation rates and

consistently above actual rates which suggest that bubble activity is highly probable."