Have we built too many condos?

Interesting article over at the Globe and Mail…

According to adjunct UBC planning professor Andrew Yan a mind boggling 25% of condos in some areas of downtown are either vacant or occupied by non-residents.

[edited to reflect reality – the 25% is NOT vancouver wide]

This was revealed at an SFU talk wednesday night that sought to look at the issue of foreign investment in Vancouver real estate.

Picture a 20 story condo tower.

Now picture 35 of those condo towers.

That’s how many vacant units are said to be in the downtown core alone.

Mr. Yan, who specified that it’s not possible to know exactly why so many apartments were empty, said data indicate Vancouver is creating neighbourhoods that appear to be very dense, but actually don’t have an active full-time population.

That gives a skewed picture of, for example, the amount of commercial activity they can support.

In Coal Harbour, where up to one in four condos is empty in the tower-dominated waterfront neighbourhood between Stanley Park and the downtown convention centre, the scattered shops in the area often struggle to stay in business. By contrast, the West End, which has a low rate of empty residential units, is bounded by three streets – Davie, Denman, and Robson – that are packed with busy small shops and restaurants.

Mr. Yan said that the high numbers of empty apartments don’t prove there’s a problem with foreign investors, but they do indicate that Vancouver has a large proportion of general investor buyers, be they offshore or Canadian.

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RealityCheck
Guest
RealityCheck

Empty Condos??

Why not the province charge non-resident owners a 100% surtax on property taxes? By this I mean people who are not Permanent Residents or Citizens.

Use the $$ for whatever…

These non-resident owners don’t vote so it shouldn’t sway politicians from enacting this.

However, the Real Estate cartel is busy paying off politicians for their policies so this will never happen here. Strange that authorities never investigate these payouts, which usually occur in tax havens.

Apocarypse Mao
Guest
Apocarypse Mao

Too many condos? I sure hope so.

derp
Guest
derp

A surtax wouldn’t do much. As Australia tried a similar measure thought to tax Chinese foreign buyers, they found that much of the non-resident owners were really just Australians themselves participating in property speculation.

patriotz
Member

The simplest and most effective way of discouraging properties from being left empty is higher property taxes. The smart thing to do would be to charge a surtax on all properties and rebate it to owner-occupiers or those who are reporting appropriate rental income.

patriotz
Member

Rob Carrick in the G&M:

Your attention is now directed to Denmark, where housing prices have fallen 20 per cent from their 2007 peak and 80 per cent of borrowers under the age of 35 owe more on their mortgages than their houses are worth. Danish lenders got themselves into trouble with mortgages that offered an upfront interest-only period. But what’s interesting here is the devastation caused by a 20 per cent decline in prices. Some observers have said that level of decline is possible here, although that’s not a widely held view.

http://www.bloomberg.com/news/2013-03-18/denmark-races-to-prevent-foreclosure-shock-as-home-prices-sink.html

But I thought Denmark was running out of land? 🙂

And Rob, I have to say that if Toronto and Vancouver come out with only a 20% decline, they will be lucky.

Lifetime Renter
Guest
Lifetime Renter
This is an obscenity. Shelter is a basic human need second only to food as to what is required for humans to survive. This sea of empty housing represents an artificial shortage and perpetuates unaffordability for those who do the work that makes this city run. A society is measured by its ability to provide basic needs to its citizens. That means that someone who puts in the daily grind of making a living should be able to afford shelter sufficient to lead a normal life, not one in which raising a family becomes a huge burden, in which debt becomes an endless worry and anchor on one’s life, in which so much of one’s income goes to shelter there is little left to enjoy at least a few of the pleasures of life. That is what is killing the… Read more »
Q
Guest
Q
I am so grateful to Prof. Yan for coming out with this study. The equivalent of 35 towers with 20 floors apiece sitting empty in Downtown Vancouver–that is compelling image. You can visualize that in your mind and instantly you know that something is very wrong with our real estate market. I think that this is the kind of statistic that can help the less educated masses understand we are in a real estate bubble. Most people aren’t as knowledgeable about real estate as the bear community on VCI. So when you try to explain to people that we are in a bubble, people have a hard time understanding price to rent ratios and MOI. But 35 empty condo towers creates a visual in the mind that anyone can understand. So I think this is a very powerful news story… Read more »
Q
Guest
Q

@ Lifetime Renter#6

I agree 100% and I don’t understand how anyone could have voted your comment down.

Keeping An Eye On The Pimps
Guest
Keeping An Eye On The Pimps

Why aren’t my posts published?
Testing

patriotz
Member

@ Lifetime Renter#6

Shelter costs, i.e. rents, are no higher relative to incomes than decades ago.

The problem is that too many people see buying RE at an inflated price as a good investment.

Shelter and ownership of RE are two different things.

Anonymous
Guest
Anonymous

#4,
you are so smart, why are you being kicked from one job to the next and one province to the next? why arent you smart out and do some good for your own sake.

Vote Down The Facts
Guest
Vote Down The Facts

“Vacant or occupied by non-residents”. Why are some of the comments so far ignoring the “occupied by non-residents” part and assuming that they’re all empty?

painted turtle
Guest
painted turtle

In Paris there is a tax on empty dwellings.
Paris RE is bought by rich foreign investors (Russian, Middle East, etc). At some point, there were too many empty dwellings, and not enough rentals. Therefore the tax.
See for example (in French, sorry):
http://www.atlantico.fr/decryptage/taxes-logements-vacants-ni-baisses-loyers-attendre-ni-appartements-supplementaires-marche-gilbert-emont-493395.html

Apocarypse Mao
Guest
Apocarypse Mao

BTW, Yan did not say that 25% of condos in Vancouver were empty. He said 25% of condos “in some dense areas of downtown” were empty.

In Metro Van, Yan says 15,000 to 20,000 units are empty. There’s 1 million households in Metro Vancouver, so that amounts to 2%.

We, unlike some of the RE industry, should not be misleading in the use of statistics.

Anonymous
Guest
Anonymous

putting all the regions eggs in the vancouver basket is turning out to be a very bad idea and we are seeing the consequences of that strategy.

it’s time to move more and more government and public sector offices out of vancouver.

it’s time to build up transportation outside of vancouver.

rcmp headquarters has moved. post office has moved. it’s time to move the court house next.

as for broadway skytrin, “let them ride bikes”.

concentrating jobs, housing, and transportation all in vancouver only feeds speculation which leads to unintended consequences like empty condos.

Jerry Boyle
Guest
Jerry Boyle

I believe he said the vacancy rate for Van was about 7% – 2% higher than other metro areas in Canada.

gokou3
Guest
gokou3

Re #14 Apocarypse Mao:

“In all, the city of Vancouver appears to have about 7,500 more vacant housing units than what would be expected in most other Canadian cities. For Metro Vancouver, there are around 15,000 to 20,000 more.”

The keyword is *more*.

MarKoz
Member
Active Member
I think that looking for non-residents provides a less effective insight into the situation. My daughter just graduated from a west side high school and 82% of her classmates were Asian (according to a speech given by the principal). They include East Indian in that classification but there aren’t that many. So these people are not non-residents. Their dads are non-resident. The income stream that purchases their homes is “non-resident”. That is a problem because they make their money in a low tax, low labour cost environment that local business people and workers can’t compete with. In addition, that sky high income is not taxed in Canada (except when they purchase something) and does not contribute as it should to the maintenance of the country. I say that if you live and work here (Canada) and pay income tax here… Read more »
painted turtle
Guest
painted turtle

“82% of her classmates were Asian (according to a speech given by the principal”
I am shocked that a principal would label his students according to some ethnic label. He did not make a distinction between Canadian of Asian origin and foreign students? Two crowds with different needs…

“I say that if you live and work here (Canada) and pay income tax here and can prove that the money you are using to purchase the property was earned here ”
Isn’t it the same as saying you are a landed immigrant?

MarKoz
Member
Active Member

@19 Painted Turtle
It is the same as saying you are a landed immigrant IF (in my scenario) the money you bought the property with was earned and taxed here.

Apocarypse Mao
Guest
Apocarypse Mao

@ gokou3

Thanks yes. I missed that.

I see Yan’s saying 7.7 % unoccupied in City of Vancouver amounting to 22k units. So in Metro Van, if plus 15k-20k more, that would be 37k-42k unoccupied units, so about 4%.

MarKoz
Member
Active Member

@ Painted Turtle
I wasn’t there for the principal’s speech so I don’t know the particulars. My daughter told me what was said. I doubt many Canadians of Asian ancestry are buying $2 million tear downs.

jesse
Member

“25% of condos in Vancouver are either vacant or occupied by non-residents.”

I like this blog for a lot of things, but not for this statement. It’s incorrect, full stop.

kabloona
Member
kabloona

@5:

Fuuniest part about Rob Carrick’s piece on Denmark Property Bust was the comment by the ever-hopeful “whazzup”.

Sheesh, that guy must be up to his eyeballs in property “investments”…

whazzup
8:55 AM on March 21, 2013

“Of course carrick tries a back hand swipe at the psyche of homeowners on this and a moral hand out to his renter friends, but lets look more closely at Denmark, not to mention its seedy racist underbelly.
The lesson is young people need to save cash and not be given interest only loans….”

Blah-blah-blah…..hey, get off the blogs and go buy another condo, whazzup.

🙂

Anonymous
Guest
Anonymous

Jesse #23,

Are you siding with the Realturds now?

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