The problem isn’t prices, it’s the buyers

Over on Medium there’s an Op-Ed by Spencer Thompson on the high cost of Vancouver Real Estate.

Not just the literal high cost of property, but the risk of a greater price paid by the city .

The secret that no-one actually wants to talk about is that the quality of a city is mostly determined by a simple factor — the number of smart, ambitious people who live there. These people are the ones who want to drive that city forward by investing in opening businesses, donating their time to the arts & community, participating in city planning, etc… Without them, growth wouldn’t happen and you wouldn’t get all of the benefits that great cities enjoy.

The biggest contributor to the decline of a great city is simple — it’s the decline of those smart people. When they decide that the cost of living in a place outweighs the benefit, they move. They don’t just take their money with them, they take their intellectual and future capital with them. This is dangerous. When people aren’t willing to make an investment in a place to live any more, the city doesn’t just lose their taxes for the year, they lose a massive function of potential jobs created, culture added and future capital they can put to work.

Read the full article here.

Now clearly Mr. Thompson is a believer in foreign investors as a primary driver of prices in this city, but whatever the cause, HAM, Drugs or Credit, does he have a point? Do high real estate prices risk driving out ‘smart people’ who would contribute to a brighter future for the city?

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5 years ago

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Oracle
Oracle
5 years ago

@Westside

Lot is doing fine. Similar lots now going for $699,000. mnay sold in one subdivision. Go see for yourself. SE corner of Hwy 10/144 St in Surrey.

It is what it is. Jealousy is a bitch, eh?:)

kabloona
kabloona
5 years ago

@134 Hmmmmmm…..watching his crappy TV show and listening to some of his interviews, I got the feeling Niall was basically recycling a bunch of warmed-over Cato Institute rhetoric…now let’s consider his economic prescience from way back in 2010:

“We believe the Federal Reserve’s large-scale asset purchase plan (so-called “quantitative easing”) should be reconsidered and discontinued. We do not believe such a plan is necessary or advisable under current circumstances. The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed’s objective of promoting employment.”

Fast forward to October 2014: inflation in the US is still low, WTI oil price is currently below $85, USD is stronger than most world currencies, and the US jobless rate has fallen to 5.9 per cent.

Yup. Niall nailed it….

😉

benti
benti
5 years ago

Speaking of stockmarket, in HK, HSI looks like August was a bull trap.
For instance, look at this chart of Road King Infrastructure. A benign listing if there ever was. If it breaks resistance… ouch baby, that is a 30% haircut… look out below.
http://www.aastocks.com/en/stock/BasicChart.aspx?symbol=01098

LS in Arbutus
LS in Arbutus
5 years ago

Do NOT under any circumstances take any of these posts as tax advice. There is a LOT of misinformation here.

If you have a complex tax situation, and anything involving more than one country is, seek a CA or tax lawyer.

This is not the time to try and google it.

joe
joe
5 years ago

@ Bull! Bull! Bull!

Yeah, but what does the 5% dividend compounded over the last 10 or more years add up to?

Bull! Bull! Bull!
Bull! Bull! Bull!
5 years ago

hi bears, how are your stock portfolios doing? i’m sure in 6 months i’ll hear about how everyone sold at the top.

yes, i know that stocks are liquid which means you can sell them at anytime for the market price. funny thing is that everyone has that ability. so everyone can sell at the same time causing the market price to crash overnight.

anyways, sleep tight and remember, rent is due at the end of the month.

Westside Realtor
Westside Realtor
5 years ago

Wheels coming off the westside sfh high end market.

Perhaps all the $ is moving to Surrey building lots..?

flaneur
flaneur
5 years ago

distribution of Avg Income Growth during economic expansions after WWII
http://pavlina-tcherneva.net/images/USinequality.jpg

flaneur
flaneur
5 years ago

Back on November 15, 2010, (Niall Ferguson) was one of the signatories of the following letter, addressed to the Chairman of the Federal Reserve, Ben Bernanke, which was published in the Wall Street Journal:

12/05/2013
Quantitative Teasing
http://www.niallferguson.com/blog/quantitative-teasing

flaneur
flaneur
5 years ago

economist Karl Case of Wellesley College paid tribute to Nobel laureate Robert Shiller with an original poem on the lessons of the real-estate bubble and its aftermath. Reflection on the Housing Market: Seven Years After the Fall By Karl E. Case For the last dozen years we have shed many tears Living through a recession The world was broke and it was not a joke When we talked of another depression Fifteen million without a job Foreclosures and banks that fail 401k’s became 201k’s And everything’s up for sale How could it be? What didn’t we see That led to all of this trouble? There is little doubt that the proximal cause Was a bursting housing bubble But other than that who can we blame? And what do they lament? Millions of people contributed to This hundred year event ~.~… Read more »

Marco
Marco
5 years ago

#117 hedge fund

Yep, I agree many unsold condos will become rentals. You can see a condo development for instance near Cap Mall advertising rent or own and they only have the building wrap (Typar) on it so far. Interesting times coming up me thinks. Peace.

Egg Hunt
Egg Hunt
5 years ago

Canadians can hold citizenship and reside outside Canada,
and be officially Non-resident.
Many coutries are fall into this treaty.

US citizens including duo passport, greencard holders, or any “US person” by definition,
no matter where they live, some just born in US and left when they are zero year old, they are subject to
US tax law.
And this will be enforced more in 2015.

Egg Hunt
Egg Hunt
5 years ago

#128

Youu don’t know what you are talking about.
US definately have different tax rules.
Google crossborder tax accountant,, etc and learn.

paulb
5 years ago

New Listings 190
Price Changes 78
Sold Listings 87
TI:15513

http://www.paulboenisch.com

patriotz
5 years ago

@122: “She might not even have a SIN.”

As anyone with a kid knows, you need to have a SIN and file tax returns to collect child benefits.

patriotz
5 years ago

@118: “US has different rule. No matter where you reside, any nationalities, who holds US assets could be subject to US income taxes,and gift and inheritance taxes.”

It’s not a different rule.

If you are a non-resident, you are liable for taxes on income earned in the US. Same as Canada.

If you are a resident (actual or deemed), you are liable for taxes on worldwide income. Same as Canada.

Only difference is that Canada doesn’t have inheritance or gift taxes.

southseacompany
southseacompany
5 years ago

Reuters: “Canada’s Oliver ready to act but sees no housing bubble”

http://ca.reuters.com/article/businessNews/idCAKCN0HY2I220141009

“The Canadian government stands ready to act to cool the housing market if necessary but does not see a housing bubble or the need for any dramatic moves, Finance Minister Joe Oliver said on Thursday.”

“Canada’s housing market avoided the crash that the United States went through. Its urban condominium market has been particularly hot.”

Yunak
Yunak
5 years ago

@121 Harry Wang

Tsui Yin Cherie Wong… sounds like some white-trash, crack-addict lady from Surrey?

Egg Hunt
Egg Hunt
5 years ago

#122 I am not tax, accounting, law, or immigration specialists, but I know of many wealthy individuals’ personal and financial details due to my previous job as well as my personal contact. I have many associates, acquaintances in the above professionals, so I consider myself having good valid resource of information in this regards.   Out of all options stated, I am not hopeful if CAR will take any actions, but only exception could be by Tips, as you said. Same for immigration, or city by-law, etc. I can’t do due to confidentiality law under my profession (LOL).   One more comment, US will charge income taxes no matter where you reside, Citizen or Green card holder. Also anyone being consider “US Person” in their definition. Renouncing process is getting even tougher next year.   Also, even Non-US person can be subject… Read more »

bobwestsiderealtor
bobwestsiderealtor
5 years ago

Interest rates are going to skyrocket once this pesky deflation scare is resolved. Right Patriotz?

I’m counting on your advice because your calls have ben in-humanly prescient over the last 6-10 years or so.

Your ability to put aside ideological baggage and examine markets agnostically is second-to-none.

elvince
elvince
5 years ago

@space889: Leave US out of the tax debate, it’S the only country in the world (to my knowledge) who will tax you even if you don’t reside in it as long as you have citizenship. As for Canada (and most countries), they will tax you on your worldwide income if it deems that you reside there. Owning a house isn’t even necessary; you could rent. Now in the case of Asian lady renting 1/3 of her house to someone, the CRA has 2 options: 1-Declare that the lady (and her offsprings) are canadian resident, but not the husband. In this case, the net income from renting the house (e.g. rents- 1/3 expenses) is obviously taxable. Any money she gets from her husband could be considered an alimony or a work income, and therefore become taxable. If the house is owned… Read more »

Harry Wang
Harry Wang
5 years ago

Surrey woman admits she tried to hire a thug to beat man she said owed her money According to court records, during an appearance Tuesday in provincial court in Surrey, Tsui Yin Cherie Wong admitted to counselling to commit offences — aggravated sexual assault, assault with a weapon and forcible confinement — that were not committed. In March, Surrey RCMP received a complaint from a man who had placed an ad on Craigslist under the heading “Big Strong Man for Hire,” soliciting odd jobs such as landscaping, drywall and painting. He received an email from a woman who wanted to talk to him in person about a job. During a series of meetings, Wong allegedly told the labourer that she wanted him to go to the workplace of the intended victim on a Saturday, Taser or tranquilize him, handcuff his… Read more »