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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Slagathor
Guest
Slagathor

….“B.C. had the highest median income in Canada for men in 1976, at just over $50,000 in 2011 dollars, but that dropped to just over $33,000 in 2011,….

My suspicion is that if non taxable income from recurring flipping of a primary residence was included the BC average would rise considerably. People, men in particular, have stopped working in mining and Forrest industries and are now paid in the tax free primary residence flipping industry which doesn’t show up on tax forms.

ostritch
Member
ostritch

FOMC dovish.

Egg Hunt
Guest
Egg Hunt

>#116 Space

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.

Caution is always requird.
Refer to US crossborder tax specialist for more details.

hedge fund
Guest
hedge fund

Watch how fast those condos become apartments. Make your head spin.

space889
Guest
space889
@CRAYI – *Sigh*…. Using your argument, any Canadians who have RE in US or holds US stocks or does any business with US would then be liable to IRS for taxes on their worldwide income?? That’s basically what you are saying. However we know you aren’t unless you actually fulfill US residency rules. So if you bought 100 houses in US for rent but never live in US for more than say 3 months a year, you don’t have to file US tax returns on your worldwide income. All you are liable for is the withholding tax on your rent. Even if your wife and kids and parents all live in US, you still don’t have to pay tax to Uncle Sam cuz you aren’t a US resident! Now, why don’t US, the most powerful country in the world do… Read more »
southseacompany
Member
southseacompany

“Toronto Condo Boom ‘Looks Like’ It’s Over: BMO”, Huffington Post

http://www.huffingtonpost.ca/2014/10/09/toronto-condo-boom-bmo_n_5957930.html

““It certainly looks” like Toronto’s impressive condo boom has run its course, the Bank of Montreal says in a client note. Housing starts in Toronto dropped to their lowest point in four-and-a-half years in September, according to new numbers from the Canada Mortgage and Housing Corp. (CMHC).”

“Meanwhile, the value of building permits issued in August in Greater Toronto dropped by a massive 43.5 per cent in one month, StatsCan reported this week. Compared to the same month last year, Toronto building permits are down 27 per cent, suggesting this downturn is more than a one-month blip.”

“All the same, “there are still 56,000 units under construction in the city, so we could see a dose of supply hit the resale market in the year ahead,” Kavcic writes.”

How?
Guest
How?

An empty parking lot, with perfect conditions. How does this happen? Only in Richmond

http://youtu.be/tG20ReYmLxY?list=UUb0rwccagpX_NLgAxChyHJQ

Shut It Down Already
Guest
Shut It Down Already

That’s an anecdote, not a statistic. You’re not a realtor, so why not quit the charade?

Westside Realtor
Guest
Westside Realtor

Statistic:

We are receiving more overnight voi emails from irate selling clients for lack of offers/price reduction frustration than I can recall in many years.

Sign of what is to come?

patriotz
Member
@70: “B.C. homebuyers put a premium on investment value, survey finds” The opposite is true. Investment value is the amount of income an investment produces relative to its price, or in plain language how much you get for your money. BC RE has among the worst value in the world. “British Columbians are more likely to consider their homes as investments than are other Canadians” All homebuyers consider their homes as investments. An investment is any asset that provides a future tangible benefit, and having a place to live is a tangible benefit. “B.C. is the only province to list the potential for the home’s value to increase as one of the top three factors in making a purchase.” That should be price to increase. That is, BC purchasers are far more likely to be speculators than those in other… Read more »
Bailing in BC
Member
flaneur
Guest
flaneur

Had a good laugh at this greedy seller. They own several properties and one of the family members is a realtor.
V1021104 (2013 Aug) asking $549,800
V1070025 (2014 June) asking $488000

George
Guest
George

From the Vancouver Sun:

“B.C. had the highest median income in Canada for men in 1976, at just over $50,000 in 2011 dollars, but that dropped to just over $33,000 in 2011, lower than both the Prairies and Ontario, according to an analysis of Statistics Canada data by University of B.C. economist Kevin Milligan. This mirrored a national trend of declining employment income for men, but the trend was most pronounced in B.C.”

http://www.vancouversun.com/news/metro/Employment+income+plummets+since+1970s/10274916/story.html

Oracle
Guest
Oracle

This market will never slow.

Everyone in the world wants to come here.

@ted-east-side
Guest
@ted-east-side

‘Ambition goes to die’

That is beautiful Ted, like fine wine tasting over Saturday mornings RE ads.

Egg Hunt
Guest
Egg Hunt

>#97

If non-resident personal owns real estate property in Canada,
and collecting rental income, as far as I know, withholding taxes
(25%?) is due every month.
You have to remit to Receiver General as soon as you receive the rental cheque, or subject to interest penalty.

Westside Realtor
Guest
Westside Realtor

One of our selling clients went ballistic on of tonight as we have not been able to get her out of one of her properties for what she paid a little over a year ago.

We are the second agent, and she is now threatening to list with someone else if we can’t get her out at break even.

Typical client reaction at this point of the cycle (leading edge of the downturn) .

My guess is that we have massive downside ahead.

tedeastside
Member
tedeastside

even Jock Finlayson said Vancouver is where ambition goes to die

ouch!!! that doesn’t exactly fit with all the best place on earth winter olympics chest thumping vancouverites do

paulb
Member

New Listings 229
Price Changes 74
Sold Listings 121
TI:15489

http://www.paulboenisch.com

Son of Ponzi
Guest
Son of Ponzi

Seems like the locals in Richmond And Vancouver West have still plenty of money left for spurging on expensive French wines:

“Almost 70 per cent of the 2011 Bordeaux wines available sold out province-wide on Oct. 4,” said spokesperson Tarina Palmer.

How did sales go at the Richmond liquor stores?

Both the Brighouse and Ironwood branch finished in the top-10 stores in Bordeaux sales.

Brighouse sold more than 3,200 bottles to place second in overall store sales, behind only Vancouver’s 39th and Cambie’s B.C. Liquor Store.

http://www.richmondreview.com/business/278452001.html

condo_day_ftw
Guest
condo_day_ftw

In summary: There are many legit reasons why someone may not be paying income tax (business, non-resident, selling investments, etc.). Your landlord is most likely an honest person – most people are. However, if you have true suspicions there is no harm in alerting the CRA and letting them look into it in more detail if they want to. Especially if it will help you sleep better at night.

@97
Guest
@97

“If that were a case why wouldn’t a Chinese (or any other) national run a business strictly from China”

You can easily run a business in China or Canada and have no personal income for tax purposes. Even if the business is profitable if you don’t take the money out by salary or dividends or sell the business you have no income. It works just like you holding a stock. If the company makes money but does’t pay a dividend you don’t pay income taxes on the companies earnings.

@97
Guest
@97

“Everyone with sufficient residential ties to Canada can be taxed on their world income.”

But you first have to come here first. Read the CRA wording carefully. It always starts with: If you leave Canada and…

In other words it is intended for people who have established residency, then left and still have family ties here. NOT for people who just send their wife and kids over and then purchase a house in the wife’s name.

CRAYI
Guest
CRAYI
@Space889 I’m just curious where it says that you have to be considered a resident first, as I’ve never heard that. If that were a case why wouldn’t a Chinese (or any other) national run a business strictly from China and never come to Canada and do everything by proxy. Would that be tax free income? Same scenerio, buying a property in Canada and collecting rental income, but never coming to Canada at all. Does that mean that the rental income isn’t taxed? Canada taxes on residency, not citizenship. Everyone with sufficient residential ties to Canada can be taxed on their world income. One of the factors, although not the sole factor, is having a home in Canada, a spouse in Canada, or dependents in Canada….regardless of your citizenship status. It’s a complicated area and depends on individual circumstances but… Read more »
space889
Guest
space889

@Yunak – Yes, that’s the right attitude, but then again maybe Shaken isn’t up to her standards…When woman has lots of choices, just being slightly above average and 1/4 or even fully white isn’t going to cut it.