Restrict foreign buyers of Vancouver real estate?

Yesterday we posted about the record debt levels of Canadians – most of that growth happening in mortgage and line of credit debt.

Some people think low interest rates and CMHC backed mortgage debt is to blame for high house prices, while others blame foreign buyers in cities like Vancouver and Toronto.

Would you support restricting foreign ownership of property the same way they do in countries like Mexico, China and Australia?

Some people certainly would. This petition on change.org has grown by more than 10,000 signatures in the last few days and is currently at the top of todays active list on that site.

Here’s the link to the petition if you support this idea – how many signatures do you think it would take to get politicians to support limitations on foreign buyers and how would they convince home sellers that this is a good idea?

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crabman
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crabman

“Some people think low interest rates and CMHC backed mortgage debt is to blame for high house prices, while others blame foreign buyers in cities like Vancouver and Toronto.”

This plot proves that recent gains have been driven by the high-end of the market.

https://pbs.twimg.com/media/CEViTGEVEAAJat3.png:large

Still waiting for a reasonable explanation of how this would happen if not for foreign buyers.

Charlie
Guest
Charlie

The way those that are deliberately-trying-to-confuse talk, you’d think we’re taking about two hockey teams! It aint support one or the other.

The two concepts, Cheap Credit/ CMHC and Foreign investment are NOT mutually exclusive – no matter how hard some (particularly on here) try to inexplicably depict it that way.

The only real question is how much of a difference over and above cheap credit does foreign investment contribute to the insanity. I happen to think the ponzi-scheme is unsustainable without it. But cheap credit still plays its part – obviously.

Royce McCutcheon
Member
Royce McCutcheon
“How many signatures do you think it would take to get politicians to support limitations on foreign buyers?” If that thing doesn’t clear 50k verifiable signatures from the Lower Mainland alone, it won’t even start a conversation here. At best, it’ll get some thoughtful chin scratching, nodding, and promise for further study. “…and how would they convince home sellers that this is a good idea?” They wouldn’t. They won’t. Ask yourself: would you be at all responsive to any discussion – no matter how constructive, well reasoned, etc. – that would decrease your net worth by hundreds of thousands or even millions of dollars? Nope. A record percentage of the population is participating in this market – and works in fields related to real estate – and each participant has a huge vested interest in seeing prices stay at their… Read more »
Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

The empty $2-million house next door

Richmond couple wants to talk to their neighbours about trimming a hedge, but nobody’s home…ever

http://www.theprovince.com/news/vancouver/Richmond+couple+wants+talk+their+neighbours+about+trimming/11047453/story.html

remember, HAM is only active in the high-end of the market. apparently that now includes the city of Richmond.

Royce McCutcheon
Member
Royce McCutcheon

@1: “Bear capitulation”

Prices are climbing inexorably, it seems. Interest rates touch to a record low. And all those people who bought condos many years ago are looking at these factors and the widening gap between the appreciation of what they’re holding and the place they actually want.

This completely describes some couples I know, perhaps with a baby on the way or kids in tow already, earning in the 150-200k range, with 150k-400k equity in a condo or townhouse purchased 5-10 years ago.

And, for the love of god, I’m not suggesting foreign money isn’t a factor in the high end of the market too.

I’m just saying that I have seen this happening more in the last year or so than in preceding years. It’s quite common.

crikey
Guest
crikey
Thread said: “Some people think low interest rates and CMHC backed mortgage debt is to blame for high house prices, while others blame foreign buyers in cities like Vancouver and Toronto.” As I have said before, the two ideas are not mutually exclusive. In fact, they go hand-in-hand! Richer foreign buyers outbidding domestic buyers in a market puts pressure on the domestic buyers to borrow increasingly larger amounts. The powers-that-be don’t want the bubble to burst (and for elections to be lost), so they lobby for and get the ballooning of CMHC limits and prolonging of low interest rates so that the domestic buyers can try and keep up. Meanwhile, as I have also mentioned in an earlier post, the large sum of money brought into Canada for even a single home purchase perculates through and effects a large number… Read more »
Royce McCutcheon
Member
Royce McCutcheon

@6: Sorry, just to be clear: you’re saying that foreign investment is at the root of the price appreciation that’s been observed across this country over the last dozen or so years? I’m referring to the doubling or tripling of prices in nearly every Canadian city on identical timelines here (with some cooling occurring recently). That is primarily a knock on effect of foreign purchases, particularly in Vancouver and Toronto?

crabman
Guest
crabman

@7: The timelines aren’t identical. There was a huge run-up in prices in several cities before 2008. Since then, prices in Vancouver have paved a path of their own.

http://pacificapartners.com/blog/wp-content/uploads/2012/07/Is-Canada-in-a-Real-Estate-Bubble.png

I’ve been arguing that “Phase 1” (pre-2008) of the bubble was driven mostly by easy financing, but now we’re in “Phase 2” driven mostly by foreign buyers.

DaMann
Member
DaMann

So here is a question. If higher taxes or fees for foreign buyers doesn’t really do anything to the market ( Australia) then why don’t we do it just for the revenue? We owe foreign investors absolutely nothing so why not fleece them? Let’s grab as much cash out of them as possible. What are the politicians afraid of? Who doesn’t want more revenue in the Gov. coffers at no expense to the citizens? They don’t have to worry about votes because they don’t vote anyways! So any reluctance on any level to do so tells me foreign ownership IS an issue and the politicians don’t want to touch it.

UBC in crisis mode
Guest
UBC in crisis mode

It is the market deciding the price a house in Canada, particularly in Vancouver. There are tooooo many millionaires in other countries, and we just do not have enough houses:

http://www.cnbc.com/id/101995843

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

‘Dirty cash’ seizures on the rise as Ottawa cracks down on money laundering
Last year, border officials reported 1,429 seizures and confiscated $24.5 million of undeclared currency at the border, up almost 30 per cent since 2013.

http://www.thestar.com/news/immigration/2015/05/10/dirty-cash-seizures-on-the-rise-as-ottawa-cracks-down-on-money-laundering.html

patriotz
Member
“Would you support restricting foreign ownership of property the same way they do in countries like Mexico, China and Australia?” Certainly not the way they do. Mexico restricts direct ownership of property near the coast. This simply creates a business opportunity for locals to set up trusts which can own. http://www.blueroadrunner.com/ownprop.htm China is a communist dictatorship and nothing they do is a model for us. There is no private ownership of land in China in the first place. Oz’ “restrictions” are a joke, they allow foreigners to buy new properties only. Do you think that kind of “restriction” would have any impact on houses being torn down and ugly ones built in Vancouver? The foreign buyer would just get a local builder to buy the old house and sell the new house to them – which already happens anyway. I… Read more »
Oracle
Guest
Oracle

Hello, I’m back.

Just wanted to point out that the Green Party Leaders best friend is supposedly Lisa Rait (A Con MP). She rescued Elizabeth may from disaster.

The Greens are there only to split the vote.

The NDP will get more coverage from corporate media to split the vote. Secretly, the Cons support the NDP in certain ridings.

The Libs will lose part of their vote to the above two parties.

The right is united and will win.

say whaaaa?
Guest
say whaaaa?

@9

How dare governments take a cut of the money launderers proceeds? /sarc

I agree with you completely however I would suggest that property developers and realtors would howl at the potential loss of business, and the developers pay/own the politicians (see Cheng Muyang for a recent local example, or see John Baird as a national example; both are absolutely appalling and thoroughly shameful IMHO).
Long story short: I won’t hold my breath.

Slagathor
Guest
Slagathor

…..We owe foreign investors absolutely nothing so why not fleece them?….

You think charging them $2M for a Dunbar tear-down isn’t fleecing them?

Slagathor
Guest
Slagathor

….I would advocate @9’s approach, simply levy a major property tax surcharge on any property whose owner isn’t paying an appropriate amount of income tax…..

What about Grandpa who’s been living in Dunbar for 40 years and living on a meager (i.e. low tax) pension (on a lot worth $2M)?

Slagathor
Guest
Slagathor

…Last year, border officials reported 1,429 seizures and confiscated $24.5 million of undeclared currency at the border…

Sorry, I didn’t read the article. How much of that $24.5 million did they simply give back?

patriotz
Member

@16: “What about Grandpa”

You exempt him because his past income justifies the price he paid.

Duh.

franko
Member
franko

@9

” We owe foreign investors absolutely nothing so why not fleece them? Let’s grab as much cash out of them as possible. ”

I hit the thumbs up for that until my finger got numb.

DaMann for PM!

paulb
Member

New Listings 327
Price Changes 89
Sold Listings 281
TI:13224

http://www.paulboenisch.com

vangrl
Member
vangrl

I’m up for #9’s idea, it seems like the only one remotely plausible.

Unfortunately that may not help with affordability issues, lack of rentals, tearing down of perfectly acceptable houses, ghost streets, flailing local businesses, young people leaving Van cuz they’re sick of high housing costs etc….

If it was raised so high that it became a deterrent to buy for say 50% of them, well then…

It is pretty impressive that we have 17,000 votes. I’m kind of hoping that just running the petition may have an effect on those that are on fence about investing here. If it could end at 44,440 all the better.

history
Guest
history

Bond god Jeffrey Gundlach, the CEO of DoubleLine Capital, is bearish on single-family homes. Gundlach said single-family housing is “over-believed and over-rated.” His trade is to short XHB Homebuilders ETF.

http://www.businessinsider.com/jeff-gundlach-on-us-housing-2014-5#ixzz3Zyj87ELc

i came across this link following a lotta noise on the web tonight about lumber prices collapsing…

Enoughalready
Guest
Enoughalready

More denial BS from garth

http://www.greaterfool.ca/2015/05/12/the-frauds/

he should spend one week-end at the open houses on the Westside or West Van watching the convoy of Mercs SUVs being taken round straight from the airport to view ‘homes’ except they aren’t homes but money exporting assets.

he should fly out here and see the huge real estate ads in the airport in ONLY one language and it isn’t english!

He is so full of shit it stinks on the West Coast

Shut It Down Already
Guest
Shut It Down Already
Wearehere
Guest
Wearehere

@ 21

I wish that was true vangrl, but those investing here don’t give a rat’s ass about paying taxes or our laws , why should they care about our opinion?

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