economy, opinion, politics, prices

Blame government for housing bubble

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53 Comments

House prices continue to spiral upwards as more 25-44 year olds continue to leave the city. So who’s fault is it?

One recent study says blame politicians:

Given their policies, Ley’s paper questions how politicians, particularly B.C. Housing Minister Rich Coleman, found it possible to argue in 2015 that Vancouver housing prices were “pretty reasonable” and that foreign ownership of property had nothing to do with government.

“Yet it most certainly did, for governments had for 30 years led trade and investment missions to Asia, and had used the tool of business immigration to draw in entrepreneurs and their capital.”

The inflated housing prices that have resulted in large part from new East Asian wealth are especially devastating for young and middle-aged Metro Vancouverites, Ley said in a recent talk sponsored by City in Focus.

A study by SFU researcher Andy Yan found that Metro’s university-educated adults earn the lowest wages on average in Canada’s 10 largest cities, Ley said. Many are “disillusioned” and leaving the city.

Read the full article over at the Vancouver Sun.

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Oracle

Garth should be sued by people he deliberately misled. Having people sell their homes under false pretences and having the funds invested with his company is fraud.

No different than Madoff.

These financial types need to be sent to jail.

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bestplaceonearth

“Garth should be sued by people he deliberately misled”

can’t do that. otherwise, the vhb, vreaa, vci all would be sued too the their very own readers and posters and pissers.

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space889

And yes, UBC IT grads are simply not qualified, nor are grad students from those Eastern Canada univs. They are all a bunch of incompent morons. Only competent IT peoples are from Russia and India.

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Captain

Don’t play dumb please? We are talking here about rich retards from China who bought their degrees along with the house and a couple of condos.

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space889

Wow, I didn’t realize that foreign purchasing activity can be estimated so easily with a poll of 77 rich Chinese in London, and US NAR estimate foreign buying data. Wow…really shows what a waste of $500K the fed gov’t is going to spend on this issue.

And I guess a Chinese born in Canada still counts as a foreign Chinese eh?

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Tiger

Vancouver man pleads guilty to helping Chinese hackers steal U.S. military secrets

http://www.vancitybuzz.com/2016/03/vancouver-man-military-secrets/

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paulb

New
220
Sold
236
TI:7911

http://www.paulboenisch.com

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space889

So 1/3 of the 236 sales – ~78 went to foreign Chinese buyers??

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Yunak

Pain and struggle for local families continues. Clear case of refugee crisis and yet no one cares. Do we need boatloads of people floating seas to start doing something?

Comments:

“We just got our eviction notice this morning as the owner of our house put it up for sale on the weekend and it sold this morning. We’re not going to have a fun time finding a house to rent for our large family. The foreign investors are now eating up North Delta. ”

http://bc.ctvnews.ca/one-third-of-metro-van-real-estate-investment-from-offshore-report-1.2831308

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BubbleTea

270 people held by Chinese authorities in crackdown on underground banking involving transactions of 900b yuan.
China started the raids on the underground banks last April after Beijing launched measures to tackle illegal money flows and crack down on corruption as stock market turmoil and a weakening yuan fuelled concerns over capital flight.
The Legal Daily reported in January that at least 207 billion yuan was channelled out of Guangdong last year through illegal money transfers – seven times as much as in 2014.
http://www.scmp.com/news/china/society/article/1930023/270-people-held-chinese-authorities-crackdown-underground-banking

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VanRant

Guess where the money is going. Garth and Crusty still denies it.

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voterm

The Government should,awe what’s the point!!!

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realist

Allen Garr at Vancouver Courier has written a brave article on offshore investment in Vancouver RE. Interestingly, the print edition is entitled “Money from China was, is and continues to be the problem with housing affordability”, but the on-line article is entitled “Foreign money continues to be culprit in Vancouver’s affordability problem”. Only so much truth can be exposed in at once…

http://www.vancourier.com/opinion/foreign-money-continues-to-be-culprit-in-vancouver-s-affordability-problem-1.2214542

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BubbleTea

University of B.C. geographer David Ley, “Vancouver and other cities face has been, and will continue to be, foreign investment — trillions of dollars coming now primarily from mainland China. It is virtually out of control and it’s undeniably the driving force in pushing up property values to obscene levels in every corner of Vancouver and causing a whole generation of people to consider leaving town if they haven’t already.”

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Shut It Down Already

Undeniably? Hah.

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realist

Ah, the irony! It takes American non-mainstream media, in the form of a SF-based financial blogger, to speak the truth about the Vancouver housing market… “Desperate Chinese Investors Flood US, Canadian Housing Markets, But Real Numbers Are Taboo” by Wolf Richter March 24 2016 http://wolfstreet.com/2016/03/24/chinese-buyers-invade-vancouvers-housing-market-study/ “So capital flight from China has turned into a tsunami. And this money has to go somewhere. The meme is this: These desperate buyers prefer a higher price because it’s more efficient for them to get their money out. This pumps up prices. Which impresses other Chinese investors, and they flock in ever greater numbers to those markets. American-Chinese businesses have sprung up to cater to them with special packages that take care of everything, including travel arrangements. The real estate industry, benefiting from higher prices and higher unit sales, has largely downplayed this trend.… Read more »

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Yunak

Some assumptions are plain wrong. The share of RE purchase by Chinese foreigners but also their local representatives must be way higher than this back-of-the-envelope calculation by NB, having in mind Chinese notorious propensity for secrecy, mendacity, impersonation and other types of misconduct especially when it involves corruption, scam and despoilment in China and money laundering in Canada.

“The estimated share of purchase volume seems high and we stress this methodology is truly a back-of-the-envelope attempt at gauging the significance of capital inflows from mainland China on the local residential real estate markets in Toronto and Vancouver,”

http://bc.ctvnews.ca/one-third-of-metro-van-homes-sold-to-foreign-buyers-in-2015-report-1.2831308

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BubbleTea

Even a 1% of foreign buyers is too much as it distort the prices. A whooping 33% of foreign buyers is mind boggling! How could Crusty and Justin turn a blind eye while our country sell our soul to a foreign interest who launder their dirty money through our real estates.

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patriotz

Trudeau is doing exactly what he said he would do during the leaders’ debate. I’m not saying I agree with that, just saying we are getting what we voted for. Mulcair immediately followed him and had the chance to offer something better, but he ducked the issue entirely, changing the topic to day care. Search for “foreign ownership”.

http://www.macleans.ca/politics/ottawa/tale-of-the-tape-transcript-of-the-globe-debate-on-the-economy/

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Ulsterman

A “third” is basically an invasion – i wonder what the previous generations of military veterans from Vancouver think they fought for?

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BubbleTea

Especially the Koren war vets that had to fight against the Communist Chinese and one day, their country will be invaded by the Communist Chinese with the blessing of those the people elected.

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Shut It Down Already

Invasion? Oh please.

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david

a third might very well be low. But it’s a real start… and a hell of an improvement over the “none at all!” that rubes like Gath Turner keep spewing.

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Maria

B.C. Real Estate Leader warns Christy Clark to use care in crackdown on ‘shadow flipping’

http://www.vancouversun.com/business/bc2035/real+estate+leader+warns+christy+clark+care+crackdown/11805073/story.html?__lsa=efe6-e8ad

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ScaryInSquamish

Check out this listing in Squamish.

https://www.realtor.ca/Residential/Single-Family/16706435/38083-HARBOUR-VIEW-PLACE-Squamish-British-Columbia-V8B0A5

Listed at $798,800. Last sold for $455,00 in 2013. and currently assessed at $576,000.

I don’t mean to pick on a listing – this one is just convenient because you can find previous sales data on BC Assessment. That said, it is representative of many listings in Squamish. Surely people can see the risk in this??? How much higher can bleh houses in Squamish go?

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Hyper-mega-Bull

the entire west side is ‘no go’ for locals. has been for years. the east side and north van are only for high earning professionals.

locals with regular jobs are now looking to the outer burbs, including bedroom communities like squamish.

it’s simple supply and demand.

locals are being pushed farther, and farther out.

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ScaryInSquamish

And I get that… but it is a looong drive from Squamish to Vancouver. I’d understand if Vancouver was booming with good jobs… but it isn’t.

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david

The mere fact that Vancouver is home to NO major corporations and higher-paying executive head office jobs is the smoking gun.

It isn’t even the seat of government, which entails lots of “legal but lacking any normal constraints” economic stimulus (ever looked at Ottawa? Eye opening.)

None of this has anything to do with legitimate economics whatsoever. And by the process of elimination, you end up exactly on the obvious explanation.

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bullwhip29

i’ve said in the past that Vanc is somewhat comparable to Portland, OR and certainly falls short of HK, LA, SF, NY and even Toronto/Montreal and Seattle in so many respects. what you’ve got here is a bubbly priced offshore ponzi-like shell company which no rationally minded person can figure out. i talk to a lot of tourists who visit here on a regular basis and the feedback is pretty consistent. while most would say it is nice to look at, the vast majority of them also can’t understand what all the fuss is about. there’s been chatter about bringing in other major league sports teams to this city, but quite frankly the market here is very limited and can barely support what is currently in place. the fact that many so called high end businesses, restaurants, entertainment, attractions and… Read more »

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david

Portland is a far better urban organism than Vancouver. FAR more character, community involvement, enjoyable weirdness, and a phenomenal entertainment scene….the food trucks and microbreweries in Portland alone equal Vancouver’s legal & “other-than-cash” economy.

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Ulsterman

I’ve considered Squamish too because i go to Whistler frequently and there’d be some benefits to being halfway between the Vancouver and Whistler. BUT, 800k for a house in fucking Squamish – it’s bloody absurd. I’m sure many of the recent buyers were holdouts from Vancouver who finally decided to suck up the 45-60 minute commute because they’d been defeated by this housing market. It’s (un)funny to watch how the line people draw in the sand as to what they’ll tolerate gets further and further away from what they’d previously considered acceptable. Desperate times call for desperate measures.

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Hyper-mega-Bull

white ppl pay a premium to be around other white ppl.

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bullwhip29

also plenty of speculators and hot money there too. many bought pre-olympics and then again as word that a new ski resort would be approved in area. i know a few that are finally breaking even now. expecting the same on the sunshine coast as plans for a bridge connecting them to mainland get bandied about and eventually rammed through. ultimately anything with a view that is 30-60 minutes drive (vs ferry ride) from Vanc will be bought up

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Shut It Down Already

You mean locals decided of their own free will to overpay and overextend themselves? Is it not possible to somehow conjure up an alternate reality where Chinese can be blamed for Squamish prices, perhaps using the world “trickle”?

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Oracle

Some very intelligent people here. Good posts. As a visible ‘minority’, I have always suspected change will come when Caucasian Boomer offspring are priced out of rental accommodations in Vancouver. That’s when the kids will whine and the parents will realize that maybe high housing prices are not a good thing after all. As for the cause of he high house prices , it’s the temp immigration system (students, 10 yr visitor visas, etc) that are the cause. For example students have to be rich to afford tuition and going to “school” enables the family to get into Canada. They are purchasing and bidding up properties on anticipation they will get in. The whole international student program is being rolled into the Crusty gov and will be overseen by her friends. And don’t anyone dare suggest it’s other causes. We… Read more »

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bullwhip29

yup, horses left the stable a long time ago. only further densification keeps regular dick and janes in the game. boomer offspring have to be content living WITH their parents either in same house or laneway home OR living OFF their parents by inheriting RE or gift of DP for their own micro-space. at some point people will be saying same thing about universities and how their kids are either being priced out or left behind as entry requirements become too difficult to meet. for that matter, any desirable service or amenity that everyone currently takes for granted simply wont be available to the masses going forward due to increasing costs and/or limited availability.

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Yunak

“Therefore, one solution is to end foreign student enrolments and all other temp immigration programs.”

The whole credibility of “University” should be questioned. How rich “students” even qualify and later on even earn their “degrees” if they aren’t even capable of speaking basic English or being employable by any western standards. Money should not be a measure of one’s capability and talent if basic (mental) requirements aren’t met.

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Best place on meth

“Therefore, one solution is to end foreign student enrolments and all other temp immigration programs.”

No need to end ALL foreign students, just the ones from china.

Ban all people from china.

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david

National Post:
” National Bank real estate analyst estimates that one third of Vancouver sales are to offshore Chinese”.

It’s not a rigorous statistical study, but still a MAJOR departure from the tired insider denials.

In every cabal, there’s always one or two “partners in crime” who don’t get quite as much as the others, and who eventually rat the racket out.
Among all the mortgage lenders in Vancouver, I could see National Bank as one that might be disappointed in the share it has been getting….

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Ulsterman

I wonder how Garth Turner will spin this National Bank article? He’s becoming more and more like Chemical Ali of the Iraqi army, denying the American victories as the tanks were rolling into Baghdad. In our case we just have suitcases of Yuan rolling over Vancouver.

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Zero Down Forty

It’s the media that is doing the spinning. Read the article. It does not say 1/3 of sales are to offshore buyers like the headline misleadingly states. The press release claims that 1/3 of the dollar value of sales are going to offshore Chinese ($12 billion out of a total of $36 billion). Out of the 45,000 home sales last year in Metro it would only take a few high end home sales to reach 1/3 of dollar value. For example, 3,000 sales of homes sold for $4 million equals $12 billion. – or only 6% or 7% of total sales. Offshore sales have been claimed to be in the 5% rage in previous claims printed in the media from various organizations, so this is not news. They are just spinning numbers a different way. Whether 5,7 or 10% is… Read more »

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Shut It Down Already

Please, don’t confuse the racists.

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david

Who’s the most likely to shout ‘racist’ in a raging housing bubble?
Realtors and idiots (the first group can often be in the second) .

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BubbleTea

Justin does not need to spent half a mill on foreign buyer data, just ask NBC. “Buyers from China comprised about one-third of purchases of Vancouver’s hot housing market in 2015, according to “back of the envelope calculations” by National Bank of Canada.”

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bullwhip29

no, he is just killing two birds with one stone by appearing to respond to concerns from the public and gifting $500k to a close associate (who will have to return favor)

“Some day, and that day may never come, I will call upon you to do a service for me. But until that day, consider this justice a gift…” – Don Corleone

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Royce McCutcheon

Whoever it is, perhaps they have juice with both the current and previous federal governing parties, as the quote for the cost of the analysis is identical to what was proposed by the previous PM.

http://www.cbc.ca/news/business/conservative-pledge-to-collect-data-on-foreign-homebuyers-gets-mixed-reception-1.3189689

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patriotz

What foreign ownership has to do with government is that the tax and regulatory regime that government has set up for the benefit of domestic homeowners is being taken advantage of by foreign owners. In other words, government has made RE in Canada, and BC in particular, an attractive place for both locals and foreigners to park their wealth.

What prevents this from changing isn’t that the government cares about foreigners, who don’t vote, but about Dick and Jane Homeowner, who do.

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bullwhip29

as should be abundantly clear now, the votes that can be purchased by HAM and RE/banking cartel will trump the voices of the Dick and Janes of the world. if the system is as corrupt as i believe it is, horgan and the ndp have no chance in the next election. this would explain why chrusty is becoming more and more comfortable acting in such a brazen and sleazy manner right out in the open.

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patriotz

It’s the votes of the Dicks and Janes that are being bought. It’s the ordinary homeowners who are the obstacles to policies to moderate RE prices, not the banks and not foreigners.

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franko

There’s a huge difference between locals and foreigners regarding their investment objectives. Foreign owners don’t give a damn about the community and are allowed to milk the system that has taken local taxpayers many years to create.
It’s just a matter of time for politicians to understand that most of the boomer type homeowners (which I am one of) are more concerned about their kids and grandkids never being able to own a house in their community. They are more concerned about preserving their culture than increasing their locked-in wealth that is useless to them as long as they need a place to live. And forget about first timers. They have no hope in hell.
Too bad that politicians only learn when the rage and anger gets expressed at the polls.

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Royce McCutcheon

I am thankful for your sentiment towards what this does to younger locals, but don’t you think human nature is going to work against this point of view being widely held? In the harsh light of reality, if people are faced with the choice of losing future generations of locals versus endangering (theoretical) money that numbers in the hundreds of thousands or millions, don’t you think many of them will pick the second one? I’m referring even to people with offspring in the region, who they presume they will be able to support with their (theoretical) windfall.

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Ulsterman

Royce they’ll pick the second. The exodus of young people is only just beginning because i figure townhouses and houses were still accessible to those aged in their 30s and 40s who bought and built up some move-up equity. Now were are facing a generation of school and university leavers who simply have no chance of getting in beyond a condo. The differential between condos and the next rung up the ladder is now so big as to be effectively broke. I think these people are the first group who will be priced out en masse. The problem with worrying about whether your kids can ever buy or not is that for many it is so far into the future that it can be swept under the rug so why take painful action today when you can kick the tricky… Read more »

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Bestplaceonearth

Yep, I want a detached house, and nothing else. Condo life is not for me, I deserve better, cuz I am a under grad.

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