Government complicit in fueling housing crisis

A recent report out of SFUs school of public policy is generating headlines that are rather extreme:

Foreign buyers crushing Vancouver home dreams as governments do little.

“People recognize what’s going on, and they’re willing to call a spade a spade,” he said, stressing that such views are based on reality, not racism.

His report compiles a number of other studies, including data on home-buying trends, population density, the cancelled immigrant investor program, and American research on the same issue.

Gordon said his report blames Vancouver’s housing crisis on foreign buyers, particularly from China, because “this is where the evidence points, not because of some anti-Chinese animus.”

Chinese investors have also spiked home prices in the Toronto region, but Vancouver has seen the highest rise in real estate due to the influx of foreign money reaching an unprecedented level in the last year, he said.

Gordon noted that other countries, including Australia and Singapore, have created policies for foreign homebuyers to protect their own citizens but that hasn’t happened in Canada.

Read the full article over at the CBC.

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tokyoman
Guest
tokyoman

super simple answer. audit and investigate a few big ones, then enact civil forfeiture after ascertaining they were bought with dodgy funds, storm will ensure and all rats will leave the ship. and by the way the premier who does this needs to wear a bullet proof vest…

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southseacompany
Member
southseacompany

“MOODY’S: Normal interest rates are history”, Business Insider

http://uk.businessinsider.com/moodys-report-normal-interest-rates-may-never-come-back-2016-5

“Remember interest rates? Moody’s, the credit-rating company, does.”

“And, according to Moody’s managing director Colin Ellis, there’s a good chance that they’re not coming back. At least not at the levels we became accustomed to before the 2008 financial crisis.”

bullwhip29
Guest
bullwhip29

regarding the new citizenship disclosure required on Property Transfer Tax forms…

>>> what difference will any of this make if purchase done through bare trust using local nominees?

space889
Member
space889

Hence why I prefer the much simpler and more societal beneficial (well assuming the gov’t is working for the people) of simply taxing the heck of these type of purchases, with additional tax if it is not rented out. Foreigners and bare trust can’t vote, and we certainly could use the $$$ for healthcare, education, paying down the debt.

Combat roach
Guest
Combat roach

It’s not Vancouver but close…

“There are signs that the market is cooling off after feverish buying activity that has lasted as long as four years.”

http://m.huffpost.com/ca/entry/9897800

bullwhip29
Guest
bullwhip29

more like Vanc is not SF (or Seattle), not even close. SF has HAM and a booming tech based economy. Vanc is really a knockoff of Portland at best and just pretending to be a world class cosmopolitan city. obviously too many here totally drunk on the west coast opiate infused coolaid to notice and/or falsely believe financial windfalls reaped from being long RE due financial saaviness versus dumb luck. vancouver without a booming RE mkt would be worse off than Alta currently is.

bullwhip29
Guest
bullwhip29

best comparison to present situation in Vanc is Miami/South beach housing bubble. not apples to apples but certainly many similarities.

bullwhip29
Guest
bullwhip29
space889
Member
space889

Ever considered that maybe those officials don’t like British monarch very much?? Or care about this old figurehead lady? Or the shit her gov’t did with opium, unequal treaties, and HK.

Combat roach
Guest
Combat roach

Lol, what she was expecting, cool gentlemen?

I\'m With Stupid V
Guest
I\'m With Stupid V
bullwhip29
Guest
bullwhip29

Hong Kong’s Bluesky buys InnVest REIT for $2.1 billion, winning stake in Canada’s most historic hotels
http://business.financialpost.com/news/property-post/hong-kongs-bluesky-buys-innvest-reit-for-2-1-billion-winning-stake-in-canadas-most-historic-hotels

space889
Member
space889

A lot of those hotels look like they need some serious renos, or maybe just put out of their misery.

But hey, it’s a HK company, not mainland so it’s a-OK! Notice the silence on this by team BPOM. If this was that Anbang, man, they would be so up in arms now.

bullwhip29
Guest
bullwhip29

who’s to say anbang doesnt buy bluesky? just sayin…

bullwhip29
Guest
bullwhip29
bullwhip29
Guest
bullwhip29
bullwhip29
Guest
bullwhip29
bullwhip29
Guest
bullwhip29
southseacompany
Member
southseacompany

“CMHC’s Housing Exposure Is Steadily Being Hiked Back, Report Shows”, Huffington Post

http://www.huffingtonpost.ca/2016/05/10/cmhc-housing-exposure-report_n_9878928.html

“The Financial Post noted that Siddall, who started as (CMHC) CEO in 2014, has focused on limiting the corporation’s exposure to the housing market.

To that end, he increased insurance premiums by 15 per cent in 2014 and then hiked premiums on mortgages whose down payments were less than 10 per cent the following year.

His actions came as federal government officials became increasingly concerned about how much taxpayers were exposed to housing markets such as Toronto and Vancouver, which experts have said are overvalued.”

southseacompany
Member
southseacompany

“Canadian Interest Rates To Rise As Banks Turn Riskier Than U.S. Ones”, Huffington Post

http://www.huffingtonpost.ca/2016/05/10/interest-rates-canada-banks-risky_n_9890600.html

“With earnings plunging in the oil patch and Canadians holding record levels of debt, the country’s banks are turning riskier, and that means higher borrowing costs ahead.”

‘Fitch ratings agency “expects the cost of credit to rise in Canada as banks feel continued pressure” in the tougher new economic climate, the company said this week.”

MikeS
Member
MikeS

So nobody has anything to say about what the Liberals are doing about Shadow Flipping?

space889
Member
space889

Given how the BC Libs are in bed with RE industry, I don’t really expect much from this action. The buyer can always strike out those clauses in the offer. So simply, sell the one minute after closing to a 2nd buyer for the same price and other considerations.

I think the only reason we got this rule was the local non-Chinese realtors felt left out of the gold rush. Pre-sale condos assignments were the rage back in the day too, until developers got smart and demanded their pound of flesh. And then crash happened.

Combat roach
Guest
Combat roach

Nothing, they enjoy a collective orgasm while it lasts.

paulb
Member

New
376
Sold
168
TI:8549

http://www.paulboenisch.com

Newcomer
Member
Newcomer
space889
Member
space889

Ok but when will it crash down? And how will that affect RE values here? Is it going to cause an even bigger flood of money coming into local RE??

Madashell
Guest
Madashell

London: “Housing bubble ‘has burst’ as sellers slash asking prices by average of £25,265”
Hong Kong: “Hong Kong Housing Bubble Suffers Spectacular Collapse: Sales Plunge Most On Record, Prices Crash”
Vancouver: To come….

space889
Member
space889

Really?? Seriously? Avg price cut of 25K means bubble has burst?? Really?? Have you seen London prices? That $25K is like a rounding error.

Madashell
Guest
Madashell

London: That is 10% off the recent price and its just the beginning. Wait until the panic sets in and boom! Same goes for HK.

space889
Member
space889

You telling me an average flat, say 500 sq ft, in city of London only costs ~250K pounds or ~$600K CAD??? Really?? Seriously dude??

Newcomer
Member
Newcomer

HK has been off it’s highs for six months but it’s still not crashing.

Madashell
Guest
Madashell

Patience my friend, housing crash takes much longer and sometimes up to a couple of years when over leverage seller panics and start to dump or walk away

space889
Member
space889

Ok, so let’s say it plays out in 3 years and this is the high point, so in 2019/2020 prices might be back to say 2014 prices?? Which is still bloody high and over priced!

Yes, wages may go up, but you know what? Taxes will probably eat up 100%+ for the raises, and that’s before inflation sets in. So you aren’t better off in any way, maybe even worse off.

So basically, it’s you are screwed if the market keeps going up, and you are screwed even if market falls. Unless you believe there is a 80%+ style crash at the end of that 3 – 5 years.

Royce McCutcheon
Member
Royce McCutcheon

Would that it twere so simple…
https://www.youtube.com/watch?v=kGpsXuMvApo

Raincity
Member
Raincity

proof?

BubbleTea
Guest
BubbleTea

Panama Papers: Chinese dominate list of people and firms hiding money in tax havens, Panama Papers reveal.
I am sure a lot of them have empty houses in Vancouver.

Madashell
Guest
Madashell

Wondering how many of these empty homes are purchased with a LLC company or a shell company based in a tax heaven with the actually purchaser’s identity hidden. Case of dirty money laundering with the blessing of Krusty and Justin.

space889
Member
space889

Well don’t worry, neither the Fed nor Provincial Lib gov’t will investigate or seize them as proceed of corruption as per requests from China.

bullwhip29
Guest
bullwhip29
bullwhip29
Guest
bullwhip29

more evidence that the world of banking is gone completely bonkers…

american express reducing interest rate on my credit card to 1.99% for the next 12 months. purchases still eligible for 1.25% cash back. losing the deal with costco must be hurting them bigtime.

space889
Member
space889

Isn’t what credit cards companies do all the time?? Heck, I used to get 0% from MBNA all the time before Scotia bought them. Now, it’s only 1.99% or 2.99% + 2% or 3% processing fee!!

I still miss Amex term loans of up to 60 years at 4.99% or so interest rates. That’s was pretty good for unsecured debt, especially if you turn around and invest it.

bullwhip29
Guest
bullwhip29

difference is that this is not promo to do balance transfer, just an offer to rack up a balance on a card I already have

space889
Member
space889

The offers I get, you can do a balance transfer or simply write a cheque to yourself. They don’t care how you take the money. So, I don’t really see the difference here.

Regardless though, once you add that 1% to 2% handling fee, the interest rate suddenly isn’t too great. Still can make some spread investments, but not without risks.

bullwhip29
Guest
bullwhip29

what handling fee?

space889
Member
space889

Well, in the very small print at the bottom, they tell you that there is a separate fee for actually taking advantage of the low interest rate – either balance transfer or just straight cheque deposit to your bank. It used to be about 1% to 1.5% with a min of like $25 for each balance transfer or cheque. This amount is added to whatever amount you are borrowing. So if you have a $5K limit and the fee is $1%, the most you can take out is $4950.

MBNA recently bumped that up to like 2% or 2.5% with min $50 charge I think. So, once you include that, most deals aren’t actually nearly as good as the advertised 1.99% or 2.99% rate. Heck, for the short 6 months offers, it’s terrible.

bullwhip29
Guest
bullwhip29

this offer applies to purchases only

space889
Member
space889

Really?? that would be the first time I’ve seen it then….

bullwhip29
Guest
bullwhip29

rate on purchases 1.99%, cash back at 1.25%
only way they could be even more slack is if no minimum payments for a year too.
http://tinyurl.com/j2rtt3m

bullwhip29
Guest
bullwhip29

Deal of the century: Expo 86 land purchase changed Vancouver
http://www.cbc.ca/news/canada/british-columbia/expo-86-china-business-vancouver-1.3560255

http://i.cbc.ca/1.2895774.1453153828!/cpImage/httpImage/image.jpg_gen/derivatives/16x9_620/li-ka-shing.jpg

>>>deal of the 21st century will be sale of port of vancouver lands imho. investors win, residents of tsawassen/white rock/surrey lose

space889
Member
space889

What’s that saying? Those who don’t learn from history are bound to repeat it?

Or maybe I’m not giving our politicians enough credit. Maybe it’s not that they are dumb, they are just simply easily & cheaply bought….

marble
Guest
marble

It is never cheap. Milllion-$$$ bearer bonds can be deposited on the other side of the Pacific Ocean with no questions asked.

space889
Member
space889

Are the local politicians that smart yet?
One thing though is that since there is no western style election, there isn’t a lot of “overhead”, unlike here. I mean Donald is planning to raise $1B for his presidential campaign. Just for him, never mind how much all those SuperPACs, congressman, senators, etc are going to spend!

That’s a crazy amount of $$$ for supposedly democracy. Even our local civic elections are now running into tens of millions spending by the candidates. So maybe, it’s not so much politicians sell them cheap, but just rather how the $$ is spend. Which doesn’t change end result.

Politicians work for those who pay up $$$, not the voters.

bullwhip29
Guest
bullwhip29
space889
Member
space889

Every time I look at this picture, I think he would be a perfect ladyboy for BPOM. I’m not sure why but I just get the feeling BPOM, and maybe rest of his team, would be so into this type of thing.

bullwhip29
Guest
bullwhip29
southseacompany
Member
southseacompany

“Interest rates may never reach pre-crisis levels – Moody’s”, Financial Times

http://www.ft.com/fastft/2016/05/10/interest-rates-may-never-return-to-pre-crisis-levels-moodys/?ft_site=falcon&desktop=true

““Lasting scars” left by the Great Financial Crisis will mean central bank interest rates may never return to levels seen before the crash, Moody’s says.”

patriotz
Member

What the feds should do about regional housing froth: nothing
I’m not endorsing all the premises of this article, but I think people in Vancouver (and Toronto) need to be aware of what the rest of the country thinks. It isn’t just about you.

space889
Member
space889

Just tax the foreigners and empty units, with a luxury surtax on property sales of over $2M and paid down our gigantic provincial debt. That would be rationale thing to do in housing bubble, especially one that has significant foreign $$ inflow. But no…..our glorious BC Libs would never do something as easy as that for the benefit of everyone in the provincial. nope, gotta make sure the developer buddies and backers can rake it in as much as they possible can. People of BC be screwed.

And people like BPOM think Chinese official and system are corrupt. At least, the Chinese officials can be charged and put in jail. Good luck here where bribery, *cough* I mean campaign / political donations, are all legal.

bestplaceonearth
Guest
bestplaceonearth

why would people in vancouver and toronto give a damn of what the rest of the country thinks about their housing situation?

patriotz
Member

Of course, they both have enough population to determine the outcome of their respective provincial elections, and provincial governments have more than enough power to handle the housing situation regardless of what the feds do.

Right?

Bear Vancouverite
Guest
Bear Vancouverite

Patriotz, I think your contributions would be more clear and valuable if you stated what you want rather than couching it in questions whose answers I personally never can guess at. Yes, some of us are just that thick. so please try to spell it out for us.

patriotz
Member
For the benefit of those with poor memories, I will repeat these things which I have already said explicitly on this board many times: – An end to government backed mortgage insurance. I know this isn’t going to happen, so at least bring in limits comparable to those in the US. – Imputed income taxation, i.e. a tax leveled on any property whose owner (whoever or whatever it is) has not been paying income tax appropriate to the purchase price. – An end to property tax deferral. If you can’t pay the taxes on a property, you can’t afford to own it. – A renter’s tax credit which requires all renters to identify landlords and amount paid. – A higher tax rate on luxury properties (which BC cities currently do not have the power to impose). – A tax surcharge… Read more »
123
Guest
123

As long as those things are in place Patriotz, including a non interventionist stance on foreign money, then the govt has a moral obligation to tame the beast that they themselves created.

patriotz
Member

Those changes are what I think the government should do to bring the RE market under control. Anyone can dress up their wishes under “moral obligation” if they want, but that does not make them any more valid than anyone else’s. I care not to.

Do you disagree with them or have anything to add?

123
Guest
123

I disagree with the original article….rates are too low. Also, they do have the ability to come up with regional policy but I think their earlier attempt at targeted mortgage rules didn’t go nearly far enough. In addition, no foreign money in residential real estate.

space889
Member
space889

really? When I brought up basing social benefits based on assets & income instead of just on income, I was blasted by people on this blog, including you, about how that would be unfair to local retirees who paid taxes their entire life, etc, etc….

I guess you would exempt people who sold a $5M house and bought a $2M house? And btw, a lot of these people can legally bring in say $10M in assets into Canada, so it’s totally legit as far as CRA concerned for them to purchase a $5M house.

Unless you believe in a general asset based tax, this is going to be a non-starter, just like ending CMHC.

123
Guest
123

Actually Patriotz, you endorsed it enough to post it….and that says it all

123
Guest
123

……then we get rid of all intervention CMHC, BoC artificially low rates homeowners grant etc. and *then* we’ll see what happens

bullwhip29
Guest
bullwhip29

I wonder if the Liberal Party buys up every copy of this and hands them out for free come election time? (maybe with $100 bills slipped inside?) What is perhaps the most mind boggling part of all this is that the author somehow managed to stretch this out over 416 pgs and expects to sell this in hard cover coffee table book format for $30 a pop. As if…
https://www.amazon.ca/Christy-Clark-Behind-Judi-Tyabji/dp/1772031062

https://images-na.ssl-images-amazon.com/images/I/51EpPUz964L._SX320_BO1,204,203,200_.jpg

space889
Member
space889

Judi Tyabji, isn’t she the MLA that Gordon Wilson had an affair with and ended his BC premier dream??

bullwhip29
Guest
bullwhip29
bullwhip29
Guest
bullwhip29
http://vancouversun.com/business/local-business/chinese-provincial-delegation-seeks-more-business-with-b-c my spidey senses went off when chinese bought the sechelt country club (with ambitious plans to turn area into tourist region) and some of the most expensive properties in the port mellon area. i’ve also heard anecdotal evidence that offshore buyers have literally gone thru the entire sunshine coast region with a large vacuum and scooped up EVERY detached home with a half ass liveable house on it <$500k all within the last 4-6 WEEKS. remember this is an area where it typically took many months, if not years to get an offer. an agent i keep in touch with confirmed the story also told me one guy bought 40 houses site unseen in one weekend. chrusty and co are currently "exploring" the idea of putting in a multi-billion dollar fixed link. imho, it is a done deal, friends… Read more »
space889
Member
space889

That’s how it usually goes, isn’t it? Hence why the best investment one can ever make is a political bribery…err…I mean political donation!!! No, no, those are not bribes!

bullwhip29
Guest
bullwhip29

Chinese-language reality show about high-end real estate might be coming to Vancouver

“The trailer is titled Gold Broker and prominently features local real estate agent Chris Lee showing prospective home buyers luxurious properties in Vancouver. Sprinkled throughout the trailer are b-roll shots of Vancouver scenery.”

https://youtu.be/dHkt2R5Zw5Q

space889
Member
space889

Wonder if any of those Ultra Rich Asian Girls of Vancouver will make a guest appearance??

Yunak
Member
Yunak

If I were you (but seriously) I would find one of them and ask for a date. You can’t lose anything, might actually be surprisingly successful in your attempt to land a good looking and wealthy girl instead of posting on the dating sites. At the end of the day, they are just regular girls which happened to have some extra money to spend around and you can definitely beat them with your charm and persistence. Keep in mind, those who manage to seduce girls aren’t the prettiest or wealthiest ones but those most persistent ones.

space889
Member
space889

Well, if I take even the ugly and bitchy ones then who will you losers date?? Yellow fever can get pretty dangerous if left untreated, and being disposable boy toys for those bitchy & ugly girls might be your last hope. Assuming you meet their physical standards.

bullwhip29
Guest
bullwhip29

you should know by now that the bitchy ones are usually the hottest ones (and they know it)
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/04/20/vanc%204_0.jpg

space889
Member
space889

Uhm…none of them are hot though…maybe average if that center girl is like 35 to 40.

Yunak
Member
Yunak

I’ve tried to be nice but you are lacking the basic upbringing and fundamental social skills to conduct a meaningful conversation. Well, I will credit that to the rough childhood in China and lack of time to adapt when moved to civilization.

space889
Member
space889

If by nice you mean bullying through sarcasm, indirect insults, and racists remark, then no I don’t have that kind of upbringing or education.

Though I do give you credit that it is hard than just calling people name, so it is an improvement for you.

And hey I’m being nice too…I worry about your health. But I guess you are too self-center & absorbed to see the caring I have for your poor souls.

bullwhip29
Guest
bullwhip29
bullwhip29
Guest
bullwhip29
Combat roach
Guest
Combat roach

It’s been told many times here but usual assholes keep denying it and pointing on racism…

Vancouver is Chinese Alcatraz run by BC government based on bilateral benefits.

“If the flow starts in a clandestine way there is no way to regulate it at the other end,” says David Mulroney, former Canadian ambassador to China, adding that every time he spoke to university students in China he was asked whether it was true Canada is a haven for Chinese fraudsters. “We have no idea where the money is coming from, how it was sourced—all of it contributes to an alarming lack of awareness in the local real estate markets,” says Mulroney, current president of St. Michael’s College at the University of Toronto.”

Best place on meth
Guest
Best place on meth

Predictably, when Yan’s study was published, a chorus of voices, including former developer Bob Ransford, jumped to criticize Yan: “The danger is intolerance, racism, singling out certain groups of people saying they’re to blame for this,” said Ransford. But such labels have failed to muffle the debate, particularly as more and more Chinese-Canadian voices have begun calling out white developers and academics for making the claim. Fung, the software engineer, says he’s among those “deeply pissed off” by what he considers a slur: “The only people claiming racism are white Anglo-Saxon males—that’s it. These are the same guys trying to label Andy Yan—whose grandparents paid the head tax—a racist? It’s absurd.”

space889
Member
space889

When we get people like you, well, it just makes it a lot easier and legitimacy to the ones who are crying racism about this debate.

StupidityCheck
Guest
StupidityCheck

Shut up you idiot.

space889
Member
space889

Hmmm….now that the Doc Strange have enlightened me, I know why you are so hostile. You too were brought up in a hellhole place with a rough childhood. My sympathies.