BC, equity, opinion, politics, prices

Why does the foreign buyer tax only apply to Metro Vancouver?

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109 Comments

Some people love the foreign buyer tax, some people hate it, but at least one person thinks it was a conflict of interest for the finance minister to enact it only in Metro Vancouver when he owns investment properties just outside that boundary:

 

The one home and six investment properties that belong to Mike de Jong in Abbotsford are worth almost $1 million – a significant investment that rose in value relative to similar properties inside Metro Vancouver, records suggest.

That puts de Jong in a conflict of interest when handling the province’s controversial real estate file, says Duff Conacher of Democracy Watch.

Mike de Jong owns a home and six investment properties just outside of Metro Vancouver.

“Given that the finance minister has significant real estate investments, I don’t think he should have been taking part in this,” Conacher said.

“He would have to recuse himself or sell his properties. It has to be one or the other. He can’t have a private interest and take part in decisions about his properties.”

But de Jong tells CTV News he had nothing on his mind except doing his job when he moved and voted for the tax in the B.C. Legislature.

“The decision was based exclusively on the analysis of the data,” he said outside a Liberal caucus meeting.

Read the full article over at CTV news.

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[…] –Mortgage growth slows –Low rates solve problems –HCG deposits decline –Taxing astronauts? –Fed rate hike soon –NDP win crucial riding –Strata complaints force sale –Total dollar volume plunges […]

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Just me

Just fresh off the Bloomberg presses.

Chinese Money Funneled to Far-Flung Homes Heralds Bubble Trouble

https://www.bloomberg.com/news/articles/2017-05-25/chinese-money-funneled-to-far-flung-homes-heralds-bubble-trouble

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paulb

New
206.
Price Change
42
Sold
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TI:8744

Just listed! Very cool 1100 sq.ft luxury/heritage conversion in Lower Lonsdale.
203-88 Lonsdale Ave. N Van https://youtu.be/SBuzSQxKKG0

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Bear Vancouverite

Another flip that flopped?

4049 W 13th Avenue
$4,680,000
Price in Mar 2017: $5,880,000
– $1,200,000 (-20%)

2016 Assessed: $4,246,000
2015 Assessed: $3,107,000

Last sold: Apr 2016: $5,150,000

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Combat roach

Sickening, still 80% over a price that would make any sense to local citizen at the local (strong) economy and even then to be called an expensive house.

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Bear Vancouverite

Yes very expensive, but the point is that this flipper will lose at least $600k on this deal if he even sells at $4.68M. And f he can’t sell, assuming the house is empty, he’ll be paying the empty house tax in 2018. And if the NDP enact the Speculator Tax, he’ll be carrying an asset that is losing value, and carries a high carrying cost at the mortgage, speculator tax, and empty house tax levels.

As bad flips work through the system, burned “investors” may not be back for more, which reduces demand further.

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Just me

Guys, that house was three million dollars in 2015. Almost 50% lower, just 2 years ago.
There is no amount of leveraging, and no interest rate story, that exoplains that jump. It is China money.
Unless the politicians put a stop to it, we are all screwed.

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Shut It Down Already

Speculation doesn’t require any foreign participation, but you conveniently ignore that obvious scenario.

People buy at high prices because they expect higher prices in the future. This is asset bubbles 101.

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Just me

Why don’t you just check who the owner is? Some numbered company?

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Combat roach

Why those particular people are Chinese, or “locals” of Chinese origin. Why you keep denying an obvious fact that whole shitshow in the BC’s market segment of over a million $ involves Chinese of whatever status, pr, citizen, student, housewife or foreigner? Now you just ask me for the link or statistical analysis based on facial recognition of an average speculator, a.k.a. Investor.

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Shut It Down Already

You’ve no clue as to their identity or nationality. Stop lying for once.

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bullwhip29

Surrey mayor defends fast-tracking developments as critics cry foul
http://vancouversun.com/news/local-news/surrey-mayor-defends-fast-tracking-developments-as-critics-cry-foul

>>> too little, too late Linda…

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Just me

Here is the video. Honest and instructive. Vancouver gets mentioned a few times.

https://youtu.be/FuTHKkdCG_U

David Eby has a mountain to climb if he wants to really stop this wall of money in search of a home (quite literally).

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Just me

Louis Gave: In Three Years, China Won’t Have Capital Controls Anymore http://www.valuewalk.com/2017/05/louis-gave-three-years-china-wont-capital-controls-anymore/ Reasons Behind China Capital Outflows Asked about rumors of capital flight out of China into Western assets like Vancouver and Toronto real estate, Gave—who lives in Hong Kong—pointed out that there are several different reasons. “The first, of course, is that China is getting richer. When you’re worth a million bucks, you keep all your money at home. When you’re worth 100 million bucks, you diversify.” Reason number two, he said, is Xi Jinping’s anti-corruption drive. A lot of people who acquired their money “in a somewhat dodgy fashion” had every incentive to take their wealth abroad. “The beauty, of course, about real estate is you buy real estate in Vancouver, in Sydney, and in Hong Kong—that real estate is yours,” said Gave. “And you own it through… Read more »

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Just me

China’s Bill Will Have to Be Paid
A Moody’s downgrade makes clear there’s no easy way out of its debt problems.

https://www.bloomberg.com/view/articles/2017-05-25/for-china-now-the-only-question-is-the-size-of-the-bill

There will be those who dismiss all this as a fantasy conjured by anti-China bias or an inability to grasp the wonders of the Chinese economic system. But the dangers escalating debt present to the Chinese economy are a simple matter of mathematics. Insisting China is somehow immune to such logic is the biggest risk of all.

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Best place on meth

We’ve all been waiting for a long time for china’s economy to collapse.

It better be a good one.

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BubbleTea

Chinese investors pull out of Melbourne apartment market
“80 per cent of Chinese buyers will not be able to settle because of trouble getting finance”
http://www.abc.net.au/news/2017-05-25/chinese-investors-pull-out-of-melbourne-apartment-market/8557182

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Kim

There was a NY Times article as well about how much debt China is in. I’m not sure if this is all just government debt but I think there is a lot of personal debt as well financing a lot of RE purchases.

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Combat roach

These are all interesting stories but in Vancouver they seem to be doing just fine. Nothing can hinder them at all.

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bullwhip29

San Francisco, which in recent years had the biggest home-price gain in the U.S., was the country’s weakest market in the first quarter, with values falling for the first time since 2011
https://www.bloomberg.com/news/articles/2017-05-24/san-francisco-goes-from-first-to-worst-in-u-s-home-price-gauge

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bullwhip29

Canada’s big banks see mortgage growth slow and even shrink in wake of cooling measures
http://business.financialpost.com/news/fp-street/canadas-big-banks-see-mortgage-growth-slow-and-even-shrink-in-wake-of-cooling-measures

>>> additional cooling measures being adopted by banks (discussed in post above) not yet baked into these results. what was the ticker symbol for that 2X bear TSX financials etf again?

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C.Junta

TSE:HFD. But the real questions are:
– will boc intervene as it did a decade ago (http://www.huffingtonpost.ca/2012/04/30/canada-bank-bailout_n_1466219.html)
– will boc follow the feds and raise the rates soon.

If your answers are “no” and “yes”, time to buy it. Common sense tells us the answers should be “no” and “yes”, but unfortunately, there is not much room for common sense here.

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bullwhip29

sure, the BoC will do something but not at this early stage. there would be riots on the streets if the banking/real estate cartels are given a handout with markets at record highs (vs rescued post collapse) with tax payer money for the second time in a decade. in other words, things get worse before they get better. final chapter will end with many over leveraged homeowners getting wiped out first, followed by QE and other stimulus, selective bailouts , floodgates being blown wide open for HAM and economic inequality on par with some 3rd world nations

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C.Junta

>there would be riots on the streets
I do not believe in it. People in general are not good at connecting the dots.

>QE and other stimulus, selective bailouts
Yep.

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patriotz

I think Canadian banks (the big ones, not the niche players) are less exposed to a Canadian housing downturn than they were to the US downturn a decade ago. Their risky mortgages are all government insured. If there’s any government intervention it will be to support the markets, in other words owners, just as we’ve already seen in BC.

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Yellow Beaver

What about all those risky HELOCs that aren’t government insured?

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C.Junta

Nice avatar btw. California sea lion I guess.

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southseacompany

“Canada home prices not coming down yet thanks to low rates: Reuters poll”, Reuters

http://ca.reuters.com/article/domesticNews/idCAKBN18L1PG-OCADN

“Efforts to rein in Toronto’s hot housing market and recent problems at mortgage lender Home Capital are unlikely to hurt Canada’s national real estate market as low borrowing costs continue to stoke demand, according to a Reuters poll of analysts.”

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bullwhip29

there are a million holes in wynne’s fbt framework. with all the uncertainty in BC, the flood of HAM into Ontario, PEI and every other nook and cranny will only accelerate. perhaps this will change as prices in toronto match or exceed vancouver’s or the city of richmond moves forward with a plan to officially exit the GVRD

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bullwhip29

Where goes Chinatown, so goes the City of Vancouver
http://vancouversun.com/opinion/op-ed/opinion-where-goes-chinatown-goes-the-city-of-vancouver

>>> sorry, this nimbyism gone full circle…we’ll soon see how the other 90% of former vancouver citizens who have been displaced really feel about this issue.

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Just me

Zolo’ stats suggest that the market is back on fire. Toronto’s new taxes have sent us back much of the HAM money.
The NDP and Greens better start implementing stricter controls on mainlanders’ money, or we will have another leg up in prices.

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bullwhip29

Fraser Valley board warns offshore clients seeking to misuse realtor bank accounts
http://vancouversun.com/news/local-news/fraser-valley-board-warns-offshore-clients-seeking-to-misuse-realtor-bank-accounts

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Dave

Don’t worry, the Liberals say foreign transactions are only a small percentage of this market. In the Valley, it’s almost zero.

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Just me

Right. Lies, damn lies and statistics.

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Shut It Down Already

Obviously they’d not show up in the stats if they were unable to make a purchase. And that doesn’t make the stats “fake news”, no matter how hard you wish.

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Combat roach

The Fraser Valley Real Estate Board (FVREB) is apparently racist organization?

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Shut It Down Already

You’re so clueless it’s stopped being funny. Please show me where the board used a racial slur (you know he kind that fuckwits like you use and then whine when somebody calls you on it).

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Best place on meth

“The Fraser Valley Real Estate board (FVREB) has warned managing brokers that offshore investors have apparently been asking realtors to complete illegal transactions that would break money-laundering and tax-evasion laws.”

Hey, I wonder where these lying, cheating, thieving, fraudulent scumbags are from!

Any guesses!

Can we drop all the fucking pretenses already and call these fuckers out by nation now?!

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Oracle

What happened to all the Liberal shills and HAM laundering lovers here? Where they go?

Newcomer, YVR, Shut it, Whistler???

First real change in 16 years.

And for Fuck sakes, Greens are not siding with Liberals. It’s propaganda spewed by sore loser liberals. First of all, they want electoral reform. If Libs agree to that then they are finished for a decade at least.

Greens will side with NDP.

Housing prices may be impacted hugely!!!!!

Have you seen the Green platform on housing or what Daid Eby of the NDP is prorposing??

What happened to all the Liberal shills and HAM laundering lovers here? Where they go

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Best place on meth

Newcomer is still lurking and voting after throwing a temper tantrum and promising to never participate in this blog again – PC IDIOT, LOSER & LIAR!

Shut it down is still siding with the communists like Justin is and denying that chinese money is driving up prices even though everyone, and I mean FUCKING EVERYONE knows they are – TRAITOR & LIAR! (get a rope for this fucker)

Whistler – Liberal retard, no hope whatsoever

YVR – occassionally open to other ideas, possibly salvagable, not sure, actually, not really.

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Shut It Down Already

Twat.

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southseacompany

“Home Capital’s savings deposits decline further”, BNN

http://www.bnn.ca/home-capital-s-savings-deposits-decline-further-1.760759

“Canada’s biggest non-bank lender Home Capital Group Inc on Wednesday published data showing that its high interest savings account balances declined on Tuesday.”

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bullwhip29

for all intents and purposes this is now a zombie company on life support. word is that they will try to lure unsuspecting retail customers back with high interest teaser rates and ultra predatory loan products that should be illegal. i can’t say i will feel sorry for those that chomp at the bit, but the a-holes in ottawa should not be turning a blind eye to all this

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southseacompany

“Fed sees rate hike ‘soon,’ according to FOMC minutes, with market predicting 80% chance of June increase”, Financial Post

http://business.financialpost.com/news/economy/fed-sees-rate-hike-soon-according-to-fomc-minutes-with-market-predicting-80-chance-of-june-increase

“The latest FOMC minutes signal that most Fed officials see tightening warranted “soon” and back a plan to gradually shrink the Fed’s US$4.5 trillion balance sheet.”

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Oracle

When NDP and Greens form alliance,

Foreign $$$ doomed.

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Whistler or Bust?

Public won’t stand for it. They did not win. They placed 2nd and 3rd out of 3.

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Doomcouver

More than 56% of the electorate voted NDP or Green. I’m pretty sure they’ll stand for it. I think the most likely outcome is Christy will get thrown out by the Greens and they’ll form a coalition with the NDP . Siding with the LIberals would kill any support people had for the Greens, and Andrew Weaver knows it.

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Dave

This math always makes me laugh.

And more than 56% also voted for the Liberals and Greens. And 80% voted for the Liberals and NDP.

Out of the three possibilities, the one with the least amount of public support is NDP and Green. The one with the most support is NDP and Liberal and the second most is Liberal and Green.

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specialfx3000

Let’s try a different math. More than 56% voted for a new Government. They want change. Your other 2 possibilities won’t fly.

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Dave

You can’t infer voter intentions. People vote for all sorts of issues and reasons. All we know is who they voted for, not why.

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Oracle

Boohoo. Just watch. We will form an alliance.

Because we can. Or you an anarchist who doesn’t believe in democracy?

Change is coming. Hope you didn’t buy because HAM is gonna be stopped full stop.

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Royce McC

Nobody won. It’s a hung parliament. There are many types of completely legitimate government that can follow based on the way seats were awarded (by the public).

“Placing” has no bearing on it. Seat totals do. And, respectfully, I suspect you wouldn’t exactly be adamant about where parties “placed” or what the public would stand for if it was the NDP that was up by 0.1%.

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history

any leisure travel plans this year? Your Fiji vacation commentary last year was pretty fly for wifi

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Dave

If BC gets some type of electoral change, we will have a perpetual minority government, dictated by fringe elements. Wait until we get the Christian Heritage party with a couple seats. And on and on.

I think that would be devastating to our economy.

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Just me

With a bit of luck, that would make the city affordable again. Having a job is no guarantee to afford a life here any longer.

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Dave

Hard to say if that would be the outcome. How’s that working in Vancouver, Burnaby and Coquitlam? Our bigger centres have left of centre mayors aligned with the NDP and we still have a major housing problem. I think we have a strange situation of serious land and supply constraints with a growing population. Maybe prices can keep going up in a bad economy because the supply needed for a correction never gets built quickly enough. More and more I see a new ‘class’ of people emerging. Traditionally, we had rich, middle and poor (working). I think the middle class is splitting into two, with a consumer class emerging. These are people who can afford all the latest toys and vacations, but can’t really build any assets. While jobs might be easy for these people to come by and they… Read more »

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bullwhip29

with the many 1000’s of immigrants arriving here seemingly on a daily basis the overall trajectory isnt going to change. weaver and horgan will soon realize (if they havent already) that it will be next to impossible to keep their campaign promises.

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Dave

I agree, there is no easy solution. For example, none of the parties would close the University immigration back door. The universities will not be happy if the Province stops those programs because they’re addicted to the revenue. Similarly, municipalities are addicted to development cost levies. They don’t want to reduce the cost of development because they need to that money. I also think a 30% foreign tax would go over like a lead balloon at Vancouver, Burnaby and Coquitlam, despite being run by left wing parties. They need that foreign capital to keep the lights on at City Hall. Economically, the biggest factor for growth in the Lower Mainland economy is increasing the population and import of foreign money. As if any party is going to slow that down to build a real economy. When you get down to… Read more »

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bullwhip29

there is also the Jing Li class action re. FBT which has yet to play out. i doubt class participants would be easy to pay off (but krusty tried) as they could reap considerably more in both financial awards and repealing of the tax altogether (since they are all long RE i am guessing). in this perverse parallel universe world we live in nothing would surprise me anymore…

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bullwhip29

they should immediately begin with that tiny grenade disguised as a $1/day rental tax credit that krusty joked awkwardly about but obviously doesnt want since it would require tenants to file specifics about their accomodations and so on and so forth. should the 3 of them fail to agree to agree on what appears to be a small potatoes issue (at least on the surface) then we know the sh#t is about to get real in a big hurry

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Best place on meth

She really did repeat that line over and over, desperately.

$1 a day, Squaawwwk!! $1 a day, Squaawwwk!! $1 a day, Squaawwwk!!

Oh yeah, she doesn’t want cheating landlords exposed.

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Best place on meth

It will take them all of 3 months to completely monopolize such a small real estate market, even if they just trickle in.

New Coast Charlottetown will soon be up and running, cheating buyers and sellers by the hundreds.

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Just me

The influx is the result of a government program targeting immigrants with business skills, willing to invest money in PEI’s economy.
It’s providing valuable business for the construction industry.

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Just me

And, of course:

Webster suggests a more pressing concern is keeping the new neighbours on the Island.
“Some of the newcomers will come, meet the requirements of the program, and, maybe look at another part of the country. Many come from large cities and they miss that part of it,” said Webster. “So, we see a lot of them moving onto Toronto, or, Vancouver, or, Montreal, a larger centre.”

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Just me

Now that we know the BC Liberals won’t command a majority, the question is: what are the implications for house prices? Curious to know what people think and expect.

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Yikes

Smart money will list sooner than later, listings still low but not for long/ie prices will fall

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Shut It Down Already

Smart money is already gone.

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bullwhip29

HAM for the most part is simply monopoly money. while it will become more difficult and expensive for them to move more cash over here, the nesteggs they have stashed here already isnt going anywhere and explains why listings basically dried up following rollout of FBT and prices snapped right back to pre FBT levels in a few weeks

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Best place on meth

If the NDP and Greens strike a deal to form a coalition and oust Kristy right off the bat, as I believe they will, then David Eby will be in a powerful position to enact some policies targeting speculators, tax-evaders, astronaut families, empty homes and sea lion tormentors.

In other words, going after the cheating chinese.

I’m feeling bearish.

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history

Allowing the Cheating Chinese to do their deed could be payback for the Kissinger induced Great Famine 1959- 1961. People have long memories, especially if the taste of human flesh is stil in your mouth.

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Whistler or Bust?

Why should the losers for the Gov’t?

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Shut It Down Already

You’ve already had this answered once before.

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Doomcouver

If David Eby can translate even half of his rhetoric as housing critic into actual policy, the housing speculators are going to have to find a new line of work, the clampdown will be historic. If the NDP also borrow some of their policy from the Greens, then house prices only have one way to go, down.

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Best place on meth

Eby doesn’t do “rhetoric”.

Dude’s serious about issues.

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Dave

Anecdotally, the Asian money has continued for the last couple weeks despite uncertainty and the mood on the street is still optimistic. I am not so rosy though. My prediction is that the market will look a lot like 2010 and the summer of 2016, which is a drop in both listings and sales volume. I think buyers and sellers in Vancouver tend to sit on the sidelines when there is uncertainty to see what way the market will go. And I think they will do that again, which is more or less what is happening now. I think we will need an event to cause the market to take a leg down. That could be a lot of political uncertainty or upheaval, rising interest rates from the bank or a recession. Of those, only realistic one is political. For… Read more »

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history

ever higher House prices need an ever higher velocity of Refinancing. Have those conditions improved or gotten worse?

I would be diplomatic and say it’s stuck in neutral.

One thought, while I write …. A guy in the BC Hydro tv commercial, looking at his house, with this phrase spelled out by his sagging hydro wires:

You Are Taking A Dangerous Risk

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bullwhip29

it is pretty clear the overall level of uncertainty is ramping up but questions remain. HAM that is already here or is being mobilized as we speak will step in and buy on weakness. this said, those that are concerned taxes and other restrictions might be implemented may either (1) opt to buy sooner than later or (2) defer purchase and wait for dust to settle, perhaps more importantly, will either horgan or weaver actually follow through on their election promises? or will things continue on business as usual (as is usually the case)

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bullwhip29

not sure if there is actual meat to this story, but my sister in law (senior mortgage underwriter at big 5 bank) told me upper mgmt held a number of meetings over last 2 weeks presumably to review the various election outcomes and that yesterday implemented an interim policy to immediately hold back significant % of deals pending approval under former guidelines (which i am guessing will no longer be going forward). obviously this a fluid situation so it is impossible to know for sure what the final outcome is. another source told me other banks already have or will soon be adopting similar guidelines.

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bullwhip29

my translation: morneau and poloz saying steady as she goes with a fake smile to the general public while signalling their banker buddies to head to the life boats as quietly and discretely as possible

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paulb

New
289
Price Change
49
Sold
227
TI:8769

http://www.clivestevepaul.com

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history

Dave, thats impressive. Is your spidey senses suggesting a real earthquake, set off by shakey Chinese steel structure, or perhaps, pissed off ironworkers taking a longer than usual sandwich break to vote for Horgan?

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kabloona

VICTORIA — The B.C. NDP won the crucial riding of Courtenay-Comox on Wednesday, leaving the B.C. Liberals without the seats needed to form a majority government.

http://vancouversun.com/news/politics/final-day-of-vote-counting-in-courtenay-comox-to-determine-next-government

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history

The NDP win in CC says something about the absentee voters, who you would Think sympathise with the Libs, ie. brave oversea military personnel, and airplane commuter oil field toilet cleaners. But the Protest vote stuck, and a former safe Mortgage nutty Seat went NDP.

This win by Horgan is very large.

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BubbleTea

Toronto’s bubble popped!
All Heck Breaks Loose in Toronto’s House Price Bubble
http://wolfstreet.com/2017/05/24/toronto-house-price-bubble-pops/

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history

classic. epic. profound.

HCG is all about bucketshop, ponzi, immigrant financing, leading to Soros insolvency… and right on queu, it’s gone bust.. the TO market, as we speak…

They paved paradise and put up a pink sawdust house…
– Joni Mitchell, 1969

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Yellow Beaver

What’s it like being retarded? Care to tell us your story?

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history

Mr Speaker, the right honourable member of yellow beaver, is out of order. At no time did i say he was retarded. But his teeth need a good brushing, and floss to remove sawdust plaque

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