"Same trend in Sydney, where Chinese investors snap up a quarter of new homes and are forecast to double their spending by the end of the decade."
And it looks like those Australian property ownership laws for foreigners are working really well.
"Same trend in Sydney, where Chinese investors snap up a quarter of new homes and are forecast to double their spending by the end of the decade."
And it looks like those Australian property ownership laws for foreigners are working really well.
Why slag free swag?:rolleyes:
ummm, as your doctor i recommend against riding with a scaphoid fracture.
http://www.macleans.ca/economy/whats-the-point-of-vancouver/
This is what I have been trying to get at for the last 2 years - stratospheric RE prices are more than just a burden on families, they completely skew the allocation of resources.
We are about to choke off the lifeblood of the region for more luxury condos.
Its only now becoming an issue because its about to affect the whole countries economy, but when it was driving out residents, destroying communities, etc, its was all blamed on entitlement and whatever other bullshit.
Vindictive part of me says - good. Let even the rich suffer when they realize they can't even afford to stay here. The Vancouverite in me says, what the hell are we all thinking?!
Andy Yan was warning of this 10 years go - and we all talked about it on a bulletin board, joked that he was alarmist and out to lunch. Here we are 10 years on, and its looking like the "New Monaco" scenario is the most plausible end game.
Sad.
Article RE: the potential for Vancouver becoming a ghost town
"You know what's wrong with Vancouver? You can't pee off of your own balcony without getting in trouble"
- Phil Gordon
Article RE: the potential for Vancouver becoming a ghost town
Some solid points.
I personally believe that taxation on homes needs to be dramatically increased if the home is not your primary residence. I don't care where you're from or what you're doing with it. If you can afford a second property, you should be paying more tax as you're reducing housing stock for those that otherwise might want to buy a primary residence. Looking to park money out of sight of the tax man in your home country? Pay up. Plan on buying a vacation condo and cashing in via Air BnB for 35 weekends a year? Pay up. Own an investment property that you plan on renting out for the income? Pay up. Yes, a city needs rental stock, and vacancy rates in Vancouver are lower than most places in the world. Such a policy would be a tax on landlords such that rental stock is likely to be sold off. Sold off such that young, bright people that want to live, work and buy a home in the city can do so.
That said, I also think Vancouverites need to realise they face a choice between living in the city, and living in the kind of 5 bedroom, 4 bathroom, single family dwelling they grew up in. Guess what. Land values are at a premium in urban centers and much of Vancouver's housing stock is too damn big. Identify residential areas for densification. Tear down non-historically significant McMansions. Divide the lots, and build off-strata townhomes, duplexes and row houses. These are the kinds of 'starter family homes' Vancouver is lacking. Vancouverites get criticised for whining that they can't afford a single family home, but there is justified criticism on both sides. There are very few 'starter family homes' available in the city.
The Mayor's policies on 'affordable housing' are just propping up the market temporarily. No one should have to live in a 250 sq ft shoebox whilst gainfully full-time employed. The problem is that, as Vancouver housing costs become more and more unaffordable, more and more relatively well-off, working-class people are relying on social housing programs. At the end of the day this is going to come back and bite the city.
/End rant of personal opinion and prejudice.
As has been pointed out many times, it's hard to see where the political will to make changes is going to come from. Any negative impact on housing prices, especially from localized policies within BC or GVRD, is going to hurt a lot of people's balance sheets. So many folks are under crazy leverage (remember we have a negative savings rate in BC and have for quite a while) that anything that reduces their equity is going to have massive political blowback.
If the problem was 100% attributable to those evil folks from China, it would be an easy political fix. Maybe that's the case on west side/West Van mansions, but not everywhere else. I suspect the government has the data to show that your everyday Canadian going max leverage is a huge part of the problem on the detachment of prices from macro indicators. Hence the inaction.
The other question is what jurisdictions can take what action under current legislation regarding tax changes.
All that said, if someone could push a button and just hammer a wealth tax only on foreign buyers, I would gladly support that. It's just not that simple.
In quite a few countries foreigners aren't allowed to purchase land, for this exact reason.
The governments don't want people from outside of the country to come in and price locals out of the markets.
How to fix it?
Set a future date, say 1 year in the future, and say "From this date forward, foreign purchase/ownership will not be allowed. Previous owners will be grandfathered in, but you will only be able to sell to a citizen of the country."
Sure, some people won't like that.
But what's the long-term alternative? China slowly buying up the city and driving citizens out?
The best things in life all start with the letter B
Hooray for: Bacon, Bikeys, Boobies, Boards, and Beer!
In quite a few countries foreigners aren't allowed to purchase land, for this exact reason.
The governments don't want people from outside of the country to come in and price locals out of the markets.
How to fix it?
Set a future date, say 1 year in the future, and say "From this date forward, foreign purchase/ownership will not be allowed. Previous owners will be grandfathered in, but you will only be able to sell to a citizen of the country."
Sure, some people won't like that.
But what's the long-term alternative? China slowly buying up the city and driving citizens out?
At risk of sounding like Fast Orange, why are foreign buyers more to blame than Canadians buying second homes as investments?
And with interest rates likely going nowhere over then next decade nothing is going to change.
What the market needs is a flushing out of all the 5% down pondscum with no equity.
At least canadian buyers who buy a 2nd home have a right to buy here (in my mind). They contribute to the economy in an ongoing basis.
What the market needs is a flushing out of all the 5% down pondscum with no equity.
I'd hazard a guess that the 5% down people with low equity are not the ones that have caused prices to escalate.
I'd hazard a guess that the 5% down people with low equity are not the ones that have caused prices to escalate.
more like the ones desp. trying to get a toe hold on getting some place to fucking live…
but sure feel free to blame the people who can basicly NOT even afford to live here anymore…=/
I'd hazard a guess that the 5% down people with low equity are not the ones that have caused prices to escalate.
The 5% down people are definitely causing prices to escalate on the lower end of the market. For example - if a place is selling for $500k, if you had to put down 20% then only those with $100k in savings would be able to bid on the place vs. with the 5% rule now anyone with $25k in the bank can bid on the place… and more buyers in the market will push up prices.
I think if a place is over $1M then you need 20% down though so I guess this would probably only apply to the prices of condos and townhouses, and houses further out of the city.
At risk of sounding like Fast Orange, why are foreign buyers more to blame than Canadians buying second homes as investments?
Because foreign buyers incomes aren't tied to the state of the BC economy and the value of the Canadian dollar. Just look at the articles about Canadians cashing out of the the American real estate they bought when the US economy and dollar were low.
The 5% down people are definitely causing prices to escalate on the lower end of the market. For example - if a place is selling for $500k, if you had to put down 20% then only those with $100k in savings would be able to bid on the place vs. with the 5% rule now anyone with $25k in the bank can bid on the place… and more buyers in the market will push up prices.
:lol::lol::lol:
not quite.
that anyone with $25K in the bank needs to have at least a $100K income to support your example of the $500K home with a $475K mortgage. never mind the fact that not everyone has $25k cash sitting in the bank ready for a home purchase. what's putting pressure on the lower end of the market are all the people that can no longer afford to buy at the upper or even mid-point of the market. homes on the east side regularly going for a mil or more should be a clue there.
cmhc mortgages have been around for a long time and that didn't lead to a run on housing prices. prices didn't start getting really crazy until the foreign money started pouring in. there are lots of mitigating factors such as low interest rates, low supply and a growing population, but without a doubt
the biggest driver is foreign owners with deep pockets paying cash for homes at whatever price they want to pay.
We don't know what our limits are, so to start something with the idea of being limited actually ends up limiting us.
Ellen Langer
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