It’s not New York City or Orange County, California, but Vancouver, British Columbia.

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James Suroweicki in The New Yorker explains how “Real Estate Goes Global”  Using us.

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Steinberg-cover-580We’re all familiar with the stories of Russian oligarchs buying up mansions in London, but this is a much broader phenomenon. A torrent of capital from wealthy people in emerging markets—from China, above all, but also from Latin America, Russia, and the Middle East—has flowed into the real-estate markets of big cities in other countries, driving up prices and causing a luxury-construction boom.

A recent report by Sotheby’s International Realty Canada examined more than twelve hundred luxury-home sales in Vancouver in the first half of 2013 and found that foreign buyers accounted for nearly half of sales. In Miami, a huge influx of money from Latin America has enabled the city’s housing market to recover from the bursting of the housing bubble, and has set off a condo-construction spree. Australia has become a prime market for Chinese investors, who Credit Suisse estimates will buy forty-four billion dollars’ worth of real estate there in the next seven years. …

Vancouver isn’t an obvious superstar. It’s not home to a major industry—as New York and London are to finance, or San Francisco to tech—and it doesn’t have the cultural cachet of Paris or Milan. Instead, Vancouver’s appeal consists of comfort and security, making it what Andy Yan calls a “hedge city.” “What hedge cities offer is social and political stability, and, in the case of Vancouver, it also offers long-term protection against climate change,” he said. “There are now rich people around the world who are looking for places where they can park some of their cash and feel safe about it.” …

The globalization of real estate upends some of our basic assumptions about housing prices. We expect them to reflect local fundamentals—above all, how much people earn. In a truly global market, that may not be the case. If there are enough rich people in China who want property in Vancouver, prices can float out of reach of the people who actually live and work there. So just because prices look out of whack doesn’t necessarily mean there’s a bubble. Instead, wealthy foreigners are rationally overpaying, in order to protect themselves against risk at home. And the possibility of losing a little money if prices subside won’t deter them. Yan says, “If the choice is between losing ten to twenty per cent in Vancouver versus potentially losing a hundred per cent in Beijing or Tehran, then people are still going to be buying in Vancouver.” …

One option would be to severely restrict foreign ownership, but that’s politically difficult, and not great for a city’s economy. It might make more sense if the Vancouvers of the world simply charged foreign buyers a premium for the privilege of owning there. “We’re one of the places where people seem to want to park their cash, and there aren’t that many of those places,” Yan says. “So let’s raise the parking fees.” As for the rest of us, we’d better get used to being tenants. 

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Full article here.

Comments

  1. Which of course means we do not need to borrow zillions to dig tunnels for shiny trinkets ‘cos there will be no one to use them.

    Only one thing worse than selling your kids future out to the neighbour who doesn’t answer the door bell to christmas carolers is getting some on to sit on the strata council . . .

    Oh the woes of being the international roll over dummy.

    Get used to it!

  2. Interesting story!
    I’ve been thinking about this very issue since Thomas Picketty’s Capital in the 21st Century came out recently, talking about the increasing concentration of wealth at the top, and how this super-rich class were distorting local real estate markets in places like London, making it impossible for middle-class locals to afford property. It was an ‘aha’ moment, as I realized that our made-in-Vancouver un-affordability anxiety is really a symptom of a bigger, global phenomenon! It makes me wonder if local advocates for affordability are being naive if they ignore the global economic climate that Vancouver is in…
    Interesting idea to tax the foreign buyers who will pay a premium to own here. We do this with schools already, where international students pay much higher tuition to attend our esteemed universities (and even high schools).

  3. I don’t buy these explanations. This isn’t just an issue with Vancouver, Toronto and Calgary are hugely elevated as well. Looking farther, the western countries that didn’t get hit by the 2008 housing burst are almost all facing hugely elevated housing prices now. Any explanation that looks to local or regional factors must be missing the real story. Canada, like Australia and other countries, is having a massive credit bubble creating a huge incentive to get mortgages. This is the same thing that happened to US except their bubble burst. We missed that so the trend continued taking us to the extreme levels we see now (enormous debt ratios, some of the highest levels of home ownership in the world, IMF reports singling the CMHC out as a massive economic risk, rising home prices on declining volume, increasingly shady mortgages as the next bigger fool gets harder to find).

    Near the top of every bubble pundits tell us that “this time it’s different” and as a part of this we hear any number of stories about causes, virtually all of which are total fictions. We just saw this with the US housing bubble and the dot-com bubble in the 2000’s. The stories of the Yellow Peril pricing us out of houses makes for good press but there’s no evidence that this is happening at all let alone being a major factor in home prices.

    1. There is no real estate bubble. There is also not a credit bubble. Investors incl banks make rational choices, and if you got $1B to invest and can get 3-4% in a mortgage on an asset at 65-75% loan to value then that is prudent investment. You may get more in stocks, but the risk of losing it is far higher.

      I heard this bubble talk now for almost thirty years in Vancouver, ever since Expo 86 put Vancouver on the map, and when folks from HongKong got nervous about China and parked their money elsewhere before the future of HongKong was known after it ceased to stay British.

      Vancouver is the new, former HongKong, half British and soon half Chinese.

      China is huge, 30 times as big as Canada. They will not stop coming. Prices will continue to climb in MetroVancouver, especially in good locations. A house for $2M is not so expensive on a world scale, roughly € 1.4M .. The price of a nice home in Vienna, Munich, Paris or £ 1.1M which is a rather small house in London.

      Vancouver is also land locked, and all those folks not even willing to discuss the ALR or creating new land in the Fraser River delta are also driving house prices up, not just the Chinese, or Persians, or Russians, or Albertans coming here and/or investing here.

      I walked through the west end yesterday. Lovely day. I chanced upon a protest bemoaning the tear down of an old house to build a 17 story tower. The protesters too cause prices to rise, of course completely oblivious to them.

      $400/ sq ft in New West for a brand new water facing condo blocks from a sub way ? That is not a bubble. That is still cheap !

      1. When you see the same trends in house prices across Canada (Vancouver, Calgary and Toronto) honest analysts need to confront the fact that it isn’t just local. There are local variations, but whatever’s hitting us is far larger than Vancouver or BC. As it happens, it’s larger than Canada: the trends to cheap credit, ratios of house price to income, ratios of house price to rent, and the Shiller house price index in a dozen countries all move in the same direction.

        And when you see a half dozen countries hit a crisis and declare a “bubble”, you should pay attention. What makes us exceptional? Our housing figures are worse than those in the US in 2008.

        In every bubble, prices go up as speculators look for a quick buck, investors fear they need a piece lest they underperform and finally the trend is so obvious that regular people get swept up. Prices go up until everyone that can buy in has bought in. When there are no more suckers to sell the inflated asset to, we’ll see whether this time it really is different. With 160% debt-to-income levels, and average home prices already 13x median income, it’s naive to imagine there are many buyers left.

        You’d better hope your stories of a Yellow Peril aren’t a racist delusion as that’s the only thing which could keep this ship afloat.

      2. “You may get more in stocks, but the risk of losing it is far higher.” Thomas you’re a one trick pony with you’re real estate tunnel vision obsession. I will take stocks over real estate any day, real estate is the most non-liquid assets around. By the time you race out to the curb to plunk down that for sale sign and all your neighbours are doing the same its too late my friend. As for Stocks, I have insurance against my positions with put options and selling covered calls, etc. What is your hedge against an Earthquake in Vancouver? What will happen to Vancouver real estate then? No bubble? They said the same thing about Honolulu in the 80’s when the Japanese were buying like crazy, no more land, tourism safe, weather, etc. The Americans bought it all back from them after the Japanese economy collasped.

      3. I heard this bubble talk now for almost thirty years . . . Thomas, you were too you to remember the 1980-3 bubble when interest rates spiked over 20%!

        Wow, thems was thu days and it can happen again!

        1. No it will not happen again ever since QE ( quantitative easing) was invented and now is in widespread use in most industrialized countries

          Will people stop coming to Vancouver : no

          Will people leave Vancouver in large numbers: no

          Will Vancouver’s land mass increase with ample new land for new housing: no

          Will labour cost fall: no

          Why would prices fall ?

    2. Alex T, when did you move to Vancouver? You sound like a recent addition to be so out-of-touch with the Vancouver housing market.

  4. Why does BC or specifically MetroVancouver not monetize this desire by foreign rich people to invest here ?

    Taxes ought to be increased for condos or houses, starting at $1M then getting progressively higher. Land transfer taxes are 2% over $1M already, far too low. It ought to be
    $20,000 plus 3% over $2M
    $50,000 plus 4% over $3M
    $90,000 plus 5% over $4M
    $140,000 plus 6% over $5M
    $200,000 plus 7% over $6M
    $270,000 plus 8% over $7M
    $350,000 plus 9% over $8 M
    $440,000 plus 10% over $9M

    That would curb the demand somewhat but would monetize foreigners’ desire to invest here.

    While I am generally against higher taxes for residents, foreigners ought to be differently treated.

    Even a luxury car sales tax should be considered, say 10% for anything over $70,000.

  5. The last sentence of the article is chilling: “As for the rest of us, we’d better get used to being tenants.“

    To think that no politician has been strong enough to even to lift a finger to stop this is ridiculous. If you are not looking after the ability of your residents to live in their own city, resign!

    1. The idea of owning property in your city, especially in the urban core, is a privilege reserved for smaller, provincial cities. As Vancouver grows this will be farther out of reach, is it has been out of reach in large cities like Paris or New York for decades if not centuries.

      However that doesn’t stop people from living in and loving big cities. When you’re a tenant, you’re free to invest your money in other things. Home ownership is a double-edged sword. Owning property equals neither citizenship nor happiness.

  6. The fact is that living anywhere in particular is a privilege, not a right. Past Mayor and Premier Gordon Campbell said that if you cannot afford to live in Vancouver, you will have to move out. He suggested Revelstoke.

  7. I’m curious to know how and where this 50% statistic came from. I have no basis to not believe it, other than I was under the impression that we as a country, province and city didn’t keep track of foreign real estate purchases. How did Sotheby’s get their data?

    More to the point, going the way of Australia to regulate, charge for and guide off-shore real estate transactions sounds pretty good from my vantage point out here in the peanut gallery,

  8. What is a foreign buyer? I, like Frank, would like to know where this reported figure comes from and I would also like to know how we define “foreign buyer”.

    Are we including in that definition someone who has Canadian residency status and has one or more residences elsewhere? Are we including in that definition the buyer who will own that home residing in a foreign country while members of the buyer’s family will reside permanently in the home? Or, are we simply defining it by classifying people who have a surname that indicates they are part of an ethnicity that is from elsewhere and are purported to be part of a group of people interested in investing in Canada?

    This is dangerous stuff. I suspect one, if not both, of my great-grandfathers, who came to Canada and purchased property more than 100 years ago, would today be considered “foreign buyers”.

    As far as I can determine, neither ever formally became naturalized citizens of Canada but they both contributed significanly to the development of the community I live in today. I know one of my great-grandfathers was considered from a class and an etnicity that was not all that accepted when he arrived in Metro Vancouver, to put it mildly. As an Italian immigrant, who after much sacrifice and hard work, bought property and built multiple homes for his family, he was considered a “peasant” not worthy of being considered a contributing citizen of the community he settled in. Yet, he went on to contribute for 40 years– working hard and being a wonderful citizen, raising a big family whose descendants continue to be contributing citizens.

    Folks, our country was built by “foreigners”. Some of them bought real estate at the time they arrived and some paid more than most who came before them were willing to pay at the time.

    1. Did your Great Grandfather run a sweat shop in Shenzen with no regard for the environment dumping chemicals in the nearby river, paid people nothing after long hours of slave labour, um I mean work, greased the palms of corrupt politicians and then launder your money in Vancouver real estate? And then when you get here make no effort assimilate with the local culture?

    2. Bob Ransford, by definition, “foreign” refers to anyone who is not a citizen of the country in question. It is a factual term, not a racially-motivated one. It further connotes difference, as in language, lifestyle, clothing, food, housing, religion, etc. from one’s immediate environment. Thus, “foreign buyer” refers to someone who buys property in a country where he or she is not a citizen, and potentially there could be other differences between that person and the new environment. Whether that individual opts to live in the property or not is irrelevant to the term “foreign.” Whether that individual resides in a country or not, and contributes economically or not to that country, regardless of the number of years resided there also is irrelevant to the term “foreign.” Therefore, your great grand-parents (as described by you above) were foreigners to Canada, yes. “Peasants” or billionaires is a matter of net worth financially, irrespective of being foreign, as is, correspondingly, being a property owner or not. The fact that Canada was built by foreigners in the past is not an issue for debate; it is a given. What is open to argument is Canada’s future and to what extent foreign ownership is or is not wanted and needed moving forward.

  9. Keep dreaming about falling Vancouver real estate prices as it ain’t happening in a growing world in a land locked city with world class schools, entertainment, mountains and water.

    Why would they fall ?

    1. I erased the more colorful response I had for you. Can you tell me exactly why people should move away from their job, friends and family? And where should they go? The fact is, if you are going to have jobs that don’t pay enough to make ends meet, you are also going to have to house people who work those jobs. Not everyone can live out their life in their parent’s basement.

      1. Jenables, my “parroting Gordon Campbell” was by no means my agreement with his sentiment; I found his advice abhorrent. However, his welcoming of off-shore investment post-Expo 1986 (including the sale of the Expo lands to Hong Kong billionaire Li Ka Shing), without any care or consideration of the negative consequences for locals, resulted in the deaths of evicted senior citizens (including veterans) from Kerrisdale (ousted from their fixed-income rental accommodations) to clear the way for condos, numerous vacant multi-million dollar homes throughout the city (owned by off-shore investors) and the over-escalation of our housing prices. Indeed, many locals capitalized on the tripling of their property values in 5-10 years, sold their Lower Mainland homes and moved elsewhere, such as Revelstoke. Not only foreigners, but also locals, benefitted from the foreign influx.

        1. “Numerous vacant multi-million dollar homes throughout the city (owned by off-shore investors).” Talk to the people in Phoenix, Palm Springs and Florida about the Canadians who bought houses after the property crash and high Canadian dollar that sit empty for 6 months of the year. What are those neighbourhoods like?

    2. World class schools? Okay… but, I hear this whole “isn’t making new land” argument all the time. And I think to myself, what established, medium to large size city with suburbs around it IS making new land, landlocked or not? Sounds like another recycled thing people say to hype up value. More economics of scarcity at work.

      1. Hongkong airport is built on an island (of trash). San Francisco Bay or Monaco made new land, as did Holland, as did Richmond 100 or so years ago. Miami South Beach or Venice are also on new land off essentially low lying sandbanks. Vancouver has a few of those, off Richmond or Delta, or UBC even. Take a walk there, at low tide. Of course today we could not do what we routinely did 100 or so years ago because of “the environment”.

        1. Island Trash?
          Maybe Vancouver can mix its trash with cement and start building seawalls, instead of trying to build a gas fired incinerator. Let’s get coherent about our environmental actions.

  10. Apparently Andy Yan is unfamiliar with the phenomena of sea level rise. The smart money says head for higher ground.

      1. Thomas, you need to find some new sources. The Heartland Institute and Judith Curry aren’t cutting it. If you want to be skeptical, great. Suggest you start here to understand the NIPCC report.

        http://www.skepticalscience.com/denialgate-highlights-heartlands-selective-nipcc-science.html

        If you want to see actual sea level rise overlaid on projections, start here:

        http://www.skepticalscience.com/sea-level-rise-predictions.htm

        Lots more of the myths you are echoing are addressed there.

    1. Wrong again. Andy Yan and BTA Works have mapped sea level rise in Vancouver extensively. London, certainly one of the truly most expensive real estate markets in the world, can hardly qualify as “higher ground.”

  11. Bob Ransford – totally agree. This is the last blog where I expected to read such racist bs. Keep your hatred to yourself or take it elsewhere, RonS.

  12. LOL! All these urbanists and livability experts always tooting their collective horns in Vancouver — Turns out the world’s billionaires aren’t buying up Vancouver because they want to ride their bikes around the seawall. They’re just looking for somewhere to stash some cash.

    Vancouverism turned out to be nothing more than a branding slogan to peddle investment condos and Ferraris.

    1. LOL

      What a bunch of utter nonesence. There are only around 1,600 billionaires in the world. Even if they all bought 2 or 3 homes in Vancouver, that would have little or no impact on the price of homes for the average person.

      The only impact might be to price millionaires out of the most expensive homes.

      As far as condos go, the prices have actually dropped a bit over the last few years and the vast majority of them are priced to sell to people of average means, not millionaires and billionaires.

      1. LOL indeed. Condos priced for people of average means? You obviously have a different view of what “average means” means than the people of average means themselves.

      2. Richard, in the 1980’s and 1990’s, the start of Vancouver’s escalating prices, off-shore investors were not buying just “2 or 3 homes” here, which you claim; they were buying large swaths of land throughout the Lower Mainland and built innumerable highrise condos with hundreds of homes in each one. They also bought existing highrises, office buildings and entire blocks of houses. Numerous studies confirm the substantial contributions of off-shore investment on the escalation of Vancouver’s housing prices.

        1. Susan, the 1980’s in no way marked the beginning of escalating prices. Sure Expo’86 is a significant milestone, but outside money and speculation has been driving the real estate market here since time immemorial. My parents’ first house in Vancouver appreciated 562% between the mid 1960’s and mid 1970s.

  13. I find it disappointing that one cannot have a discussion on foreign ownership of real estate without people waving the “racist” label.

    Bob Ransford, your comment raises interesting questions on what qualifies as Canadian. My definition would be somebody who lives and works in Canada and declares all their income on a Canadian tax return. Not the official defintion I know, and would exclude many people including Michael J Fox, but it is one that to me proves or disproves how committed one is to one’s community,

  14. Andy Yan is quoted in the New Yorker;

    “What hedge cities offer is social and political stability, and, in the case of Vancouver, it also offers long-term protection against climate change.”

    This is not quite correct. Urban areas lying close to sea level all across the planet are at risk of sea level rise. In Vancouver areas at risk in the long term include Jericho Beach, parts of Kitsalano, the False Creek Basin, False Creek Flats, Gastown, the Downtown East Side and parts of Chinatown. While the flood risk area is small in comparison to the whole city, the density is high in some of these areas and includes some of the priciest property in the city. In addition the cost to flood proof and maintain below grade infrastructure, parking structures, rail lines, power supplies and distribution lines, pumping stations, and storm water systems may well exceed the impacts on real estate values. Are we a hedge city? That will depend on where your investment is located and how much money the City has to spend.

  15. “I find it disappointing that one cannot have a discussion on foreign ownership of real estate without people waving the “racist” label.”

    I think you’re mistaken in believing that any discussion of foreign ownership leads to a label of racism. If there was evidence of an issue, then by all means let’s discuss it. If it passed the sniff test, let’s dig it out. But as Richard Campbell pointed out, prior plausibility is low. It’s worse than that though. I heard that surveys of Victoria real-estate sales showed that sales were 97% from within Canada and 93% from within BC. Worse, many of the publicized foreign ownership scares were faked:

    [blockquote].But as this blog pointed out days after Global and CBC ran their yellow peril stories, the Chinese dudes were actually Canadian realtors from the burbs, posing as rich vultures from Guangdong. Mr. Good’s company also tried to pass off an employee as a consumer in a weird scheme that brought the Groupon concept to selling condos. It failed, but not before making it to air.

    And how could we forget the fake lineups in places like Burnaby? People (Asians, preferably) were offered money, plus lawn chairs, portable heaters, food and porta-potties to camp out in from of a sales centre for 24 hours prior to opening. TV news crews were invited to come and witness the spontaneous news event and the stories they ran begat longer lines, people being the lemmings they are.[/blockquote]

    http://www.greaterfool.ca/2013/02/14/the-myth-of-ham/

    But even if we put all that aside, Canadians and humans in general have a bad history of xenophobia and racism. I think that when anyone starts pointing fingers at foreigners especially when there’s a long history of marginalization, suspicion and racism (as there definitely is with Canada vs China), we should ask for a higher level of evidence. Because our history has shown that our “racist” label has been all-too-well earned.

  16. Could someone please explain in real plain terms what it is that those who believe there is a problem in Vancouver’s real estate market with the flow of capital, supposedly originating from outside our nation, into residential real estate.

    Is the answer disincentives, taxes, bans, etcetera on certain people from buying, owning or renting residential real estate? If so, who would be subject to such measures? Would they be imposed on only non-residents, those with Canadian residency status not occupying the real estate, all new immigrants who pay a certain amount to buy a home the reside in (full-time or part-time), their relatives, newly naturalized Canadian citizens who still have offshore business investments/income and invest in revenue producing residential real estate in Vancouver (or should it be all of BC or all of Canada), anyone who originates from China, anyone who appears different than you?

    1. Scanning these posts i would say that the fears stem from a perceived unfair advantage of foreigners not playing by the the rules (or struggling as the average middle class Canadian currently is). Perhaps its like a soccer game involving 10 year olds and a large kid five years older shows up and starts dominating the game. You can’t compete even though you have been brought up for years in a system of soccer leagues that train players at the same skill level and age group. Will we ever be able to play again or be resigned to the bench? Sure you can play, but in what league? and are you able to adjust your expectations accordingly?

    2. The argument is that it is more desirable for the community that real estate should be sold to people who are active and present in the community. There is a feeling that there are a significant amount of properties being sold purely as investment vehicles to people who are not present in the community and are not active in the community. The argument is that investment properties are causing a notable increase in price, and because the investments are coming from persons outside the community, the rising prices are detached from the day to day reality of people in the community.

      I’m using the word “feeling” because we have barely any real statistics at all about this and so it’s impossible to have an informed discussion. It’s disappointing that it appears that the various groups (politicians and business and real estate organizations) with a vested interest in maintaining the status quo do not want an informed discussion to occur.

    3. Bob Ransford, I put forth my solution above. To me it doesn’t seem unreasonable. Another would be to apply a stiff luxury tax on all homes over a certain amount.

      I can certainly understand why the real estate and development industry in Vancouver is unwilling to have the issue looked at closely. After all, they’ve managed to free Vancouver home prices from the constraints of our rather mediocre wages. However that does not make for a more livable city.

      1. “stiff luxury tax on all homes over a certain amount” – yes this. Building more million dollar condos is not helping to solve our housing issue, is it?

        Also, I own property in New Brunswick and as a non-resident I pay an extra portion of property tax (double, actually). It boggles my mind that this is not in effect in BC.

        Given the insane income gap we have developing here, extracting money from ridiculous luxury properties and non-residents would be a great start to trying to refocus the housing market away from luxury investment condos towards something people living & working here actually need/want. If nothing else, it will create a pool of money so the government can build housing for those who are increasingly unable to afford Vancouver.

  17. I could care less what the cause of the inflated housing prices are. The question is will politicians do anything about it? If Gregor Robertson or Christy Clark could flip the magic policy switch tomorrow and cause housing prices to drop by 30%, would they? The greatest threat to the Vancouver’s economy might be the high housing prices, but until the renting population hits 60%-70%, I doubt any politician will be willing to rock the boat. There are too many housing owners who would lose hundreds of thousands of dollars.

    You can’t make housing more affordable while protecting the investment of anyone who owns real estate. The two are mutually exclusive.

    1. If you decide overnight that every lot owner has now the right to add another house on their lot: the price of it will mechanically increase (to reflect the increased yield potential of the lot: typically 200k increase on a 33×122 foot lot):

      What you get is just a way more expensive real estate, with barely no effect on the rental market

      if you send market signals that it is perfectly OK to tear down heritage houses to build luxury condos: you are entertaining wild land speculation

      if you allow lot division (in Toronto, lots as narrow as 17 feet are common token):
      that protects the investment of current owners, while making house ownership way more accessible for new entrants

      Does there is a chance that gonna happen?

      check who are the financial backer of Vision and co. and you will quickly find out that anything in the way of land assembly will not be on the menu of a municipal election…

    2. “The greatest threat to the Vancouver’s economy might be the high housing prices, but until the renting population hits 60%-70%, I doubt any politician will be willing to rock the boat”

      The home ownership rate in Canada is approaching 80%. This scenario you’re painting could only happen if virtually all current home owners sell to a small cadre of investors. This would be a calamity, a massive economic meltdown. To imagine that this is likely or that no action would be taken sooner is bonkers.

      1. Home ownership in Metro Vancouver is around 65%. In many Vancouver neighbourhoods there are more renters than owners. As New Yorker article ends, “we’d better get used to being tenants.”

        I hope action will be taken sooner. I just don’t see any politician willing to risk the $163 billion in real estate holdings that baby boomers are holding onto in Metro Vancouver.
        http://www.theglobeandmail.com/news/british-columbia/boomers-sitting-on-163-billion-in-real-estate-holdings/article18770674/

        1. cv – thanks for the info, I stand corrected.

          Regardless, a flip from 35% renters to 60% (or 65% ownership to 40%) would still mean that a third of current home owners would have to sell to investors. While the numbers have changed a bit, that’s still an apocalyptic change. I don’t think you appreciate the magnitude.

          To put this into perspective, in 2007 before the US housing bubble burst, ownership rates were 69%. They just hit their lowest level in decades – 65%. A trillion-dollar TARP program, a major economic depression, bank bailouts, and seven years to sink in to get a 4% shift in ownership rates, and you’re saying that politicians here won’t do anything until we suffer through something to shift rates six times more? That’s sheer nonsense.

          If there is a shift to renting (and I think it would be a good idea) it will take a massive cultural shift through decades of government intervention. It’s not something that will ever precede government action.

    3. Canadian veggie, real estate is and should not be a guarantee. When you consider the massive increases in property value, why is the most entitled generation entitled to this windfall? As for those who bought high it should be a lesson to not pay more than something is worth… and not to bank on poor futures for future generations. If you are using your home to live in, which is the purpose of homes, to provide shelter ( a basic human necessity) then falling property values mean you will pay less tax .. provided you aren’t living out of your means excessively.

    4. canadianveggie, for some reason politicians won’t even put in place tools to measure the amount of foreign buyers. So instead we get people claiming that because the property tax bill goes to a Canadian address the owner automatically must be a Canadian, which is absurd. Surely if the amount of foreign owenship is insignificant, it would be better have hard data to support that claim. Why haven’t they bothered to put those measurements in place?

    5. canadianveggie,

      “The greatest threat to the Vancouver’s economy might be the high housing prices”

      Is there a Vancouver economy other than realestate? The New Yorker said it all — Vancouver has nothing except “comfort and security”, and you can’t tax that. There’s no industry lobby to battle the developer lobby over land use so they can grow companies. There’s no cultural facilities with enough cachet to worry the govt that empty condos make bad patrons. Nope, we only have one group that has the ear of the govt. And the message is condo, condo, condo. And, when you run out of land, rezone for more.

      Developer hearing in Seattle: “Sorry, we cannot rezone this huge swath of land to build condos because amazon.com is planning to use these lots to fuel their expansion of 30,000 employees. Amazon is also going to help pay for transit upgrades including the streetcar. We expect this to become a very vibrant area in the next few years. A lot of restaurants and services are already moving in.”

      Developer hearing in Vancouver: “Sure, let’s rezone for condos. Most of the land is vacant anyway. And, the buildings that aren’t are just tenanted by some small local retailers that are barely surviving. We’re raise people’s taxes to pay for transit upgrades. Oh, big news Mr Mayor! Big news! Call the media! Let’s make a big announcement! Hootsuite just signed a lease that can fit up to 400 people…. if we subsidize them. I hear their employees like to ride bikes!”

        1. I’m not comparing amazon to Hootsuite. And, it has nothing to do with transit. Perhaps, I’m typing too fast.

          I’m comparing Seattle’s need to balance land use amongst many multiple economic interests versus Vancouver’s need to live off condo CrACk.

  18. and not allowing more condos somehow makes condos cheaper in Vancouver ? Demand begets supply, not the other way around usually. Demand comes from folks moving here, like me and 100,000’s of others who came here. Oh gee, 100 years ago Vancouver was only 20,000 .. and therefore most folks moved here.

    Vancouver is land locked, and as such prices always have been high and always will be due to location on ocean/mountains and weather. I heard the same song “prices are too high” when I first moved here in the late 80’s. “who can afford a bungalow for $250,000 in Burnaby. There is a bubble”. Today that same bungalow is at least $1M and will be $2M in 20 years.

    There is no real estate bubble in Vancouver nor are prices overly high due to demand. Other cities, even in Taiwan or Europe or Asia are not much cheaper when comparing apples to apples, i.e. same quality and location. Plenty of cheaper condos or houses further east in New West, Langley, Maple Ridge or Abbotsford .. or even further east in Vernon or Kamloops. No one has the right to a cheap condo with waterview 2 blocks from the beach.

    For all those bemoaning high prices: what IS the answer ? No more immigration ? No more foreign ownership ? As none of those will likely happen. What may happen is this: Higher property taxes for higher end condos for non-resident owners, but that does not really affect prices below $2M.

    So what IS the answer to high house or condo prices folks ???

    1. Thomas, Yep. I agree. Anyone that wants an affordable family-sized house/condo/townhouse needs to suck it up and move to the burbs. Vancouver is only going to become more expensive as prices become even more decoupled to local incomes due to wealthy immigrants and investors.

      Personally, I really believe we need to openly admit that this is our future. And only then can we move forward. In that, I mean, stop pretending that we can somehow keep prices in Vancouver-proper affordable by continuing to squeeze more people in. Sprawl is necessary to keep prices in line with local incomes. Admit it and plan for it instead of trying to deny it.

      I think of New York. Imagine if they refused to build bridges in order to prevent sprawl. Imagine if they tried to force everyone onto Manhattan. Brooklyn gentrified because people moved to more affordable neighbourhoods. They looked in the mirror, admitted they couldn’t afford Manhattan, and now Brooklyn has come into its own as a decent place to live.

      We could avoid those growing pains if we properly plan it. We’re burying our head in the sand over sprawl. It is happening anyway. But, it’s ugly and unguided because we refuse to plan it. Because in doing so, we’d be conceding defeat.

      1. We need “sprawl” and densification in certain locations downtown or along transit nodes. it is not and “either-or” but an “and”.

        Some folks love density and highrise living, and some do not. A large city like Vancouver needs to offer ALL housing choices: rentals and ownership, huge mansions with 2 acre yards, townhouses, single family dwellings, duplexes, townhouses, condos, low-rise, highrises etc .. and it needs a transportation network that assumes buses, trucks, cars, motorcycles and smaller ones like e-bikes, e-scooters, mini-cars .. as the individual car will be with us for at least 100 years. It might not be a 6 person car but a 2 person mini-e-car, yet still an individual vehicle.

        The issue is proper pricing, for example road pricing. An e-car from Abbotsford or Langley ought not to use roads or bridges for free that used to be financed by gasoline taxes, for example.

        So the Metrovan mayors are on the right track here with their suggested car fees based on engine size and road tolls. Of course, they also ought to clean house first and bring wages and benefits in line with market principles as today they are not with too much fat in the system (i.e. taxes are too high, thus resistance from the Liberals). An amalgamation of all 22 cities in MetroVan ought to be discussed, incl. less union rights and wage constraints as we see now in the teacher conflict. Tough times ahead across the (by and large overpaid) entire public sector.

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