Everyone talks about it – except our leaders. There has been little sustained comment or debate by elected officials, local or provincial, on the forces and influences that have pushed the value of real estate in this city into the global market. And not just the world market generally but to very highest levels, with comparisons to London, New York and Shanghai.
Of course there’s fear of unleashing forces of xenophobia and racism, but the result is that there’s no apparent willingness to discuss the issue in our legislatures and council chambers. Our local leaders are dealing with this like the federal Conservatives deal with climate change: Because there’s nothing that can seemingly be done within their ideological constraints, they simply choose not to talk about it.
That can’t last.
In the meantime, the conversation is held in, well, conversations everywhere else – and in the media.
Here are some articles that popped up coincidentally in my feed, and one on the TV news, in the last day.
Thomas linked to the first:
Gold’s traditional role as a store of wealth has been usurped by contemporary art and apartments in cities such as New York and London, according to Laurence D. Fink, head of the world’s biggest asset manager.
“Historically gold was a great instrument for storing of wealth,” the chairman of BlackRock Inc. said at a conference in Singapore on Tuesday. “Gold has lost its lustre and there’s other mechanisms in which you can store wealth that are inflation-adjusted.” …
“The two greatest stores of wealth internationally today is contemporary art….. and I don’t mean that as a joke, I mean that as a serious asset class,” said Fink. “And two, the other store of wealth today is apartments in Manhattan, apartments in Vancouver, in London.”
Startling to see apartments in Vancouver in the same category as “stores of wealth” in Manhattan and London. Not a category that is going to do us a lot of good in the long run – or at least most of us. But for those who benefit in the short run, they serve as a buffer for those who might want to change the rules of the game.
Maybe that’s changing too, if this GlobalBC news piece is an indication:
The Financial Post also ran this item a few days later:
Canada’s housing market is now heavily influenced by non-permanent residents, which make up the fastest-growing demographic force in the county, according to a new report.
CIBC World Markets Inc. deputy economist Benjamin Tal says Ottawa needs to consider the impact on the economy of this group before it makes any more changes to the temporary workers program.
“It’s not an insignificant element in the mosaic we call the housing market, that’s what I’m saying, especially in the rental market,” said Tal, in an interview. “You can assume many of these people rent and [that affects] investors and the condo market.”
He wrote in his report that non-permanent residents now number almost 770,000, which is a record high. Almost 50 per cent of that figure is made up of workers, with about 38 per cent students. The rest of the group falls into the humanitarian or refugee category.
“The pace at which this category is growing is also unprecedented,” Tal wrote, adding that, over the last 10 years, 450,000 non-permanent residents have been added to the country.
When condos on the south shore of False Creek back in the late 1980s were pre-sold in Hong Kong before they became available in Vancouver, it created a backlash that resulted in agreement by the developers that it would not happen again. Will the same happen this time? – even though, as Tsur Somerville argues in the interview, commercial real estate is unlikely to remain vacant, the issue that is shaping public anxiety about residential real estate.
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“No one buys an office building to hold it vacant. People buy office buildings because they want rent. Who owns it doesn’t matter because they’re going to go out and get it,