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There's potential to destroy the fabric of a society when the residential real estate is sold off to foreign buyers. The dream of most ordinary people is to ow

• dmix 11y ago
  a) The houses are being purchased from people domestically, that money is not being extracted from the local economy... it still exists in liquid form and can be reinvested back into the economy. Foreigners can even provide higher prices than local buyers, creating a higher volume of capital than was previously available to the local economy. b) If people can't afford to purchases these houses in the long run then prices will decline and foreigners will stop buying them. The only serious downside is where there is artificially limited supply such as in places like SF.
• abandonliberty 11y ago
  And we have to stop blaming the buyers. >The Chinese government’s top envoy in Vancouver says the city’s skyrocketing house prices and affordability crisis are due to a lack of regulation in the booming real estate market. >Ms. Liu said this situation would not be allowed to occur in China http://www.theglobeandmail.com/report-on-business/economy/housing/chinese-envoy-says-lack-of-oversight-behind-vancouvers-house-price-crisis/article25085285/ http://www.theglobeandmail.com/report-on-business/economy/ho...
  • e15ctr0n 11y ago
    From TFA > "The price of property in Beijing is very high" > "If you consider how expensive housing is in Beijing or Shanghai, this is a bargain." So, the Chinese government is clearly not doing anything about high housing prices in Beijing and Shanghai.
    • peteretep 11y ago
      > the Chinese government is clearly not doing anything > about high housing prices in Beijing and Shanghai Fucking with the middle-class's nest egg is not the way to a stable society.
    • mapt 11y ago
      Um... What? Beijing and Shanghai have just undergone building booms of a scale for which one can scarcely find historical comparisons. 3-5% growth rates in urban population for three decades. More people are being added to Chinese cities every year or two than live in all of California. http://apps.chicagotribune.com/news/chicago-architecture-in-china/live.html http://apps.chicagotribune.com/news/chicago-architecture-in-... http://www.jacksonfuller.com/wp-content/uploads/2012/03/san_francisco_population.png http://www.jacksonfuller.com/wp-content/uploads/2012/03/san_... https://www.washingtonpost.com/news/wonk/wp/2015/03/24/how-china-used-more-cement-in-3-years-than-the-u-s-did-in-the-entire-20th-century/ https://www.washingtonpost.com/news/wonk/wp/2015/03/24/how-c...
      • e15ctr0n 11y ago
        Obviously, the supply of new housing is not enough to meet the demand, or prices would have fallen to affordable levels.
        • mapt 11y ago
          Prices don't have to fall immediately for the principle to hold, and they're also not immune from the effects of rich people looking to bid up arbitrary assets with shorter-term bubble investment. Prices in Beijing are actively propelling development of all the smallest properties, to the point that historical hutongs are now endangered historical relics. https://psuchina.wordpress.com/2014/07/24/endangered-places-exploring-the-hutong-in-beijing/ https://psuchina.wordpress.com/2014/07/24/endangered-places-... That releases pressure on prices, one way or another. Prices would be much higher if Beijing banned new development. "demand being met" is not a boolean condition with commodities, much less something as complex as housing, with its constantly repriced financial assets, varying quality of good, and varying amounts of fluidity & cycles of construction. In San Francisco, they're just rising and rising without driving any new development. The government funds single-family-homeownership to an extraordinary degree with the mortgage system we've set up, and this distortion has created an odd body politic where nobody favors permitting property rights to be exercised, where the population has a veto on the proper functioning of the real estate market. So new development is functionally banned. Broken city, too much democracy. Why would one want to move there from one's small hometown in Kansas? In a functioning economy, one tends to move to where one's talents have the highest price, and everyone, in the end, benefits.
• revelation 11y ago
  It seems there is a lot more NIMBYism, reckless lending and baby boomer lobbying expecting their "investment" to triple going on than chinese bogeyman putting the dream of their own suburban home out of reach for the ordinary folks.
• evanpw 11y ago
  I would expect this to have a positive influence on national security. If rich, influential Chinese people own a lot of property in the United States, that means that they have more to lose from bad relations between the US and China.
  • hoodoof 11y ago
    I expect property owners to demand a say in the country that they own part of.
    • evanpw 11y ago
      Can you be more specific about the mechanism? If they aren't citizens or even permanent residents, what influence do they have? I can understand an argument saying that allowing a larger market is bad because it increases demand and drives up prices, but I honestly don't see why you would consider a foreign buyer worse than a domestic one. If these are people trying to get themselves or their assets out of China, they evidently aren't pushing the agenda of the Chinese government.
      • e15ctr0n 11y ago
        From TFA > Investments in the United States provide another advantage: a pathway to a green card. Chinese investors have been particularly aggressive at using a federal visa program called EB-5 that allows overseas citizens to put $500,000 to $1 million into a project that will create at least 10 jobs. Investors can get a green card in about two years. So far this year, 86 percent of the EB-5 visas issued worldwide have gone to Chinese. Green Card = permanent resident
        • evanpw 11y ago
          So the mechanism by which this harms national security is: Chinese person buys a house for $1 million -> gets a green card -> moves to the United States -> waits 5 years -> becomes a citizen -> elects a pro-Chinese government? Or is the argument that immigration in itself harms native-born citizens, and this is a way to avoid some of the restrictions?
• jacquesm 11y ago
  > When prices are pushed out of the range of ordinary people then the citizens have just sold their home overseas and can only rent it back. Did America just run out of land? You can always build new homes, if people are willing to spend more on those places than they're worth let them and simply build more. Eventually the price would have to come down. If you're in a very small nation, say Luxembourg or Monaco then yes, it's a problem. But the US has so much undeveloped land it is almost wasteful and if the Chinese are willing to bankroll the next wave of construction I'd say thank you and get on with it.
  • kiba 11y ago
    The political climate of America conspired against robust and correct reaction to housing shortages.
    • Balgair 11y ago
      Wow. This is, at the largest, a state level issue. Mostly, it is a county or city level issue. Here, I'll go with a story. I was watching 'Star Trek: Into Darkness', the 'new' set of films. There's a scene where they chase Benedict Cumberbatch about on the top of a flying ambulance in the skyscrapers of the future San Fransisco. My brother, who lived at the time on Geary st. and was running for a seat on the business commission, was telling me that scene was too fantastic for him. Not because, you know, aliens and star ships. No, but that in a mere 200 years the SF housing and construction boards would allow that many skyscrapers. Proper city planning to him was more fantastic than Star Trek. Now, people really want to live in SF these days. It's not a political climate that is keeping them from building more apartments. It is real stupid, very tiny, small world and small people, corruption and bribery. It is the same story as it always has been. People complain but don't do anything about it.
• Asbostos 11y ago
  These guys are buying to move in and settle down. That's exactly what's good for community and society. You're talking about foreign landlords who rent to local people, which is different. Just because they're Chinese, doesn't mean they're the same Chinese people you're afraid of. They're still human beings with families and kids, as you saw in the video. People all over the world need to get over their tribal "yellow peril" and "Asian invasion" mindsets. Historically Chinese immigrants were disliked because they worked too hard for the locals to compete with, now they're too rich for the locals to compete with. What next, their kids will do too well at school for the local kids to compete with?
  • kareemm 11y ago
    > These guys are buying to move in and settle down. Hard to say. If it's anything like Vancouver (mentioned once IIRC in the article), many purchases happen for two reasons. First, to get money out of China, and second, to provide a place for Chinese kids to get a "better" education. According to a study done by a recent Vancouver urban planner, a major chunk of new home purchases by ostensibly Chinese buyers were to students or homemakers (see slides 18-23): http://www.slideshare.net/ayan604/ownership-patterns-of-single-family-homes-sales-on-the-west-side-neighborhoods-of-the-city-of-vancouver-a-case-study http://www.slideshare.net/ayan604/ownership-patterns-of-sing... This was for homes with a median value of 1.3M and avg value of 2.3M. "Parachute kids" like the above buyers are super common in Vancouver. I would assume, though, that if their intention was to stay, the entire family would move.
• forrestthewoods 11y ago
  I agree with much of what you say. But when people saying things like "It's the end game of greed" I tend to stop listening. It's such an unqualified statement it has practically no meaning. End game? There's nothing "end" about where we are. "Sold everything". By everything you mean a portion of luxury real estate in select cities. I actually think international money in real estate is a problem. One I'd even be willing to discuss certain measure of regulation. But it's impossible to do that with Fox News level hyperbole.
• nostrademons 11y ago
  The same fears were expressed when the Japaneses were buying up prime real estate in U.S. cities (Rockefeller Center, etc.) in the late 80s. The result of that was that the Japanese asset bubble collapsed, all the (generally heavily-leveraged) foreign buyers found they were broke, and Americans bought back the properties at fire-sale prices. I wouldn't be surprised if the same thing happens again when the Chinese asset bubbles crash. Locals have a huge information advantage over absentee landlords; this is far more likely to end poorly for Chinese buyers than for American residents.
  • e15ctr0n 11y ago
    It can't happen again because the Chinese have paid the full price up front in cash. Also, many of them want to become American residents.
    • untilHellbanned 11y ago
      The point is the Chinese will need to get that cash back when the rest of their assets are devalued.
    • meric 11y ago
      They borrow cash from China using assets there for collateral to pay for US housing with cash. If they need the cash back for margin calls they will still need to sell houses.
  • thro1237 11y ago
    I remember an anecdote where the New York City mayor called up the Chief of Police Department asking him to stop any Japanese guy carrying NYC real estate with him to Japan :)
• gotchange 11y ago
  Your post reeks of xenophobia, tribalism and protectionism. No country is buying your home country. Just a bunch of foreign individuals snapping a few properties in a certain segment of the real estate market (upscale) helping the local and national economy alike. If you're really think that every foreign RE investor is a secret spy working for some shady state-sponsored organization to subvert your country, it's really a shame.
  • hoodoof 11y ago
    None of what I wrote said any of that but you managed to read it with that message in your head.
• rglullis 11y ago
  Sorry to put it so bluntly: it is this kind of backwards mentality from your comment that really makes me despise American "progressives". The cognitive dissonance is strong with this one. - The dream of most ordinary people is to own their own home (...) we have sold everything. Who is this "we" you speak of? Are people born in the US entitled to real estate when they are born? I don't know about you, but if I were priced out of my area because foreign money was flooding my country, I would just invest in real estate developments in other parts of the country (or any other part of the world where I could be free to invest, away from stupid nationalist laws like you defend) which were still cheaper, undervalued and not affected by the bubble. Best case scenario, I get to grow my personal wealth and I would get to be making my country even richer. Worst case, I would be living in a place that is affordable. - selling real estate to other countries The real estate is not being sold to China. It is being sold to a Chinese. The Chinese investing would like to see their investments safe, so it will be in their best interest to keep things from blowing up. Thank heavens, globalization is already here, and it is not only supposed to benefit the people in rich countries to buy cheap things on Walmart. It is also supposed to help the poor countries to develop stable institutions, which can only come if there is free flow of people and work. Deal with it. - If the government cared about its citizens then selling residential real estate to non-citizens/permanent residents would be outlawed. So, you want Government to be Big Mommy that accepts the poor people in dire situations but God forbid some foreign that beats you in your own game? Fuck "progressives". - The disaster can't be undone because governments will see the flood of cash and tax it. And then they will take the tax money and try to provide public services to the people that do live there? Oh, the horror. Cry me a river.
  • threatofrain 11y ago
    Is this one layperson attacking another layperson, speaking as if you were different? Of course in a forum where we expect a supermajority of people to be laypersons to this domain, it is gross to use such an authoritative and dismissive tone. We should not want to hear the noisy indignation of someone pretending to have authority through language like "Big Mommy" and "Fuck progressives". If you speak this way, show the reach of your intellectual authority, rather than your cheap indignation. Economic modelling is not easy. You make it sound like you have a command of something. Show us your substance.
• panglott 11y ago
  Mostly this story is about prosaic immigration. People want to live in houses, and so Texas is building lots of subdivisions for them. Lots of these people are from China, so now some of these subdivisions are largely Chinese. It's nothing more sinister than ordinary immigration.