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This seems to be a direct result of capital flight from China. Wealthy chinese who are able to get their money out (through corruption, money laundering, or ot

This seems to be a direct result of capital flight from China. Wealthy chinese who are able to get their money out (through corruption, money laundering, or otherwise) are looking for somewhere safe to park their money for the inevitable decline in value of the yuan. China can only artificially peg their money to the dollar for so long, until they run out of dollars, and they are drawing down their reserves at a record pace due to the appreciation of the dollar. Wealthy chinese know this, and use real estate in markets such as Vancouver, SF, and NYC, because it's fairly low risk and likely to appreciate. See http://www.npr.org/sections/thetwo-way/2016/01/13/462994857/u-s-treasury-cracks-down-on-luxury-home-money-laundering http://www.npr.org/sections/thetwo-way/2016/01/13/462994857/... and http://www.nytimes.com/2016/01/14/us/us-will-track-secret-buyers-of-luxury-real-estate.html http://www.nytimes.com/2016/01/14/us/us-will-track-secret-bu...

pkaler 11y ago
I'm standing at my desk in my apartment that I pay $1589/month for. An equivalent apartment in SF or NYC would be $3500 or higher. The problems are two-fold. 1) Vancouver hasn't created a single-family detached home lot since the 1970s. There is an ocean to the west, the US border to the south, Burrard Inlet and mountains to the north. There just isn't any land. The only way to expand is east into the Fraser Valley. The single-family detached home is dead. Live in a condo. Everyone gets a view. Everyone gets sunshine. Everyone gets services. Everyone gets a park a block away. https://en.wikipedia.org/wiki/Vancouverism https://en.wikipedia.org/wiki/Vancouverism 2) Vancouver companies pay dick-all for salaries because Vancouver companies make dick-all for revenue. Everyone that lives here and can afford works or consults for a company that is not from Vancouver. A tech company that can't afford to pay an employee to rent a $1589/month apartment is not a tech company.
- illumin8 11y ago
  If property values were tied directly to incomes, as they are in any normal market, and what you are saying is true about salaries being low, the Vancouver market would not be as hot as it is right now. The market is being artificially inflated by foreign buyers. Don't forget that Vancouver is a very attractive destination for wealthy Chinese multi-nationals. This is the same phenomenon that has wealthy Chinese buying $5 million luxury apartments in Manhattan through shell companies to hide their identity.
  - pkaler 11y ago
    "If property values were tied directly to incomes..." They are not because there is no land left. It is impossible to buy a single-family detached home because there is no land left. Renting a condo is still very economical compared to other large cities.
  - logfromblammo 11y ago
    I saw an answer on Jeopardy! recently that described Vancouver for one of the daily doubles. Oglethorpe math professor Philip Tiu apparently had a long enough brain fart before responding correctly that I had time to yell at the television, "How do you not know Vancouver?! You're Chinese!" My spouse immediately informed me, "That's racist." We then had a short discussion about the ways in which the Chinese nouveaux riches expatriate their assets.
    - moron4hire 11y ago
      It's not racist, but it is prejudiced. Racism is basically "prejudice + power". You don't have any power over the person on the screen, so your comment is just prejudiced. If, on the other hand, you were using your hypothetical sway on social media to besmirch him in some way, that would be racism. I'm American but I've never read "To Kill a Mocking Bird". "How could you have never read an iconic piece of American literature that literally every public school child between the 70s and 90s was forced to read in highschool?!" Easy: I didn't go to public school, and I wasn't in highschool until the new millennium.
      - logfromblammo 11y ago
        It was a stereotypes-based joke. It's like pushing a boulder rolling downhill as it passes by. You're not so much using your own power as adding just a little to the destructive power that is already there. In this case, the stereotype is "all Chinese people own a house/condo in Vancouver", which is an abuse of the conditional probability that a property is owned by a Chinese person given that it is in Vancouver (and also clearly impossible, due to there being somewhat fewer than a billion residences in Vancouver). Imputed property ownership is not a derogatory stereotype, so I don't feel particularly bad about perpetuating it. I was forced to read _To Kill a Mockingbird_. As a result of the forced consumption and interminable in-class literary dissection, I don't have a very high opinion of it, and only a vague recollection of the plot. Nothing could make me hate a book quite like English class. But that's actual fact of having a national literary canon shoved down our throats, and we're looking at non-factual stereotypes here. As an American, you would have had no chance at all at answering the question, because Americans don't know where anything is outside the borders of the U.S., unless there is a war happening there, and then we can correctly identify the continent it is on about 80% of the time. To the stereotypical American, Vancouver might be barely recognizable as a city somewhere in Washington state, just as Montreal is in Vermont, Toronto is in Ohio, Windsor is a suburb of Detroit, and Ottawa is an illusion maintained by the Canadian military to distract its enemies from the real capital in Toronto. The movie Canadian Bacon is based almost entirely on this national stereotype, and the Canadian national stereotype.
- jb613 11y ago
  > "A tech company that can't afford to pay an employee to rent a $1589/month apartment is not a tech company." Tech companies don't have to be in Vancouver. The fundamental component that a tech company requires is talent. There's relatively little distinguishing talent in Vancouver that can't be found in several other comparable jurisdictions within Canada. A tech company that pays higher wages simply because the employee lives in a high-cost jurisdiction is a tech company that is less competitive. That's the from the company view, now to address to your personal view: > "I'm standing at my desk in my apartment that I pay $1589/month for." and: > "The single-family detached home is dead. Live in a condo. Everyone gets a view. Everyone gets sunshine. Everyone gets services. Everyone gets a park a block away. " Yikes! That rent adds up to $381,000 over 20 years. You can easily find single-family detached homes for that price in places like Waterloo, Ottawa, or Montreal suburbs and in 20 years have it paid off and own an asset while Vancouver renter will have no asset and more rent to pay. Those 3 locations have comparable tech job prospects as Vancouver with a whole lot more sunshine in the winter.
  - sospep 11y ago
    > Tech companies don't have to be in Vancouver. Agree with you 100%, but they are. And a good portion of those are in downtown or in the city proper. Why? I can see if your an Amazon or Microsoft and need to hire 100+ developers but the majority of Vancouver startups need nowhere near that many people. Why would you locate your startup in Vancouver?
    - cuddlybacon 11y ago
      Vancouver has lower tax rates for businesses compared to the surrounding suburbs.
    - jb613 11y ago
      apparently those corporations can find the people willing to work at those salaries. It's up to the tech workers to decide whether the location is worth the lower bank account.
dghughes 11y ago
> This seems to be a direct result of capital flight from China. It's even happening to tiny PEI in the east we have seen a massive surge of Chinese people (to clarify yes from China) investing in and living in the province. Five years ago you could walk down the street and it was typical small town Canada last summer I went to a Starbucks and every single person was Chinese. There are now at least two if not three Buddhist monasteries too. I'm not complaining I like the new investment and more people living here I'm saying it's not just a Vancouver or Toronto thing. Although here it's more business investing here not so much speculative condo buying.
- illumin8 11y ago
  I wouldn't even say it's speculative condo buying - it's more like treating the condo as a piggy bank. It's considered a safer investment because it can be purchased through a shell company (LLC), hiding the true identity of the buyer, and unlike the funds in a bank account, can't easily be seized. There was a well known phenomenon: http://www.nytimes.com/2015/11/29/business/international/chinese-cash-floods-us-real-estate-market.html http://www.nytimes.com/2015/11/29/business/international/chi... "In London, Chinese investors are purchasing high-end apartments in wealthy neighborhoods and big skyscrapers in the financial district. In Canada, they are paying $1 million for modest Vancouver bungalows. In Australia, a Chinese sovereign wealth fund bought nine office towers, one of the biggest real estate transactions in that nation’s history."
  - pkaler 11y ago
    There is no such thing as an LLC in Canada. You are either a federal corp or a provincial corp. http://www.canadabusiness.ca/eng/page/2853/ http://www.canadabusiness.ca/eng/page/2853/
    - illumin8 11y ago
      The shell company used to purchase high-end property is mainly a strategy I learned about that is prominent in the Manhattan luxury apartment market. If someone like Brad Pitt is buying a $10M condo, and doesn't want his name in the public property records, he will buy it with an LLC. This trick is also used by foreign buyers to hide their identity, especially if their money is a result of criminal activity.
emodendroket 11y ago
I mean, yes, but who says cities have to allow Chinese investment to dominate the market rather than the people who live in these cities? Maybe that is the best political choice, but it is a political choice and we all pretend it's a neutral and inexorable natural law.
- sospep 11y ago
  > who says cities have to allow Chinese investment to dominate the market rather than the people who live in these cities? Vancouver's dirty little secret is that the real estate market IS the economy. If restrictions were placed on foreign investment and this RE bubble burst, the city/region would be in for a world of hurt. If you know what $30 oil is doing to our neighboring provinces, you would get an idea of what the future holds for Vancouver without it's "foreign investment" fix.
pnathan 11y ago
This is anecdoteally part of the reason for the Seattle area house price rise.
ConfuciusSay02 11y ago
You're right, but the implication of your post is that there's nothing Canada could do about the problem. The correct response is that Canada should implement Australian-style restrictions on foreign ownership of real estate. This problem has been solved before, it's not that hard. It would suck for those who bought into the game late, those in the high-end RE business, but the benefits of having a real estate market that has actual price discovery based on the population who could actually live in the properties is definitely worth it, because housing would become more affordable, disposable income would increase, and consumer debt would decrease.

pkaler 11y ago

I'm standing at my desk in my apartment that I pay $1589/month for. An equivalent apartment in SF or NYC would be $3500 or higher. The problems are two-fold. 1) Vancouver hasn't created a single-family detached home lot since the 1970s. There is an ocean to the west, the US border to the south, Burrard Inlet and mountains to the north. There just isn't any land. The only way to expand is east into the Fraser Valley. The single-family detached home is dead. Live in a condo. Everyone gets a view. Everyone gets sunshine. Everyone gets services. Everyone gets a park a block away. https://en.wikipedia.org/wiki/Vancouverism https://en.wikipedia.org/wiki/Vancouverism 2) Vancouver companies pay dick-all for salaries because Vancouver companies make dick-all for revenue. Everyone that lives here and can afford works or consults for a company that is not from Vancouver. A tech company that can't afford to pay an employee to rent a $1589/month apartment is not a tech company.

illumin8 11y ago
If property values were tied directly to incomes, as they are in any normal market, and what you are saying is true about salaries being low, the Vancouver market would not be as hot as it is right now. The market is being artificially inflated by foreign buyers. Don't forget that Vancouver is a very attractive destination for wealthy Chinese multi-nationals. This is the same phenomenon that has wealthy Chinese buying $5 million luxury apartments in Manhattan through shell companies to hide their identity.
- pkaler 11y ago
  "If property values were tied directly to incomes..." They are not because there is no land left. It is impossible to buy a single-family detached home because there is no land left. Renting a condo is still very economical compared to other large cities.
- logfromblammo 11y ago
  I saw an answer on Jeopardy! recently that described Vancouver for one of the daily doubles. Oglethorpe math professor Philip Tiu apparently had a long enough brain fart before responding correctly that I had time to yell at the television, "How do you not know Vancouver?! You're Chinese!" My spouse immediately informed me, "That's racist." We then had a short discussion about the ways in which the Chinese nouveaux riches expatriate their assets.
  - moron4hire 11y ago
    It's not racist, but it is prejudiced. Racism is basically "prejudice + power". You don't have any power over the person on the screen, so your comment is just prejudiced. If, on the other hand, you were using your hypothetical sway on social media to besmirch him in some way, that would be racism. I'm American but I've never read "To Kill a Mocking Bird". "How could you have never read an iconic piece of American literature that literally every public school child between the 70s and 90s was forced to read in highschool?!" Easy: I didn't go to public school, and I wasn't in highschool until the new millennium.
    - logfromblammo 11y ago
      It was a stereotypes-based joke. It's like pushing a boulder rolling downhill as it passes by. You're not so much using your own power as adding just a little to the destructive power that is already there. In this case, the stereotype is "all Chinese people own a house/condo in Vancouver", which is an abuse of the conditional probability that a property is owned by a Chinese person given that it is in Vancouver (and also clearly impossible, due to there being somewhat fewer than a billion residences in Vancouver). Imputed property ownership is not a derogatory stereotype, so I don't feel particularly bad about perpetuating it. I was forced to read _To Kill a Mockingbird_. As a result of the forced consumption and interminable in-class literary dissection, I don't have a very high opinion of it, and only a vague recollection of the plot. Nothing could make me hate a book quite like English class. But that's actual fact of having a national literary canon shoved down our throats, and we're looking at non-factual stereotypes here. As an American, you would have had no chance at all at answering the question, because Americans don't know where anything is outside the borders of the U.S., unless there is a war happening there, and then we can correctly identify the continent it is on about 80% of the time. To the stereotypical American, Vancouver might be barely recognizable as a city somewhere in Washington state, just as Montreal is in Vermont, Toronto is in Ohio, Windsor is a suburb of Detroit, and Ottawa is an illusion maintained by the Canadian military to distract its enemies from the real capital in Toronto. The movie Canadian Bacon is based almost entirely on this national stereotype, and the Canadian national stereotype.
jb613 11y ago
> "A tech company that can't afford to pay an employee to rent a $1589/month apartment is not a tech company." Tech companies don't have to be in Vancouver. The fundamental component that a tech company requires is talent. There's relatively little distinguishing talent in Vancouver that can't be found in several other comparable jurisdictions within Canada. A tech company that pays higher wages simply because the employee lives in a high-cost jurisdiction is a tech company that is less competitive. That's the from the company view, now to address to your personal view: > "I'm standing at my desk in my apartment that I pay $1589/month for." and: > "The single-family detached home is dead. Live in a condo. Everyone gets a view. Everyone gets sunshine. Everyone gets services. Everyone gets a park a block away. " Yikes! That rent adds up to $381,000 over 20 years. You can easily find single-family detached homes for that price in places like Waterloo, Ottawa, or Montreal suburbs and in 20 years have it paid off and own an asset while Vancouver renter will have no asset and more rent to pay. Those 3 locations have comparable tech job prospects as Vancouver with a whole lot more sunshine in the winter.
- sospep 11y ago
  > Tech companies don't have to be in Vancouver. Agree with you 100%, but they are. And a good portion of those are in downtown or in the city proper. Why? I can see if your an Amazon or Microsoft and need to hire 100+ developers but the majority of Vancouver startups need nowhere near that many people. Why would you locate your startup in Vancouver?
  - cuddlybacon 11y ago
    Vancouver has lower tax rates for businesses compared to the surrounding suburbs.
  - jb613 11y ago
    apparently those corporations can find the people willing to work at those salaries. It's up to the tech workers to decide whether the location is worth the lower bank account.

dghughes 11y ago

> This seems to be a direct result of capital flight from China. It's even happening to tiny PEI in the east we have seen a massive surge of Chinese people (to clarify yes from China) investing in and living in the province. Five years ago you could walk down the street and it was typical small town Canada last summer I went to a Starbucks and every single person was Chinese. There are now at least two if not three Buddhist monasteries too. I'm not complaining I like the new investment and more people living here I'm saying it's not just a Vancouver or Toronto thing. Although here it's more business investing here not so much speculative condo buying.

illumin8 11y ago
I wouldn't even say it's speculative condo buying - it's more like treating the condo as a piggy bank. It's considered a safer investment because it can be purchased through a shell company (LLC), hiding the true identity of the buyer, and unlike the funds in a bank account, can't easily be seized. There was a well known phenomenon: http://www.nytimes.com/2015/11/29/business/international/chinese-cash-floods-us-real-estate-market.html http://www.nytimes.com/2015/11/29/business/international/chi... "In London, Chinese investors are purchasing high-end apartments in wealthy neighborhoods and big skyscrapers in the financial district. In Canada, they are paying $1 million for modest Vancouver bungalows. In Australia, a Chinese sovereign wealth fund bought nine office towers, one of the biggest real estate transactions in that nation’s history."
- pkaler 11y ago
  There is no such thing as an LLC in Canada. You are either a federal corp or a provincial corp. http://www.canadabusiness.ca/eng/page/2853/ http://www.canadabusiness.ca/eng/page/2853/
  - illumin8 11y ago
    The shell company used to purchase high-end property is mainly a strategy I learned about that is prominent in the Manhattan luxury apartment market. If someone like Brad Pitt is buying a $10M condo, and doesn't want his name in the public property records, he will buy it with an LLC. This trick is also used by foreign buyers to hide their identity, especially if their money is a result of criminal activity.

emodendroket 11y ago

I mean, yes, but who says cities have to allow Chinese investment to dominate the market rather than the people who live in these cities? Maybe that is the best political choice, but it is a political choice and we all pretend it's a neutral and inexorable natural law.

sospep 11y ago
> who says cities have to allow Chinese investment to dominate the market rather than the people who live in these cities? Vancouver's dirty little secret is that the real estate market IS the economy. If restrictions were placed on foreign investment and this RE bubble burst, the city/region would be in for a world of hurt. If you know what $30 oil is doing to our neighboring provinces, you would get an idea of what the future holds for Vancouver without it's "foreign investment" fix.

pnathan 11y ago

This is anecdoteally part of the reason for the Seattle area house price rise.

ConfuciusSay02 11y ago

You're right, but the implication of your post is that there's nothing Canada could do about the problem. The correct response is that Canada should implement Australian-style restrictions on foreign ownership of real estate. This problem has been solved before, it's not that hard. It would suck for those who bought into the game late, those in the high-end RE business, but the benefits of having a real estate market that has actual price discovery based on the population who could actually live in the properties is definitely worth it, because housing would become more affordable, disposable income would increase, and consumer debt would decrease.