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Chinese Buy One-Third of Vancouver Homes: National Bank Estimate
- vskarine 11y agoThat's kind of insane. I wonder what the numbers are for San Francisco...
- msoad 11y agoAppearently some real estate agents have targeted ads in Facebook for "Googlers in San Francisco". I clicked on an ad I saw the other day. This is the listing: http://www.zillow.com/homes/for_sale/pmf,pf_pt/house,townhouse_type/15085712_zpid/3-_beds/any_days/37.804393,-122.387395,37.756567,-122.477174_rect/13_zm/ http://www.zillow.com/homes/for_sale/pmf,pf_pt/house,townhou... I could never afford it with my Google income but the real estate people who put up the ad believe a Googler in SF should be able to afford it.
- 9935c101ab17a66 11y ago> Last sold: Aug 2015 for $1,250,000 Current listing price: > FOR SALE $1,899,000 That's absolutely mind-blowing. What a disgusting market.
- BlytheSchuma 11y agoHoly shit! That looks a lot like the house from Disney Pixar's Inside Out.
- eni 11y ago$1,247,988 is the rough valuation. Their suggested EMI is around $6.8K/month. Would it be in reach for people getting $200K/yr? Are there enough Googlers getting that much?
- msoad 11y agoI make $250k/yr but still can't afford that
- vkou 11y agoTwo married senior devs can easily afford that. As for everybody else... Not so much.
- ndesaulniers 11y agoCan't imagine too many of those...
- kelukelugames 11y agoCan Facebook target on the condition that user and spouse both work at Google. Or AGI bracket?
- nshelly 11y agoAlso, it's a perfect example of the difficulty buying into this market. Check out the Tax History. The owner -- possibly not even living there -- is only paying $1245 a year in property tax, or a rate of 0.06%. If you buy and move in you'll be paying 25x that. YEAR PROPERTY TAXES CHANGE TAX ASSESSMENT CHANGE 2015 $1,245 -- $52,629 +2.0% 2014 $1,245 +44.8% $51,599 +0.5% 2013 $860 +14.0% $51,367 +2.0%
- jmspring 11y agoIt really isn't surprising. It started with the wind up to the turn over of Hong Kong and only continued after that. I wanted to move to Vancouver, but lack of tech scene (Dick Hardt doesn't count) played a big role during the late 90s/2000s. I continued to visit for various reasons at lead a week a year until just a few years ago. What started in the late 90s only continued.
- nonex 11y agoSydney would be similar. Median house price is over $1M - and that is for something that needs to be demolished.
- mastazi 11y agoI was going to make the same observation.
- cm3 11y agoAre they practically buying the land then, if the building is EOL?
- jayhuang 11y agoIn recent years Australia has had many of their large farms sold to the Chinese, and often times, expensive homes are bought at high prices to only be taken down and built anew.
- cm3 11y agoThe worst thing is companies buying water sources to build bottling companies. How can politicians allow drinking water to be privatized in some places is beyond any explanation.
- hoodoof 11y agoThe only thing that counts is money...... keep selling. Sell it all. Sell sell sell. Who gives a toss for community or society or cohesion. Sell everything. As long as property sellers can take all that lovely cash and buy more and bigger homes then what else matters? Ordinary middle class people and the young - make em rent! Why the sense of entitlement that people should be able to afford to buy a home, what are you a communist? Whose country do you think this is? In fact put one giant price on the whole of Vancouver and sell it ALL in one big job lot.
- big_al337 11y agoas a Canadian, your post is resonating with me...
- hoodoof 11y agoWe're selling our souls, in a very real way, to the highest bidder. This ain't going to end well.
- throwaway6969 11y agoNo, souls != property. People sell their property and get money for it. Generally they do sell to the highest bidder. There is no collective ownership. You have no stake in other people selling their own property. There is no "we". How does a hot RE market imply things arent going to end well? Fairly big jump. Toronto is the only other hot mkt in the vast country of canada. Calgary and other cities are seeing falling RE prices.
- gearoidoc 11y agoGreat community spirit there, fella.
- meric 11y agoNot a bad idea...When the bubble pops buy it all back. Meanwhile, rent. That's equivalent to shorting the bubble.
- 3pt14159 11y agoI don't believe these numbers. I highly suspect that Canadian permanent residents or Chinese origin are included in these numbers. Ethnically Chinese people make up a large portion of the Vancouver area, and they get help with their down payments from their parents like most Canadians in urban areas.
- bigsteve78 11y agoyou are dead wrong. 3 of 10 people are easily Beijinger Chinese now.
- nickgrosvenor 11y agoThis won't end well...
- Gustomaximus 11y agoI am curious about the downstream effects of house prices becoming increasing multiples of income in so many western countries. E.g. I suspect it will hit entrepreneurship. Younger generations are buying houses later and taking out massive loans when they do. For the boomers you'd often hear how they bought a house soon after college and paid it off by their early thirties. This would put people in a good place to leave their work for a couple of years to start a business. Now people have these huge mortgages where your ability to start a business is hampered by your ability to get a financial buffer to take a year or 2 off. And lets not forget most businesses are created form people mid-career, not the TV typical university dropout. And small community business, how will they exist in the future. If someone wants to set up a local 'physical presence' vet/daycare type business that are typically mixed into residential areas the threshold is now so high ot exist and especially set up a new business. How can a daycare buy a million+ dollar house and expect to make money paying that back on having 30 local kids being looked after. Also what is going to happen with retirement and periods of unemployment. I suspect society will be less stable as either the government has to foot high rent costs (unlikely) or we will see increased population movements during retirement, and now the government has to look after older people that before a family who lived nearby could help out with. And during low employment cycles society can absorb this downturn if people dont have large loans. Historically people cant 'tighten belts' for a year while things improve, harder when your neck deep in debt. So we will again see more movement of people, debt default etc. It will serve to exacerbate recessions etc. Also these higher prices skew the economy. When people are tied up in these ever increasing loan/income ratios there will be less spending on dining, holidays, hobbies etc. It will weaken the economy by concentrating the spend in limited areas. I believe we should look to ensure affordable housing for owner occupiers. Residential investment need to be discouraged (note I'm not saying stopped) as a speculative asset class. I've seen a few suggested methods to achieve this but I feel the simplest is to place a yearly 'asset tax' on non-owner occupied residential property (I would also include farms). Having a % tax would make it easy to adjust to find the right balance given economic cycles change. Also this would encourage property hoarders not in heavy debt to sell for lower taxed asset classes. This I feel is important as most solutions focus on controlling the investment lending side which is limiting in reach.
- 11y ago
- beedogs 11y agoStart restricting offshore "investment" property ownership. This is essentially money laundering at this point.
- markdown 11y agoI live in Fiji. We stopped this last year. Non-citizens can't buy residential properties within town boundaries. Outside of town boundaries, they can buy residential property but must build a home within two years... and there's a minimum $ amount they have to spend building the home. The law was enacted because locals just couldn't compete with the Chinese.
- eps 11y agoYou'll end up with one Chinese guy with a citizenship holding proxy ownership for a hundred that are still in China. Just like it is in Vancouver. That's unless there is a massive tax penalty for owning secondary residencies.
- esja 11y agoSo do both.
- mistermann 11y agoThat's simple enough to detect and outlaw if your government isn't bought and paid for.
- steveax 11y agoMay I ask where in Fiji you live? I traveled there a few decades ago and still have very fond memories. It's been in the back of my mind as a place to wind down after I'm done with the rat race ever since.
- markdown 11y agoI live in Nadi near the international airport. If you last visited a few decades ago, then a lot has changed since then (and probably not in a good way)
- runamok 11y agoCorrect me if I'm wrong but this just seems like the next wave of gentrification. If you make a place nice and safe, people with the most disposable income buy it all up. Everybody feels this way about the next wave. I'm not unsympathetic and am similarly unable (and/or unwilling) to buy a house in this overheated bay area market. Reminds me of an article I recently read: http://www.atlantamagazine.com/homeandgarden/the-gentrifier/ http://www.atlantamagazine.com/homeandgarden/the-gentrifier/
- jbotttt 11y agoWould be genuinely interested in methods for making an area appear less safe
- hyperbovine 11y agoOh easy. Go sleep on the sidewalk. The Justins will be beside themselves.
- runamok 11y ago(Dons evil thinking cap) I was considering starting a service to truck homeless people to a neighborhood where you want to buy property. It would be called Goober (rhymes with Uber)... Nevada beat me to it though: http://www.motherjones.com/mojo/2015/10/nevada-settles-busing-homeless-lawsuit-san-francisco http://www.motherjones.com/mojo/2015/10/nevada-settles-busin...
- kspaans 11y agoYou may have to lobby local councils to make that legal first. In Westminster (a borough in central London), it's illegal to sleep on the street and illegal to "give people free food" on the street.
- mistermann 11y agoThings are getting so ridiculous and government shows absolutely no interest in doing anything about it, if I won the lottery I'd actually consider doing things like this just to be a massive societal troll.
- jhou2 11y agoSigh, smh. The statistical flaws in this "back of the envelope" calculation are something else. This was a study based on "a Financial Times multiple choice survey of 77 high net worth and affluent mainland Chinese individuals, 'admittedly not a statistically significant sample size,'” According to this survey, 9 individuals out of these 77 Chinese bought property in Vancouver. After some more mathematical shenanigans, this is extrapolated to imply that Chinese mainlanders buy 33% of the Vancouver real estate market. Really?!? And this statistically baseless extrapolation becomes newsworthy? http://www.vancouversun.com/business/chinese+investors+third+vancouver+homes+national+bank+estimate/11804486/story.html http://www.vancouversun.com/business/chinese+investors+third...
- cherioo 11y agoI find it believable, since 30% of population in Vancouver is Chinese http://worldpopulationreview.com/world-cities/vancouver-population/ http://worldpopulationreview.com/world-cities/vancouver-popu... This figure is also from 2011 so it's probably higher by now. Seeing this touted feel like reading: Breaking news, a city with 100% Caucasian population does not see a single Chinese buyer!
- eva1984 11y agoTo make it a real quality clickbait, here is my take, "A city where Chinese buyers fails to conquer, and here is why"
- jacalata 11y agoWhen they say "Chinese" these discussions about real estate usually mean Chinese citizens, not ethnically Chinese locals. It doesn't seem to be explicitly said here but I'm pretty sure that's what he means, see the other paragraphs talking about government investigation into offshore buyers.
- mcnamaratw 11y agoYeah. Would it still be click bait if the headline were "30% of the people in Vancouver are ethnically Chinese, and people often live in houses"?
- bigsteve78 11y agoVancouverite here. this estimate is low. In Richmond our southern towhship, Chinese immigrants held an official governmental meeting in mandarin. Beijingers are taking over here! Jobs in the meantime have been rapidly depressing with an average wage of about $50kUSD for tech jobs that pay $150k USD in SV.
- OSButler 11y agoThis funny website lets you see what's available in the $1M range in Vancouver: http://www.crackshackormansion.com http://www.crackshackormansion.com
- yelnatz 11y agoWow I really bombed this quiz.
- mahyarm 11y agoWhats even funnier is how those same crack shacks are now $1.5mm to $2.4mm in price.
- smcl 11y agoOh my word - some of those properties are insane! Even some of the $2m ones are basically just wooden sheds!
- branchless 11y agoIt's the land. I'm not sure why people don't understand this. Without the location context this isn't a useful site. Suitable land is artificially constrained, fiat money issuance is unconstrained, ergo prices are rocketing as rent seeker banks shift resources from wealth producers to themselves.
- frandroid 11y agoThere's a house that caught on fire recently, it will have to be rebuilt. The owners just sold it for $2.4M.
- landryraccoon 11y agoIf this is indeed a problem, then raise property taxes on non-owner occupied homes. From the perspective of the host country, it's free money - the taxes are paid for by foreign residents, and can go towards supporting local citizens and services.
- x5n1 11y agoWe should ban Chinese main landers from buying houses in Vancouver as it's destroying the city in the process. Unless we are okay with the city being basically unaffordable for the local population, and just enriching real estate agents and property investors at the cost of the city.
- landryraccoon 11y agoIs the city unable to build more housing? Why don't higher property taxes on non-owner occupied buildings solve the exact problem you're talking about?
- hoodoof 11y agoBuild more, to will sell to........ the highest bidder! And the highest bidder is not middle class people. And when you raise taxes that are directly levied against overseas buyers, then the government becomes addicted to those taxes and therefore addicted to overseas buyers.
- kspaans 11y agoPossibly you could circumvent that addiction by making the tax an LVT. Make the effect on locals neutral by reducing property taxes and/or PST by about the same amount as the revenues from LVT. Thus the only payers with an increased tax bill are non-resident owners.
- mywittyname 11y agoIssue refunds other owners in the amount of the extra revenue taken in by this tax.
- kzhahou 11y agoA lot of people say this is happening in Silicon Valley too, particularly on the peninsula (I've heard Mtn View, etc). I don't understand the ramifications, though.
- im3w1l 11y agoFor context, the Chinese themselves restricted foreign real estate ownership until recently. The restrictions were relaxed last year.
- adamt 11y agoThere is a similar story appearing in UK in places like London and in my home town of Cambridge. This isn't yet not he same scale, but it is affecting the property market. In Cambridge 1 in 20 new-build properties is purchased by non-resident Chinese buyers, which has been one of the contributing factors that has seen prices rise by 50% since 2010 [1] and are 47% above 2007 pre-GFC peak [2]. Note - unlike Vancouver that has a a big (30%) local Chinese population, only about 1.4% of the Cambridge population is Chinese or of Chinese ethnic origin [3] To some extent this is just about free markets and a movement of capital. But it is starting to price out many local people out of the property market that does have a social impact. There are other factors at play including a booming tech & biotech sectors, restrictive planning, stock-piling of building plots etc, but the foreign buyers issue is a major contributor. [1] http://www.theguardian.com/cities/2016/mar/22/china-cambridge-university-poet-xu-zhimo-farewell-property http://www.theguardian.com/cities/2016/mar/22/china-cambridg... [2] http://www.thisismoney.co.uk/money/mortgageshome/article-3285913/House-price-growth-Britain-s-20-major-cities-peaked-prices-Cambridge-12-year.html http://www.thisismoney.co.uk/money/mortgageshome/article-328... [3] Guardian data - available in a Google doc https://docs.google.com/spreadsheets/d/1yc8W1SiCbWd9V4I9KmTlY_Rk_qullL828Qxbsvth93w/edit?hl=en#gid=0 https://docs.google.com/spreadsheets/d/1yc8W1SiCbWd9V4I9KmTl...
- nextos 11y agoIn Cambridge, it's sadly a pretty artificial bubble. With all land there is in the surroundings, it looks like an artificial limit in the demand.
- pjc50 11y agoThat's prime agricultural land, though. And Cambridge is really not suited transportwise to becoming a big city.
- guard-of-terra 11y ago> That's prime agricultural land Let's grow some cabbage on the most expensive land on the planet? Because forget money - it's cabbage that counts. > And Cambridge is really not suited transportwise to becoming a big city. We have this recurring thing that people only want to move to a very very small subset of cities. There are multiple solutions to be proposed, but just turning blind on this doesn't sound feasible.
- leonroy 11y agoMany causes behind this - saying the Chinese are to blame is glossing over the issue IMO and is very much akin to saying tech workers are behind the property issues in SFO. There are more sides to this... One of major contributors to rising property prices is the gutting of trust in the stock market or any speculative market for that matter, over the past two decades. Super low interest rates haven't helped either with people looking to park their cash left with property as the only safe place which provides a rate of return. With regards to Chinese buyers, there is some truth (again stressing that it's only a part of the picture). For the past 20 years nearly every trading partner with China has incurred a massive balance of payments deficit. That money's coming home to roost (literally). The same thing happened in the 80s when Japan was an exporting powerhouse - they bought real estate and companies across the US and Europe, pushing up the price of real estate. There was actually an excellent piece in the Prospect by Andy Grove (former Intel CEO) which lamented the loss of manufacturing in the US and the effects it would cause: http://prospect.org/article/andy-grove-trade-globalization-and-defending-america’s-economy http://prospect.org/article/andy-grove-trade-globalization-a... Again just a facet to the picture, but you put all these pieces together and you can see the problem a lot more clearly.
- antoniuschan99 11y agoInteresting comment on the parallels with the Japanese a few decades back. The Japanese were like the Chinese at one point too, selling crappy electronics in the 60s and being seen as extremely wealthy in the early 90s.
- chermah 11y agoThe problem is that those Chinese are pushing home prices to the sky, if they continue like this Vancouver will be no more than an empty city used for trading and no more...this is pathetic
- moonshinefe 11y agoYoung professionals trying to create careers/long term lives here are completely priced out of the market. I'll be leaving soon. San Fransisco like property prices, with far, far less compensation. You simply can't own a house unless you're a millionaire, and a small condo will be upwards of $200k for a mortgage when you don't own the property. It's just insane. http://www.payscale.com/research/CA/Location=Vancouver-British-Columbia/Salary http://www.payscale.com/research/CA/Location=Vancouver-Briti... Even if I'm pulling in a quality $80k (high-ish by here standards), I'm nowhere near affording a $2mil property. I'll be lucky to have a small condo with 2 bedrooms. What's the incentive to stay?
- mistermann 11y ago> and a small condo will be upwards of $200k for a mortgage when you don't own the property Ha! https://www.reddit.com/r/vancouver/comments/4bo9wz/were_buying_a_2_bedroom_in_west_end_with_this/ https://www.reddit.com/r/vancouver/comments/4bo9wz/were_buyi... "We have 540k as a down payment and we are going to take a 160k mortgage. Adding strata fees for the place we want its going to be 1200$ a month for the next 30 years, and we end up with a 950sq 2 bedroom in a decent condo off Davie." $1200 / month (this is mortgage + condo fees) for 950 sq ft, and this is after putting down $540k - and it's not even a brand new building. And compared to SFH, condos are actually realatively reasonable priced, by Canadian standards at least. Beyond insane.
- vkou 11y agoTo be fair, Davie is about as downtown as you can get. It's like an apartment overlooking New York's Central Park, except in a provincial backwater, instead of a world-class city. Otherwise, condos within easy reach of downtown are somewhat affordable. Single-family homes in Vancouver are very much a 1% luxury item at this point.
- mistermann 11y agoDavie is a good neighborhood, but far from "an apartment overlooking New York's Central Park". Regardless, the question to me is, does the local economy (wages) justify these prices or is society continuously putting a larger and larger portion of their net worth into real estate, well beyond historical norms? You can look at a very long term chart of real estate vs GDP growth and see something has recently gone askew, do low interest rates completely explain that? And if so, what would happen if interest rates normalized in a relatively short period of time?
- cm3 11y agoI couldn't find anything authoritative on the matter so I hope I can ask this here with Canadians reading. I'm curious if the only reason for the large asian population in Vancouver is solely due to immigration from California around the turn of the 20th century.
- mistermann 11y agoThe older population maybe, but the new immigration is typically a wife and children living here (going to school, enjoying subsidized health care, etc) while the husband stays in mainland China for work (paying no taxes in Canada of course).
- cm3 11y agoWell but the husband works and lives in China, so it's natural to pay taxes there. I suppose wife and kids are supported financially by husband and she doesn't work, so why would they pay taxes?
- kspaans 11y agoThey are paying property taxes and consumption taxes. Though I'm not sure how much money you can receive, as a dependent, from outside of the country before the CRA comes knocking.
- cm3 11y agoOf course they are, but I assume they can easily circumvent income taxes by just using a card backed by the husband in China. Like a prolonged vacation where you rent the holiday home.
- mistermann 11y agoThe question isn't why would they pay taxes, the question is should the host country ask them to contribute monetarily to the community in which they live and from which they benefit? I think the answer to that is yes - a lot of people seem to disagree but seem reluctant to explain why.
- Dowwie 11y agoHere's the actual "study" (see page 3): https://nbf.bluematrix.com/sellside/EmailDocViewer?encrypt=5ef50212-0fd5-41cb-9e7c-94ee145e6208&mime=pdf&co=nbf&id=peter.routledge@nbc.ca&source=mail https://nbf.bluematrix.com/sellside/EmailDocViewer?encrypt=5... Although this "study" was based on back of the envelope estimates, and the 1/3 estimate is probably inaccurate, there is anecdotal evidence of large-pursed foreign investors from around the world -- not just China but Australia, Russia, etc -- who are sustaining, if not increasing the demand for housing in populous areas. This foreign investment is great for people who are trying to sell a home in one of these markets but horrible for buyers, who can't compete with all-cash fast-close-best-price offers. Further, the few realtors who are boots-on-the-ground for these investors have market insights -- they know what's potentially about to go on the market but hasn't yet, get insider information, etc -- and use this information asymmetry to their advantage by offering on homes even before any real home buyers have a chance or offer on the first day of listing! I have personally gone through losing multiple times to these sorts of customers while trying to buy a new home (in the NYC metropolitan area on the NJ side), not an investment property. The experience of buying a home in a high-demand housing market where institutional/major investors are participating really challenges my thinking about whether free market practices should be allowed to operate in housing at all. Considering the rising cost of housing, it is tough to side with capitalism on this subject. I'd like to see a study about the "artificial growth" of housing prices by investors. Interestingly to note is that such a study may conflict with the agenda of at least some leading universities who tend to publish reports about rising cost of housing after receiving generous funding from housing investors. NYU Furman, for instance, has a long-lasting public relationship with Capital One (and god knows who else in private).
- crdb 11y ago> it is tough to side with capitalism on this subject Assuming you mean "with the philosophy of free markets and individual rights" by the catch all "capitalism", it's not. The foreign buyer is benefiting from state-provided services, such as the police providing some degree of safety from robbery and damage, safety from invasion and confiscation by the armed forces, and a sound legal framework and justice system that protects their property right. Citizen pay for this via income taxes and their employer's corporate tax, as well as value-added taxes on products and services purchased (since there is no modern country that generally allocates a certain type of tax income to a certain type of spending). Non-resident owners do not. They get a free ride. Thus, the free market, moral, individual rights protecting solution that might be Barry Goldwater approved is to charge the non-resident owners a yearly tax that covers the cost of services provided.
- aprdm 11y agoI am from London and currently moving to Vancouver. It looks like salary / rent is still much more sane in Vancouver than in London. I would guess London is in a much advanced stage of this problem?
- ido 11y agoin Vancouver, rents are not yet as bad as purchase prices.
- pfarnsworth 11y agoTry comparing salary / mortgage payment. If you want to get a house in a good area like the West End, you can't afford it.
- aprdm 11y agoWell, houses in London have been unaffordable since for ever... I would guess it beats Vancouver easily on this subject as well. But I like the salary / rent more as I am not planning to buy in either cities
- johan_larson 11y agoThe likely responses to this are a) a pied-a-terre tax on unoccupied residential structures, and b) authorizing a LOT more construction, probably by increasing permitted density, which will lead to a lot of single-family structures and townhouses being replaced by condominium towers. There are similar issues in Toronto, but here we are building new towers on every corner, or near enough. Toronto, fortunately, has plenty of room to spread in three directions.
- drzaiusapelord 11y ago>which will lead to a lot of single-family structures and townhouses being replaced by condominium towers. This is what's happening in Chicago right now. Single family homes and two story apartment buildings, which dominated Chicago and made it a pleasant place to live (lowish density, lots of room, decent sized backyards, etc) have been replaced in gentrying areas with super dense condos that are 3 to 6 units large on the same tiny lot. No yard, no parking, no front yard, tiny bedrooms, etc. It really changes the character of the neighborhood and the system really can't handle this kind of density. You would have 3-4 people in a SFH which is now a lot with 6 condos with 18-24 people. This means not only higher pricing but more traffic, no parking, higher load on utilities, local parks being overfilled, etc. No one talks about density it seems, but something very real happens when we quadruple density like this.
- jaredmck 11y agoWhat neighborhoods in Chicago are becoming more dense like this? I don't recall seeing this being too common.
- sandra_saltlake 11y agoDifficult rent vancouver!
- SixSigma 11y agoEveryone was happy with low inflation from low prices from cheap Chinese labour. Now they are crying into their iPhones about how they cannot afford to live in the most desirable cities.
- throwawy32416 11y agoIt's also true in Boston, which like SF has a housing stock constrained by geography. Doing a quick search on Craigslist the prices are also a good deal lower in Vancouver than Boston. I'm looking at you, $3500/mo 1-br rental in Boston with peeling paint leaky windows, and $2500/mo basement studio in the 'burbs. It's not uncommon to see (grotesquely) wealthy foreign (and some old-money domestic) students buy property here, at whatever the cost, further driving up the unattainability for those who actually intend to stay and integrate with the local community. I have a tech salary in the low six figures and I'm considering a commute from Providence because I'm priced out of Boston. I don't want roommates any more in my thirties, and I'd like to actually have a place for my car (long-distance work and personal trips). I'd love to buy in Boston (or Cambridge, Somerville, Brookline, or other places served by mass transit), but I'm simply priced out of the market. In what world can anyone afford to buy the $1-2MM 1-br condos here and the $2-3MM houses? Local financiers, sure, working physicians, and some corporate execs, but they're a minority of the population. Paying rent in Boston, you know you're being exploited, but you don't have a choice. My current place is owned by a Chinese "investor" who uses unlicensed contractors to do unpermitted construction on an illegal third-floor apartment above mine. The construction quality is abysmal (think toilets not attached to the floor and fluorescent lights half-hidden behind drywall), but unless I want to be homeless I have no recourse because all leases turn over on September 1st. My place just has peeling paint and cabinets that fall off the wall, and at least me and my roommates are only paying $5k/mo for it. shrugs
- matthewaveryusa 11y agoI moved from NYC to Cambridge thinking I could get a decent 1 bedroom for 500k. Boy was I wrong.
- throwawy32416 11y agoI'm curious: what did you end up doing? I know more and more people buying in Providence and Nashua and commuting to Boston. The thinking being that if you're going to commute, your money should at least buy a decent property (since the Boston suburbs are also very expensive).
- antoniuschan99 11y agoI found it odd that the rent vs property prices to be drastically different. Rent in Vancouver was really cheap compared to value of the property.
- gmarx 11y agolong term the only use for residential property is for people to live in it. Short term it may be seen as a safe place to park money you are sneaking offshore of a regime you don't trust. Of course people have to live in Vancouver and SF and NYC because that's where all the other top people live...until they don't
- freeone3000 11y agoProperty is the investment. Renting is the hedge - the property owners never plan to live there, they'll make their money from reselling a few years after. Any rental income is simply gravy.
- justinhj 11y agoRent is much more closely tied to median income than purchase prices. I live in Vancouver and people I know who own homes are either older people that got into the market when it was affordable, or younger couples where both have jobs and pay a significant amount of their salary to mortgage interest. Usually they were only able to buy because their parents are sitting on hundreds of thousands of equity in their homes and lend them a deposit. People buying here are doing so because they feel like the prices will just continue rising, so they sacrifice a lot now rather than a lot more later. On the other hand renting feels like dead money so people won't stretch as much.
- msie 11y agoI was hoping that people here were more skeptical (EDIT: and less hysterical) than users in the forums of the local rags... Some are fond of perpetuating the narrative that the city will be hollowed out with empty homes and locals fleeing the city. Yet a recent report to city hall reports that detached homes are not as vacant as "popularly" believed: "The vacancy rate in Vancouver for single-family homes, duplexes and row houses is only about one per cent, and that rate has been static since 2002, according to the report. Meanwhile, the combined vacancy rate for condominiums and purpose-built rental apartments is 7.2 per cent. That number is in line with the findings of a 2013 study by the Urban Futures Institute, which put unoccupied apartments in Vancouver at 6.2 per cent on 2011 Census day." Read more: http://www.vancouversun.com/business/affordability/more+than+vancouver+condos+empty/11770403/story.html#ixzz43pviBP50 http://www.vancouversun.com/business/affordability/more+than...
- caffodian 11y agoThat study also had flaws, here is an article poking at it. Among other issues, excluding pre-demolition homes from the city-sponsored study doesn't make sense. http://www.scmp.com/comment/blogs/article/1926280/vancouvers-vacancy-study-key-finding-it-didnt-find-and-vacant-homes-it http://www.scmp.com/comment/blogs/article/1926280/vancouvers... As someone living here, one big problem is that there is far too much noise - too many studies and bad articles (like the original one here.) There's obviously problems but everyone is running around chasing the hot topic of the day ("shadow flipping," for example) as the various governments either pretend it's not a problem, or sponsor yet another flawed study on it.
- throwaway6969 11y agoHmmm, making up 1/3 of the total dollar amount spent on RE doesn't equal buying 1/3 of the homes. There is some numerical illiteracy here.
- c3t0 11y agoReminded me of the shopping spree of the Chinese Insurer Anbang. Waldorf Astoria in NY was one of their big purchases They were bidding on Starwood Hotels http://www.reuters.com/article/us-starwood-hotels-m-a-anbang-idUSKCN0WK1I7 http://www.reuters.com/article/us-starwood-hotels-m-a-anbang... Fidelity Life is also theirs http://www.bloomberg.com/news/articles/2015-11-09/anbang-to-buy-hrg-s-fidelity-guaranty-for-1-6-billion http://www.bloomberg.com/news/articles/2015-11-09/anbang-to-...
- mrgreenfur 11y agoI have no idea if these stats are true, but I've never understood why any town would allow foreigners to homes and leave them vacant. Is there any reason (other than 'yay capitalism') to not put more restrictions on who can buy and what they can do after it's owned? This wouldn't be a story if the homes were full of new migrants being added to the towns and buying big houses.
- kafkaesq 11y agoScrew these hand-wavy extrapolations. Any estimates not based on actual property record searches is just reading tea leaves, basically.