6 ms·

Sigh, 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 s

by jhou2 11y ago

Sigh, 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 ago
I 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 ago
  To make it a real quality clickbait, here is my take, "A city where Chinese buyers fails to conquer, and here is why"
- jacalata 11y ago
  When 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 ago
    Yeah. 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"?
- skylan_q 11y ago
  -9 out of 77 Chinese were asked if they have Vancouver property -BS extrapolation leads to 33% figure I believe it Ladies and gentlemen, just remember that economic bubbles aren't only bubbles in assets, finance, and the structure of the economy, but also the psychology of the people. The number is actually closer to 1-2%.
  - tostitos1979 11y ago
    You are underestimating. In Markham, ON, we recent found out that our offers on these million dollar homes (stretching us near the limits of good financial sense) were getting discarded because we had a condition of 5 days needed to confirm mortgage (the so called financing condition). People are apparently buying homes with "clean" offers. I call BS on this. The average buyer doesn't have a million dollars lying around their checking account. If I was an "upgrade" buyer (improving my existing home), I'd need time to sell my existing home. Btw ... I am the child of immigrants so have no problems if these homes are being bought up by Chinese Canadians. I do have a very big problem if these homes are being bought by illicit funds or funds that have not been taxed correctly. I pay my share (and it is a big share .. every professional couple in Canada is essentially in the 1% and paying for it despite all the student loans we incurred). We have all these financial controls that apply to us about reporting foreign income and paying taxes, etc. This needs to be applied fairly and across the board. One other datapoint: the listing agents in the area have websites in Chinese and with prices in Yuan. Any delusion I had that the money is coming from incomes earned in Canada is firmly gone. People have talked about ideas such as taxing second homes and requiring residency or citizenship to buy a home. Both seem good ideas that will never be implemented. How about mortgage income tax relief for Canadians (like the US or even more aggressive than that)? Allow full borrowing against RRSPs and prevent buyers from discriminating against offers based on financing conditions. The freaking MLS data is regulated anyways so might as well.
    - jpollock 11y ago
      They aren't holding cash. What they are doing is accepting the risk of not being able to finance the property. They're risking the 1% earnest money, but feel it's low risk because they have a good relationship with a bank or know they have good credit. As for people selling and moving into a new house? Again, they're accepting the risk that they will be able to get bridge financing and sell their existing house. Conditions have monetary value to both the purchaser and the seller. If you are losing out to people with clean offers, bump your offer by 5% and you'll find that sellers will wait another 2-4 weeks for their money. That's what I had to do to get a house in San Jose (just moved in!). It's the same as the "discount for debit cards and cash" you can get in electronics stores. Get a good real-estate agent that _knows_ the area, and listen to what they say the house will sell for. Ours was spot-on 100% of the time. Next, you need to realize at what points in the sale the power in the relationship changes. Up to offer acceptance? The seller has the power, so offer more money to keep contingencies on the sale. After acceptance power starts to shift to the buyer. Here in California building reports are attached to the house, so a bad foundation is information everyone gets. This means the seller is likely to negotiate the price down or fix things if a bad report comes in. Of course, you have to spend $$ to find that out, and your mortgage application fees are then throw-away, so... Finally, be honest about what you can afford. If you're not at the tippy-top of your price range, you will be able to stretch just a little bit to get that really sweet house you want.
- deleted 11y ago
  [deleted]
est 11y ago
meta question: are there any meta-journalism news site offering analysis like yours?
- stuartmalcolm 11y ago
  Channel 4 (uk) Fact Check site? http://blogs.channel4.com/factcheck/ http://blogs.channel4.com/factcheck/ ..but I'm not sure who checks the fact check site!
- aembleton 11y ago
  The NHS runs a good one for health scare stories [1]. If there is some health story, wait a day or two and they are likely to have explored the facts. 1. http://www.nhs.uk/news/Pages/NewsIndex.aspx http://www.nhs.uk/news/Pages/NewsIndex.aspx
goodcanadian 11y ago
Well, everyone has been blaming the prices on rich Chinese buying up everything, but this is the first actual evidence that I've seen no matter how flimsy it is. EDIT: I should have been clearer that I never doubted that Chinese money was coming in, but I've previously seen nothing to convince me that it was significant or indicate how significant it was. Even if this estimate is of by a factor of two, it is still fairly significant.
johan_larson 11y ago
It's good to hear that Stats Canada is going to put some solid numbers to all the speculation.
tryitnow 11y ago
Hmmm. Sorry, I don't think I agree with you. Sure, from a frequentist perspective this analysis is "unpublishable," but from a Bayesian perspective is yields some important insights. First of all, the main point of the study is not to obtain am accurate point estimate of Chinese buyers in Vancouver. The main point is to underline the importance of more studies. In other words your criticism kind of makes the analyst's point for him. Second, you would be surprised at the amount of information even small sample sizes can provide when there is great uncertainty about the true data distribution. Third, this analysis is in agreement with two other In other words, don't get hung up on the exact %. Nobody really cares about the difference between 33% and 35%. What decision makers need to know is whether it's a lot or a little. This "quick and dirty" analysis supports the contention that it's a "lot", not a "little". Furthermore, this study was not done in isolation. The NAR study and the urban planner's study both point in the same direction. Taking all this evidence under consideration suggests that overseas buyers are likely a driving force in the run up in house prices in Vancouver. And that's newsworthy.
- aab0 11y ago
  > Second, you would be surprised at the amount of information even small sample sizes can provide when there is great uncertainty about the true data distribution. This isn't about sampling error, this is about inverting conditionals while ignoring base rates. This is like saying 'one third of surveyed Somalis in America report living in Minnesota, therefore, one-third of Minnesota is Somalian'. That conclusion doesn't follow, whether you surveyed 10 Somalis or 1000. That is, there is no reason to expect P(Vancouver purchase|Chinese) = P(Chinese|Vancouver purchase) = 0.33. If that number happens to be right, it is by coincidence; it only works if you are lucky enough that the relative sizes of Chinese buyers and Vancouver sales are just right. (Specifically, that the size of the Chinese buyer population is identical to the size of Vancouver sales; if there are a million Chinese buyers worldwide and a million Vancouver sales over that same period, and a third of Chinese buyers say they bought in Vancouver, then yes, a third of Vancouver sales will be to Chinese.) If you knew two of the three variables of global Chinese size/Vancouver sales size/P(Vancouver purchase|Chinese), even if you just had a vague but defensible prior, you could (weakly) estimate the third. But in isolation, each variable means nothing.

by jhou2 11y ago

cherioo 11y ago

I 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 ago
To make it a real quality clickbait, here is my take, "A city where Chinese buyers fails to conquer, and here is why"
jacalata 11y ago
When 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 ago
  Yeah. 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"?
skylan_q 11y ago
-9 out of 77 Chinese were asked if they have Vancouver property -BS extrapolation leads to 33% figure I believe it Ladies and gentlemen, just remember that economic bubbles aren't only bubbles in assets, finance, and the structure of the economy, but also the psychology of the people. The number is actually closer to 1-2%.
- tostitos1979 11y ago
  You are underestimating. In Markham, ON, we recent found out that our offers on these million dollar homes (stretching us near the limits of good financial sense) were getting discarded because we had a condition of 5 days needed to confirm mortgage (the so called financing condition). People are apparently buying homes with "clean" offers. I call BS on this. The average buyer doesn't have a million dollars lying around their checking account. If I was an "upgrade" buyer (improving my existing home), I'd need time to sell my existing home. Btw ... I am the child of immigrants so have no problems if these homes are being bought up by Chinese Canadians. I do have a very big problem if these homes are being bought by illicit funds or funds that have not been taxed correctly. I pay my share (and it is a big share .. every professional couple in Canada is essentially in the 1% and paying for it despite all the student loans we incurred). We have all these financial controls that apply to us about reporting foreign income and paying taxes, etc. This needs to be applied fairly and across the board. One other datapoint: the listing agents in the area have websites in Chinese and with prices in Yuan. Any delusion I had that the money is coming from incomes earned in Canada is firmly gone. People have talked about ideas such as taxing second homes and requiring residency or citizenship to buy a home. Both seem good ideas that will never be implemented. How about mortgage income tax relief for Canadians (like the US or even more aggressive than that)? Allow full borrowing against RRSPs and prevent buyers from discriminating against offers based on financing conditions. The freaking MLS data is regulated anyways so might as well.
  - jpollock 11y ago
    They aren't holding cash. What they are doing is accepting the risk of not being able to finance the property. They're risking the 1% earnest money, but feel it's low risk because they have a good relationship with a bank or know they have good credit. As for people selling and moving into a new house? Again, they're accepting the risk that they will be able to get bridge financing and sell their existing house. Conditions have monetary value to both the purchaser and the seller. If you are losing out to people with clean offers, bump your offer by 5% and you'll find that sellers will wait another 2-4 weeks for their money. That's what I had to do to get a house in San Jose (just moved in!). It's the same as the "discount for debit cards and cash" you can get in electronics stores. Get a good real-estate agent that _knows_ the area, and listen to what they say the house will sell for. Ours was spot-on 100% of the time. Next, you need to realize at what points in the sale the power in the relationship changes. Up to offer acceptance? The seller has the power, so offer more money to keep contingencies on the sale. After acceptance power starts to shift to the buyer. Here in California building reports are attached to the house, so a bad foundation is information everyone gets. This means the seller is likely to negotiate the price down or fix things if a bad report comes in. Of course, you have to spend $$ to find that out, and your mortgage application fees are then throw-away, so... Finally, be honest about what you can afford. If you're not at the tippy-top of your price range, you will be able to stretch just a little bit to get that really sweet house you want.
deleted 11y ago
[deleted]

est 11y ago

meta question: are there any meta-journalism news site offering analysis like yours?

stuartmalcolm 11y ago
Channel 4 (uk) Fact Check site? http://blogs.channel4.com/factcheck/ http://blogs.channel4.com/factcheck/ ..but I'm not sure who checks the fact check site!
aembleton 11y ago
The NHS runs a good one for health scare stories [1]. If there is some health story, wait a day or two and they are likely to have explored the facts. 1. http://www.nhs.uk/news/Pages/NewsIndex.aspx http://www.nhs.uk/news/Pages/NewsIndex.aspx

goodcanadian 11y ago

Well, everyone has been blaming the prices on rich Chinese buying up everything, but this is the first actual evidence that I've seen no matter how flimsy it is. EDIT: I should have been clearer that I never doubted that Chinese money was coming in, but I've previously seen nothing to convince me that it was significant or indicate how significant it was. Even if this estimate is of by a factor of two, it is still fairly significant.

johan_larson 11y ago

It's good to hear that Stats Canada is going to put some solid numbers to all the speculation.

tryitnow 11y ago

Hmmm. Sorry, I don't think I agree with you. Sure, from a frequentist perspective this analysis is "unpublishable," but from a Bayesian perspective is yields some important insights. First of all, the main point of the study is not to obtain am accurate point estimate of Chinese buyers in Vancouver. The main point is to underline the importance of more studies. In other words your criticism kind of makes the analyst's point for him. Second, you would be surprised at the amount of information even small sample sizes can provide when there is great uncertainty about the true data distribution. Third, this analysis is in agreement with two other In other words, don't get hung up on the exact %. Nobody really cares about the difference between 33% and 35%. What decision makers need to know is whether it's a lot or a little. This "quick and dirty" analysis supports the contention that it's a "lot", not a "little". Furthermore, this study was not done in isolation. The NAR study and the urban planner's study both point in the same direction. Taking all this evidence under consideration suggests that overseas buyers are likely a driving force in the run up in house prices in Vancouver. And that's newsworthy.

aab0 11y ago
> Second, you would be surprised at the amount of information even small sample sizes can provide when there is great uncertainty about the true data distribution. This isn't about sampling error, this is about inverting conditionals while ignoring base rates. This is like saying 'one third of surveyed Somalis in America report living in Minnesota, therefore, one-third of Minnesota is Somalian'. That conclusion doesn't follow, whether you surveyed 10 Somalis or 1000. That is, there is no reason to expect P(Vancouver purchase|Chinese) = P(Chinese|Vancouver purchase) = 0.33. If that number happens to be right, it is by coincidence; it only works if you are lucky enough that the relative sizes of Chinese buyers and Vancouver sales are just right. (Specifically, that the size of the Chinese buyer population is identical to the size of Vancouver sales; if there are a million Chinese buyers worldwide and a million Vancouver sales over that same period, and a third of Chinese buyers say they bought in Vancouver, then yes, a third of Vancouver sales will be to Chinese.) If you knew two of the three variables of global Chinese size/Vancouver sales size/P(Vancouver purchase|Chinese), even if you just had a vague but defensible prior, you could (weakly) estimate the third. But in isolation, each variable means nothing.