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As a vancouverite, and a person that's lived in Toronto for over a decade, I can say that while vancouver has about half the population (of T.O.) it has maybe 1

As a vancouverite, and a person that's lived in Toronto for over a decade, I can say that while vancouver has about half the population (of T.O.) it has maybe 1/4 or 1/8 of the tech jobs. Also Canada is not like, say, the US, where there are many different industrial centers (ie Entertainment in LA or Finance in NY). In Canada, most corp headquarters are in Toronto and a small fraction are in Calgary and that's it. Vancouver has little significant industry that isn't tied to real estate. Even if a crash does happen, the largest crashes to date have only been maybe 30% in '82 (prices recovered in 7 years) and 15% in '08 (prices recovered in 1 year). What could change the course of the current deluge of chinese capital? 1 Canadian Regulatory change - the federal liberals and the provincial liberals have significant political contributions from real estate agents (look it up). They won't impl any meaningful changes. This new 15% tax will affect few and change little; it is just election season and our Premier, Christi has to look active. 2 Interest rates - The US basically sets our rates and the US is likely going to reduce the rates driving more capital to look for better returns. 3 Chinese cash - are you going to stop buying chinese shit? No, in fact most can only afford chinese made products these days. 4 Chinese Regulatory change - This could happen but most of the cash used to buy homes in BC is likely illegally moved out of china anyhow so... TL;DR- In the 1-2 year timeframe tho, my advice - mortgage your house and buy as much BC real estate as you can afford. Good luck on finding 25%+ yoy low risk returns anywhere else.

havetocharge 10y ago
Your mind frame displayed in your tl;dr is precisely what is responsible for the rate of housing price increases in your region.
- RandyRanderson 10y ago
  My guess would be that the van housing prices mostly correlated to the outflow of cash from china. These investors likely don't care about the return - just that they don't lose the capital. So, I respectfully disagree.
allengeorge 10y ago
The city of Vancouver's population is 600K, while Toronto's is 2.6M - over 4x as large. Are you talking about their CMA populations? (That seems more likely: ~2.6M vs. 5.6M)
- RandyRanderson 10y ago
  Thanks. Yes, for brevity's sake. I hope most will infer this.
justinhj 10y ago
A couple of issues here. Firstly US does not dictate Canadian rates, sadly. The fed raised interest rates recently and likely will raise then further if the conditions are right. In Canada many people, especially young people, have dangerously high mortgages for their income. They bought into property because of fear of missing out, often aided and encouraged by their parents who made out like bandits and assume the market can only go up. Secondly Chinese cash coming to Vancouver is almost by definition illegal because of the $50k cash limit Chinese can take out of the country.
- jperras 10y ago
  > Firstly US does not dictate Canadian rates, sadly. Of course not, but 5 year-fixed rate mortgages are set according to the bond market, not BoC overnight rates. If interest rates set by the US Fed are high, then lenders are going to securitize Canadian mortgages with US bonds, due to the higher yields found there.
  - RandyRanderson 10y ago
    Agreed. While the US and CA rates sometimes differ, it's not by much and they usually loosely track each other. This is the effect when you have 2 economies that are so closely tied.
- RandyRanderson 10y ago
  If you look at the US and CA rates you;ll see they track each other quite closely and it's not like canada is driving the US rates. I agree most BC residents have dngerously high mortgage payment to income ratios. That's something that the gov should have stopped by slowing foreign ownership but they didn't and now can't. Now that the gov can't change things for fear of triggering a huge crash, one is inevitable. So now we're in a situation where the bubble will get massive and then explode. My point is, just try and enjoy it! Re chinese cash: If I've learnt anything from the big banks or uber it's that if you do something illegal on large scale it's not illegal. ;>
deleted 10y ago
[deleted]
planteen 10y ago
> TL;DR- In the 1-2 year timeframe tho, my advice - mortgage your house and buy as much BC real estate as you can afford. Good luck on finding 25%+ yoy low risk returns anywhere else. Return is a function of risk. Doesn't a 25% yield imply far more risk than you are implying? Why is anyone selling right now if prices are going to skyrocket like that? What if China institutes tight capital controls? What if oil goes to $20 a barrel?
- RandyRanderson 10y ago
  What i as trying to do was break down that risk into the major constituents (as i see them), Chinese regulatory change being one of them. As I pointed out, likely a large fraction of the chinese cash is already illegal. I don't know chinese politics well enough to know the likelihood or impact of a change. However just from general corrupt country historical knowledge I would guess there are a lot of payoffs to get the money out and who wants to stop that? Oil price is an interesting point. Of course the question becomes what would the price of oil do to foreign investment? Not much i'd guess. If oil goes down the CAD will become cheaper increasing investment. Up and investment may slow but, again, if you're a chinese millionaire looking to get your cash to a safe haven do you actually care how big the house is you are buying? You are just moving the say 2mil out of china. You just care that it keeps the original value.

havetocharge 10y ago

Your mind frame displayed in your tl;dr is precisely what is responsible for the rate of housing price increases in your region.

RandyRanderson 10y ago
My guess would be that the van housing prices mostly correlated to the outflow of cash from china. These investors likely don't care about the return - just that they don't lose the capital. So, I respectfully disagree.

allengeorge 10y ago

The city of Vancouver's population is 600K, while Toronto's is 2.6M - over 4x as large. Are you talking about their CMA populations? (That seems more likely: ~2.6M vs. 5.6M)

RandyRanderson 10y ago
Thanks. Yes, for brevity's sake. I hope most will infer this.

justinhj 10y ago

A couple of issues here. Firstly US does not dictate Canadian rates, sadly. The fed raised interest rates recently and likely will raise then further if the conditions are right. In Canada many people, especially young people, have dangerously high mortgages for their income. They bought into property because of fear of missing out, often aided and encouraged by their parents who made out like bandits and assume the market can only go up. Secondly Chinese cash coming to Vancouver is almost by definition illegal because of the $50k cash limit Chinese can take out of the country.

jperras 10y ago
> Firstly US does not dictate Canadian rates, sadly. Of course not, but 5 year-fixed rate mortgages are set according to the bond market, not BoC overnight rates. If interest rates set by the US Fed are high, then lenders are going to securitize Canadian mortgages with US bonds, due to the higher yields found there.
- RandyRanderson 10y ago
  Agreed. While the US and CA rates sometimes differ, it's not by much and they usually loosely track each other. This is the effect when you have 2 economies that are so closely tied.
RandyRanderson 10y ago
If you look at the US and CA rates you;ll see they track each other quite closely and it's not like canada is driving the US rates. I agree most BC residents have dngerously high mortgage payment to income ratios. That's something that the gov should have stopped by slowing foreign ownership but they didn't and now can't. Now that the gov can't change things for fear of triggering a huge crash, one is inevitable. So now we're in a situation where the bubble will get massive and then explode. My point is, just try and enjoy it! Re chinese cash: If I've learnt anything from the big banks or uber it's that if you do something illegal on large scale it's not illegal. ;>

deleted 10y ago

[deleted]

planteen 10y ago

> TL;DR- In the 1-2 year timeframe tho, my advice - mortgage your house and buy as much BC real estate as you can afford. Good luck on finding 25%+ yoy low risk returns anywhere else. Return is a function of risk. Doesn't a 25% yield imply far more risk than you are implying? Why is anyone selling right now if prices are going to skyrocket like that? What if China institutes tight capital controls? What if oil goes to $20 a barrel?

RandyRanderson 10y ago
What i as trying to do was break down that risk into the major constituents (as i see them), Chinese regulatory change being one of them. As I pointed out, likely a large fraction of the chinese cash is already illegal. I don't know chinese politics well enough to know the likelihood or impact of a change. However just from general corrupt country historical knowledge I would guess there are a lot of payoffs to get the money out and who wants to stop that? Oil price is an interesting point. Of course the question becomes what would the price of oil do to foreign investment? Not much i'd guess. If oil goes down the CAD will become cheaper increasing investment. Up and investment may slow but, again, if you're a chinese millionaire looking to get your cash to a safe haven do you actually care how big the house is you are buying? You are just moving the say 2mil out of china. You just care that it keeps the original value.