4 ms·

Billionaires buying houses does not increase housing costs. You do not need to purchase a Single Family House in Vancouver to have housing. You can buy a condo,

by aminok 10y ago

Billionaires buying houses does not increase housing costs. You do not need to purchase a Single Family House in Vancouver to have housing. You can buy a condo, the prices of which are totally uncoupled from SFHs, or rent. If foreign investors were leaving the houses they buy empty, and thus removing units from the housing stock, you might be able to make a case for foreign investment negatively impacting Vancouver housing costs, but that's not what's happening. The percentage of homes in the Vancouver West Side, where foreign investors are exceptionally active, (edit to add: 'that are unoccupied') is only 3 percent, which is below the typical rate for major cities. What this means is that foreigners are not leaving houses that they buy in Vancouver empty. They are being rented out. The rental cost in Vancouver are below Seattle's when you compare it to the median wage so then couver housing as far as rentals is actually more affordable than neighbouring Seattle.

seanmcdirmid 10y ago
Are they renting them out? I've heard speculators buying housing and then just sitting on them are turning some Vancouver neighborhoods into host towns. Is there anywhere we can get occupancy numbers? Also, aren't Vancouver rents higher than Seattle?
- aminok 10y ago
  The city of Vancouver did a very rigorous study, and found unoccupancy in the West Side, where much of the foreign investment has been going, at only 3 percent: http://vancouver.ca/news-calendar/city-releases-comprehensive-study-on-empty-homes.aspx http://vancouver.ca/news-calendar/city-releases-comprehensiv... Which is below the average for other major cities.
  - seanmcdirmid 10y ago
    Eh. But aren't they biased? They were going through a lot of effort to show that there wasn't a bubble, or that the market wasn't being targeted by the Chinese.
    - aminok 10y ago
      I put the possibility of them massaging the data in some way at very remote. This study had a lot of eyeballs on it so risk of getting caught would be too high for them to entertain. Moreoever, the CoV grunts who do the actual work, like doing studies, seem both competent and of high integrity, and I don't think they'd be willing to betray their duty to the public and try to create a false impression of the unoccupancy rate.
      - seanmcdirmid 10y ago
        They've been willfully ignorant to the numbers for some time. What is to say they aren't misinterpreting the data, fudging it, or ingoring factors like "more houses" or "more energy usage" while the number of people are dropping? This kind of thing goes on all the time here in Beijing, the only reliable way to determine vacancy is to count the lights that come on at night. All the other metrics, including energy consumption, are so gamed that they are useless.
        aminok 10y ago
        They explain their methodology: http://council.vancouver.ca/20160308/documents/rr1presentation.pdf http://council.vancouver.ca/20160308/documents/rr1presentati... Does not look easily gameable, and the authors don't strike me as being disingenuous.
        caffodian 10y ago
        This piece is good also, to explain some of the limitations of the study: http://www.theglobeandmail.com/real-estate/vancouver/poking-holes-in-vancouvers-housing-vacancy-study/article29181730/ http://www.theglobeandmail.com/real-estate/vancouver/poking-...
      - allengeorge 10y ago
        So...I looked at their methodology, and I noticed one thing right off the bat: They define a home as "unoccupied for the year" if its electricity usage is low during the non-heating months - aka. summer. This strikes me as flawed: summer is when you're most likely to be in Vancouver!
kohanz 10y ago
> You can buy a condo, the prices of which are totally uncoupled from SFHs If domestic buyers can't afford SFH's and shift their attention to condos, this increases demand for condos, thus raising the price. It is practically impossible for the two to be "totally uncoupled".
- aianus 10y ago
  > this increases demand for condos, thus raising the price Condos are not supply-constrained. You can tear down like 6 detached houses and build 240 condos in that space. In Toronto they're making over 100,000 new units a year: http://business.financialpost.com/personal-finance/mortgages-real-estate/canadas-condo-boom-spikes-to-heights-not-seen-since-1971-and-thats-making-economists-nervous http://business.financialpost.com/personal-finance/mortgages...
  - kohanz 10y ago
    Toronto and Vancouver is an apples and oranges comparison when it comes to having space/land to build new structures.
    - aianus 10y ago
      Why's that? They're still building them in the downtown core, which is already way more developed than Vancouver's. There's probably some stupid NIMBY 'I need to keep my mountain views' stuff going on if they can't do the same in Vancouver.

by aminok 10y ago

seanmcdirmid 10y ago

Are they renting them out? I've heard speculators buying housing and then just sitting on them are turning some Vancouver neighborhoods into host towns. Is there anywhere we can get occupancy numbers? Also, aren't Vancouver rents higher than Seattle?

aminok 10y ago
The city of Vancouver did a very rigorous study, and found unoccupancy in the West Side, where much of the foreign investment has been going, at only 3 percent: http://vancouver.ca/news-calendar/city-releases-comprehensive-study-on-empty-homes.aspx http://vancouver.ca/news-calendar/city-releases-comprehensiv... Which is below the average for other major cities.
- seanmcdirmid 10y ago
  Eh. But aren't they biased? They were going through a lot of effort to show that there wasn't a bubble, or that the market wasn't being targeted by the Chinese.
  - aminok 10y ago
    I put the possibility of them massaging the data in some way at very remote. This study had a lot of eyeballs on it so risk of getting caught would be too high for them to entertain. Moreoever, the CoV grunts who do the actual work, like doing studies, seem both competent and of high integrity, and I don't think they'd be willing to betray their duty to the public and try to create a false impression of the unoccupancy rate.
    - seanmcdirmid 10y ago
      They've been willfully ignorant to the numbers for some time. What is to say they aren't misinterpreting the data, fudging it, or ingoring factors like "more houses" or "more energy usage" while the number of people are dropping? This kind of thing goes on all the time here in Beijing, the only reliable way to determine vacancy is to count the lights that come on at night. All the other metrics, including energy consumption, are so gamed that they are useless.
      - aminok 10y ago
        They explain their methodology: http://council.vancouver.ca/20160308/documents/rr1presentation.pdf http://council.vancouver.ca/20160308/documents/rr1presentati... Does not look easily gameable, and the authors don't strike me as being disingenuous.
        caffodian 10y ago
        This piece is good also, to explain some of the limitations of the study: http://www.theglobeandmail.com/real-estate/vancouver/poking-holes-in-vancouvers-housing-vacancy-study/article29181730/ http://www.theglobeandmail.com/real-estate/vancouver/poking-...
    - allengeorge 10y ago
      So...I looked at their methodology, and I noticed one thing right off the bat: They define a home as "unoccupied for the year" if its electricity usage is low during the non-heating months - aka. summer. This strikes me as flawed: summer is when you're most likely to be in Vancouver!

kohanz 10y ago

> You can buy a condo, the prices of which are totally uncoupled from SFHs If domestic buyers can't afford SFH's and shift their attention to condos, this increases demand for condos, thus raising the price. It is practically impossible for the two to be "totally uncoupled".

aianus 10y ago
> this increases demand for condos, thus raising the price Condos are not supply-constrained. You can tear down like 6 detached houses and build 240 condos in that space. In Toronto they're making over 100,000 new units a year: http://business.financialpost.com/personal-finance/mortgages-real-estate/canadas-condo-boom-spikes-to-heights-not-seen-since-1971-and-thats-making-economists-nervous http://business.financialpost.com/personal-finance/mortgages...
- kohanz 10y ago
  Toronto and Vancouver is an apples and oranges comparison when it comes to having space/land to build new structures.
  - aianus 10y ago
    Why's that? They're still building them in the downtown core, which is already way more developed than Vancouver's. There's probably some stupid NIMBY 'I need to keep my mountain views' stuff going on if they can't do the same in Vancouver.