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I don't have the source, but I've read that the amount of Chinese money in Vancouver's real estate is usually blown out of proportion. The latest number release

I don't have the source, but I've read that the amount of Chinese money in Vancouver's real estate is usually blown out of proportion. The latest number released by the province I've seen suggests that foreign investments in the housing market is close to 15% in Vancouver (still way more than anywhere else in Canada by a wide margin). Not to say that it has no effect, but still a thing to keep in mind. Also, the stock market historical average of annual return is 6-7%, whereas it's lower for real estate. As with anything, diversification is the most important point.

lawnchair_larry 9y ago
From what I've heard and read, the numbers released by the province were debunked and rejected by pretty much everybody. Having visited a few times, I don't see how the number could possibly be so low.
- torAnon 9y ago
  Its because they don't record the all too typical situation of a Canadian Citizen with financing via foreign relatives/friends. Eg. Chinese family has one member whose been granted citizenship. They all come together to pool money, transfer it to the Canadian relative, purchase together, profit(for now). All thats recorded is a Canadian purchased a home, "how" they purchased is not yet a government issue. The government/banks/real estate industry has known about this for years...
b1tr0t 9y ago
There isn't a lot of good data on foreign transactions because regional and federal governments have worked hard to make sure data was not collected on it. Popular pressure is slowly changing that. One observation I have is that even if it's just single digit as a %, it can exert very significant pressure on the market. A bubble is a mob effect. It begins with some properties purchased at prices the local market can't support, regional opportunists jump in seeing the opportunity for flipping, then fear of missing out, especially for first time buyers, results in a stampede as people see the ladder going up and leverage themselves to get the last rung before it goes out of reach. But there was never any real scarcity in the first place. Point being, a small amount of foreign investment can have a leveraged influence on local markets. I do think the "foreign" word there gets too much attention though. The more important question to ask is - should property as an investment be something we economically encourage. How much economic activity does a $5M 3 bedroom house actually generate? I don't pretend to know the answer but I think this focus on the "foreign" bogeyman is blocking us from having more important conversations about the role of real-estate in economic policy.

lawnchair_larry 9y ago

From what I've heard and read, the numbers released by the province were debunked and rejected by pretty much everybody. Having visited a few times, I don't see how the number could possibly be so low.

torAnon 9y ago
Its because they don't record the all too typical situation of a Canadian Citizen with financing via foreign relatives/friends. Eg. Chinese family has one member whose been granted citizenship. They all come together to pool money, transfer it to the Canadian relative, purchase together, profit(for now). All thats recorded is a Canadian purchased a home, "how" they purchased is not yet a government issue. The government/banks/real estate industry has known about this for years...

b1tr0t 9y ago

There isn't a lot of good data on foreign transactions because regional and federal governments have worked hard to make sure data was not collected on it. Popular pressure is slowly changing that. One observation I have is that even if it's just single digit as a %, it can exert very significant pressure on the market. A bubble is a mob effect. It begins with some properties purchased at prices the local market can't support, regional opportunists jump in seeing the opportunity for flipping, then fear of missing out, especially for first time buyers, results in a stampede as people see the ladder going up and leverage themselves to get the last rung before it goes out of reach. But there was never any real scarcity in the first place. Point being, a small amount of foreign investment can have a leveraged influence on local markets. I do think the "foreign" word there gets too much attention though. The more important question to ask is - should property as an investment be something we economically encourage. How much economic activity does a $5M 3 bedroom house actually generate? I don't pretend to know the answer but I think this focus on the "foreign" bogeyman is blocking us from having more important conversations about the role of real-estate in economic policy.