4 ms·

These houses weren’t purchased to rent out. They were safe deposit boxes for cash. The expectations were that they would just keep going up in value. Their rent

These houses weren’t purchased to rent out. They were safe deposit boxes for cash. The expectations were that they would just keep going up in value. Their rent value didn’t matter.

reaperducer 8y ago
Could be both. The house where I rent is owned by a woman in China who phoned up a local real estate management company, bought the first 20 houses on their list, and wired them the money. It's probably more complicated than that, but that's the short form story the management company told me. The company also said it's very common.
- mistermann 8y ago
  And yet we're told by the MSM that foreign ownership is 5%, makes one wonder if situations like this are even statistically detectable. If this article is remotely true and this is the start of a trend set off by having no rules whatsoever and then suddenly a whole bunch of not terribly well thought out rules, it's going to be interesting to see how this all plays out, especially when good old "fear is stronger than greed" investor psychology kicks in, all in an environment of steadily increasing interest rates.
  - reaperducer 8y ago
    makes one wonder if situations like this are even statistically detectable. I don’t know about Canada, but forming as domestic shell company to make your real estate holdings look local is pretty easy in the United States, and can be done online.
  - corny 8y ago
    It's not just the MSM, it's the CMHC and Stats Canada. https://www.cmhc-schl.gc.ca/en/data-and-research/publications-and-reports/housing-market-insight-canada https://www.cmhc-schl.gc.ca/en/data-and-research/publication... Also, what's not mentioned in that report is the percentage of purchases by foreign-owners last year or the year before. The 4.8% number is total Vancouver residential foreign-ownership - it's just a snapshot.
    - mistermann 8y ago
      > It's not just the MSM, it's the CMHC and Stats Canada. The linked CMHC numbers are surveys of people's perceptions of the impact of foreign money, which is a hilariously useless metric. Stats Canada is pretty careful about the wording they use, I imagine they run everything by the legal department before release to make sure they're not technically lying, they leave that up to the newspapers and TV to accidentally misreport repeatedly, until it becomes common knowledge.
  - captain_perl 8y ago
    > And yet we're told by the MSM that foreign ownership is 5% When non-residents own 5% of a market that typically only has 1-2% listed at any time, prices quadruple like in Vancouver.
    - Finnucane 8y ago
      Yes, precisely, a 'normal' market would have a 5-6% vacancy rate. If your vacancy rate is only 2% and 5% of the inventory is empty but not for sale or rent, that is a huge distortion.

These houses weren’t purchased to rent out. They were safe deposit boxes for cash. The expectations were that they would just keep going up in value. Their rent value didn’t matter.

reaperducer 8y ago

Could be both. The house where I rent is owned by a woman in China who phoned up a local real estate management company, bought the first 20 houses on their list, and wired them the money. It's probably more complicated than that, but that's the short form story the management company told me. The company also said it's very common.

mistermann 8y ago
And yet we're told by the MSM that foreign ownership is 5%, makes one wonder if situations like this are even statistically detectable. If this article is remotely true and this is the start of a trend set off by having no rules whatsoever and then suddenly a whole bunch of not terribly well thought out rules, it's going to be interesting to see how this all plays out, especially when good old "fear is stronger than greed" investor psychology kicks in, all in an environment of steadily increasing interest rates.
- reaperducer 8y ago
  makes one wonder if situations like this are even statistically detectable. I don’t know about Canada, but forming as domestic shell company to make your real estate holdings look local is pretty easy in the United States, and can be done online.
- corny 8y ago
  It's not just the MSM, it's the CMHC and Stats Canada. https://www.cmhc-schl.gc.ca/en/data-and-research/publications-and-reports/housing-market-insight-canada https://www.cmhc-schl.gc.ca/en/data-and-research/publication... Also, what's not mentioned in that report is the percentage of purchases by foreign-owners last year or the year before. The 4.8% number is total Vancouver residential foreign-ownership - it's just a snapshot.
  - mistermann 8y ago
    > It's not just the MSM, it's the CMHC and Stats Canada. The linked CMHC numbers are surveys of people's perceptions of the impact of foreign money, which is a hilariously useless metric. Stats Canada is pretty careful about the wording they use, I imagine they run everything by the legal department before release to make sure they're not technically lying, they leave that up to the newspapers and TV to accidentally misreport repeatedly, until it becomes common knowledge.
- captain_perl 8y ago
  > And yet we're told by the MSM that foreign ownership is 5% When non-residents own 5% of a market that typically only has 1-2% listed at any time, prices quadruple like in Vancouver.
  - Finnucane 8y ago
    Yes, precisely, a 'normal' market would have a 5-6% vacancy rate. If your vacancy rate is only 2% and 5% of the inventory is empty but not for sale or rent, that is a huge distortion.