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I doubt it. The impact of foreign investment is overblown. The majority of buyers are domestic.

by msie 7y ago

dmix 7y ago
I remember reading an article about the obsession with Chinese money in Vancouvers housing market was totally overstated since it was in the single percentage points. People just can’t accept there’s a ton of people who want to live downtown than ever before (reverse ‘white flight’) and the housing market is incredibly constrained in supply for a ton of other reasons that can’t be blamed on foreign boogiemen. Not to mention those small percentage of foreign investors are making regular Canadians wealthier than they ever would be normally which goes right back into the economy which creates jobs and industry for other Canadians. The solution then is increasing supply or not expecting to live in a big place whole living in expensive downtown areas, not whining about demand.
- teunispeters 7y ago
  A lot of it turns out to have been money laundering by people trying to either hide income for tax reasons (eg : US 1%) or less legitimate sources - all operating through countries which are good at hiding ownership histories (Eg : China) It doesn't mean the money's coming from China - it could be coming from the USA or other countries with high incentive for tax evasion. Or it could be coming from money laundering from large scale organized crime. (RCMP did a fairly thorough trace and report on this not too long back) Speaking as someone who moved away from Vancouver BC as it became unaffordable. And my income is higher than most Canadians. The "Dirty Money" series breaks this down further, but a not bad link to stories is : https://www.cbc.ca/news/canada/british-columbia/laundered-money-bc-real-estate-1.5128769 https://www.cbc.ca/news/canada/british-columbia/laundered-mo...
- hn_throwaway_99 7y ago
  > I remember reading an article about the obsession with Chinese money in Vancouvers housing market was totally overstated since it was in the single percentage points. Valuations are set at the margins, so single digits percentage of ownership could easily translate into a huge change in prices if the Chinese have different criteria for buying a house (which they obviously do since the goals - asset protection vs. a place to live - are different). Vancouver housing prices are falling, largely due to the tax on empty homes and a large retreat in foreign buyers. Whether it was the Chinese or domestic buyers, people buying Vancouver real estate to park assets (as opposed to live in) had a large impact on prices.
- Tiktaalik 7y ago
  No if you narrowed the regions you were looking at, the amount of non-resident buying of housing in Vancouver was indeed quite high. For example if you're looking at new condos in Richmond, that was 23% being purchased by non-residents. https://www.cbc.ca/news/canada/british-columbia/vancouver-non-residents-statistics-canada-figures-1.4456657 https://www.cbc.ca/news/canada/british-columbia/vancouver-no... Additionally the government only started collecting data around foreign ownership well after the steepest part of the bubble curve was over so who knows what the actual sales numbers were when the prices just started rising.

I doubt it. The impact of foreign investment is overblown. The majority of buyers are domestic.

by msie 7y ago

I doubt it. The impact of foreign investment is overblown. The majority of buyers are domestic.

dmix 7y ago

I remember reading an article about the obsession with Chinese money in Vancouvers housing market was totally overstated since it was in the single percentage points. People just can’t accept there’s a ton of people who want to live downtown than ever before (reverse ‘white flight’) and the housing market is incredibly constrained in supply for a ton of other reasons that can’t be blamed on foreign boogiemen. Not to mention those small percentage of foreign investors are making regular Canadians wealthier than they ever would be normally which goes right back into the economy which creates jobs and industry for other Canadians. The solution then is increasing supply or not expecting to live in a big place whole living in expensive downtown areas, not whining about demand.

teunispeters 7y ago
A lot of it turns out to have been money laundering by people trying to either hide income for tax reasons (eg : US 1%) or less legitimate sources - all operating through countries which are good at hiding ownership histories (Eg : China) It doesn't mean the money's coming from China - it could be coming from the USA or other countries with high incentive for tax evasion. Or it could be coming from money laundering from large scale organized crime. (RCMP did a fairly thorough trace and report on this not too long back) Speaking as someone who moved away from Vancouver BC as it became unaffordable. And my income is higher than most Canadians. The "Dirty Money" series breaks this down further, but a not bad link to stories is : https://www.cbc.ca/news/canada/british-columbia/laundered-money-bc-real-estate-1.5128769 https://www.cbc.ca/news/canada/british-columbia/laundered-mo...
hn_throwaway_99 7y ago
> I remember reading an article about the obsession with Chinese money in Vancouvers housing market was totally overstated since it was in the single percentage points. Valuations are set at the margins, so single digits percentage of ownership could easily translate into a huge change in prices if the Chinese have different criteria for buying a house (which they obviously do since the goals - asset protection vs. a place to live - are different). Vancouver housing prices are falling, largely due to the tax on empty homes and a large retreat in foreign buyers. Whether it was the Chinese or domestic buyers, people buying Vancouver real estate to park assets (as opposed to live in) had a large impact on prices.
Tiktaalik 7y ago
No if you narrowed the regions you were looking at, the amount of non-resident buying of housing in Vancouver was indeed quite high. For example if you're looking at new condos in Richmond, that was 23% being purchased by non-residents. https://www.cbc.ca/news/canada/british-columbia/vancouver-non-residents-statistics-canada-figures-1.4456657 https://www.cbc.ca/news/canada/british-columbia/vancouver-no... Additionally the government only started collecting data around foreign ownership well after the steepest part of the bubble curve was over so who knows what the actual sales numbers were when the prices just started rising.