Vancouver BC Canada housing third highest in world

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Vancouver BC Canada housing third highest in world

Lorin K.
Tacoma, WA · Member since 2015 · 141 posts · 29 votes

The investing by over seas Chinese is unrelenting and has been happening for a long time. Here is the latest example of a neighborhood of local residence protesting in front of a 6 thousand square feet hour house that just had $350,000 in renovations three years ago and will be town down for a larger home to be built. What often happen is the homes are purchased by Chinese investors and are either left empty, or a son is living in it going to collage. A shack of a home in Vancouver west home can go for 2.4 million dollars. 

http://www.huffingtonpost.ca/2016/01/29/point-grey...

http://www.vancouversun.com/news/protesters+rally+...

While I do believe that investing is a good thing, Chinese who buy homes and leave them empty  can destroy a business section in the area. This unrelenting buying by Chinese property buyers is also causing school enrollment to plummet as more homes are purchased only for adult students that live in these homes. Taxes are also lost do to non occupancy or non paying resident immigrants who live here on a temporary visa. 

What I am trying to figure out is where are these rich Chinese investor obtaining there funding from? The province or federal government has speculated it is from Money Laundering and then the investors dump the money in the market and let the properties sit for long periods of time. 

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  • Peter Crisp
    Engineer · Surrey, BC · Member since 2015 · 50 posts · 22 votes
    10y

    Hi Lorin K.

    I can give you a part-answer, since my wife is was born and raised in Shanghai and I've been over to China a few times so I've seen the changes there personally. Part of the money you see is from real estate sales in China. Real estate prices have skyrocketed there and, just like Hong Kong real estate from the 1980s, some people are cashing out. Some money is from stock market investment (speculation is perhaps a better term). A lot is from starting and running successful businesses. Even at the best of times, business in China is murky. Capital outflows from China are massive, and I'm sure that a percentage is pure money laundering. But I can't knock capitalism and people's success either. A lot of hard work has taken a country from starvation in the 1960s to being a middle-country and we should celebrate this achievement.

    Is all this money bad locally? I'm not sure. The owner of the $2.4 million house won't complain, and it's a boom for construction, real estate agents, car dealerships, restaurants and others. But it is causing a lot of changes as you indicate. The half-empty stratas and empty houses aren't good for a vibrant community. I'm not so sure about schools emptying because of immigration though - a lot of this is demographics as our population ages in general.

    The problem I have is that the 'cures' I hear about - taxes on empty suites, etc. etc. seem to trample property rights even if they could be enforced. As landlords, we have to deal with rent controls etc. so layering on more doesn't sit well with me. I also don't want to see controls on people wishing for a better life for themselves or their kids. If the cure for affordability is a real estate crash (which I can't see in the cards), we might regret the impact also. But it sure makes real estate investing hard locally!

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  • Samuel Sedore
    Real Estate Agent · Kitchener-Waterloo-Cambridge, Ontario · Member since 2013 · 408 posts · 90 votes
    10y

    I would also point out that most over seas investor and doing so through through pure capital no financing. Canada is so attractive because of the long term housing market, realistically speaking we have never seen a true crash in housing prices. These investor see it as a safe haven, also if you read into the way the industry is designed over there, it's not the picture of stability.

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