Chinese Investors Driving Up Metro Housing Prices

[Nutterbug]

Originally Posted by Yume-sama

Well, that is slightly problematic. If you want to know what *would* happen if Canada were to see a similar economic collapse, I must say it would be exactly the opposite of what you'd hoped. As has happened every time there is a collapse of a corporation, economy, etc., more foreigners would come in and buy everything up for pennies on the dollar. This is essentially what has happened in many countries (Iceland, Ireland, Spain, Greece, Egypt). Policies from large international groups (say the IMF) create a situation in which there is bound to be a collapse (say, rampant inflation on the price of gas, food, etc. which we *are* seeing), which screws over the local residents, and then foreign powers come in and snap everything up... which screws over the local residents. Foreign banks relished the opportunity to come in to America and buy everything once it was essentially worthless.

So what has happened? Even though house prices are at their lowest, homelessness, etc. has skyrocketed to their highest levels. And home ownership is at its *lowest* levels.

How can that be when everything is so much more affordable?

Basically, the point is you can't damage one sector of the economy without equally damaging every other part of it.

So we should really be hoping for a Chinese collapse, so that we have more buying power compared to them?

Anyways, what you say is interesting. It reminds me of what an old Czech friend told me. Shortly after the fall of the Iron Curtain, and while the native Czechs were severely set back after 70 years of communism, it was the wealthy Germans who bought up property and inflated the prices there.

[Yume-sama]

Originally Posted by dubsH

That's very true. They want a crash so they can buy-in, and then they hope that from then on prices will keep on going up. Classic "I want everybody around me to fail but me". I don't own a home (yet), but I don't see where all this fear-mongering is coming from. Honestly though, if you want to buy a house, move into an obscure village away from the cities. The cities are always going to be increasingly expensive if they're desirable.

Inicidentally (and off-topic, since this is a pretty off-topic thread, which has been rehashed time and time again by the usual suspects), I remember reading some years ago on this forum that someone wished that inheritances were not allowed and that parents could not pass on their wealth to their children, and that all their assets would get donated to charity (presumably to prevent the trust fund kids from showing off). Imagine if you spent all your life savings into a dwelling that you could not even keep or pass on! I would just rent...heh... it was an absurd suggestion, but I still remember it quite clearly.

If you haven't saved yet, and you're looking to buy, you'll be at the same place you are today and when you're at the "impending apocalypse" of the housing market. Or worse, since the local economy will tank with it.

lol I actually remember the talk about the inheritances should be outlawed

It is natural, and of the human nature to be "jealous". It is always easy to be for social justice, etc. as a young person until it's something of yours that is being taken to make it equal. Then it is really not quite so much fun. However, I think it is important to NOT be jealous, and instill in the minds of young people not a sense of entitlement (which you definitely learn when you go to universities ), but a sense that we live in a place where if you try hard enough, and make smart choices, you can do anything, and have anything you want.

Anyways, I've volunteered as a youth mentor for quite awhile (God help them, right? ) and we try to tell them that they can do whatever they want, be whoever they want, and get whatever they want through hard work. Because it's true. If we told them that they could laze through school, get poor grades, major in something useless, do drugs and party all the time, and then suck off the government tit to become successful, I'm sure so many of them would have turned out differently (rather than getting academic scholarships).... your position in life is usually your fault, but sometimes you don't know better.

Shoot for the moon and you might just get there. Aiming low is only cheating yourself.

[Nutterbug]

Originally Posted by dubsH

Inicidentally (and off-topic, since this is a pretty off-topic thread, which has been rehashed time and time again by the usual suspects), I remember reading some years ago on this forum that someone wished that inheritances were not allowed and that parents could not pass on their wealth to their children, and that all their assets would get donated to charity (presumably to prevent the trust fund kids from showing off). Imagine if you spent all your life savings into a dwelling that you could not even keep or pass on! I would just rent...heh... it was an absurd suggestion, but I still remember it quite clearly.

Ideally, everybody would have the same start line in life, and their characters would make or break their way through the rat race. And the Paris Hiltons of the world would be long dead in a ditch somewhere.

But yeah, people do have the right to do whatever they want with their earnings and pass them along to whomever they want, even to the less deserving.

[Nutterbug]

Originally Posted by Yume-sama

Shoot for the moon and you might just get there. Aiming low is only cheating yourself.

On the other hand, setting high standards and goal for yourself, and not being able to attain them due to unforeseen circumstances (eg. crippling injury, illness, etc.) will make life not worth living.

So balance your long term goals with living for the moment. The present is certain, whereas the future isn't. Heck, you may even die tomorrow.

[Yume-sama]

One of my best friends is completely blind and still has a more positive mind, work ethic than almost anyone I know.

He's in training to become an acupuncturist. A blind acupuncturist. *_*

We always joke about how frightening that would be to people meeting him for the first time lol

He also refuses to accept welfare payments~

[Nutterbug]

^ He can set goals higher than that.

Whatever happened to world's first blind CEO of a major multibillion dollar multinational corporation?

[logan5]

Originally Posted by dreambrother808

So Chinese immigrants are buying homes for themselves! The nerve...

It's like metro Vancouver condos have turned into a stock or something. Most people in Vancouver cannot afford a new condo in metro, yet they're selling like hotcakes.

I'm not sure what effect tougher regulations would have on the housing market, but somethings gotta be done.
The majority of Vancouver citizens are locked out of the housing market by people who don't even live here.

[Yume-sama]

Originally Posted by Nutterbug

^ He can set goals higher than that.

Whatever happened to world's first blind CEO of a major multibillion dollar multinational corporation?

Well, you know, he's Japanese so that's like one of those seemingly random life goals people set that you could make a good anime / manga out of. Like Yakitate Japan (King of Bread) or something~ Acupuncture is considered a serious medical study in Japan that one must study several years for

[whatnext]

Originally Posted by cornholio

I think people taking part in this thread should really go and look at what has hapend in many other parts of the world. Look at Spain, Australia, most of eastern Europe, Mexico, etc, etc. There are so many examples of exactly what will happen here if the government doesnt take action. The longer no action is taken the harder it will be to prevent a crash from happening when action is finally taken, and no action is not a option as this is not sustainable and eventually something big will have to give, an no one wants that to happen.

Of course the extreme irony here is that alot of that money is flowing into our city right now because governments in China are taking action to curtail speculation there. All three levels of government here are simply to spineless to do the same.

[trofirhen]

Originally Posted by logan5

It's like metro Vancouver condos have turned into a stock or something. Most people in Vancouver cannot afford a new condo in metro, yet they're selling like hotcakes.

I'm not sure what effect tougher regulations would have on the housing market, but somethings gotta be done.
The majority of Vancouver citizens are locked out of the housing market by people who don't even live here.

As I said in my post (#20), the Australian government has come up with laws that specifically address that issue by requiring investors to be residents-in-fact of the properties they buy. This helps stop real estate from being a purely speculative commodity.

[WBC]

Why is anybody with lots of cash "investing" money in real estate in the city that has had an unprecedented run up in real estate prices is beyond me. That is the equivalent to investing into already expensive stock that had just had 300% price increase.

[Nutterbug]

Originally Posted by WBC

Why is anybody with lots of cash "investing" money in real estate in the city that has had an unprecedented run up in real estate prices is beyond me. That is the equivalent to investing into already expensive stock that had just had 300% price increase.

Because greed blinds people. They see an upward trend, and they just impulsively think it'll continue the course.

[Yume-sama]

Originally Posted by Nutterbug

Anyways, what you say is interesting. It reminds me of what an old Czech friend told me. Shortly after the fall of the Iron Curtain, and while the native Czechs were severely set back after 70 years of communism, it was the wealthy Germans who bought up property and inflated the prices there.

I suppose "every time in history" would include this example, yes

As for your other point, it remains to be seen how long China will continue to be able to explode.

I don't see how there won't be setbacks when nearly 1 billion people still live in poverty and are bound to experience that natural human emotion of jealousy

[worldwide]

Originally Posted by Yume-sama

As for your other point, it remains to be seen how long China will continue to be able to explode.

with oil production more or less peaked and marginal supply as tight as it is... I would think not very long

[Zassk]

Originally Posted by logan5

It's like metro Vancouver condos have turned into a stock or something. Most people in Vancouver cannot afford a new condo in metro, yet they're selling like hotcakes.

I'm not sure what effect tougher regulations would have on the housing market, but somethings gotta be done.
The majority of Vancouver citizens are locked out of the housing market by people who don't even live here.

I would suggest that a large segment of Vancouver population can indeed afford to buy here. Do you have data to support your claim that a majority cannot afford?

Originally Posted by WBC

Why is anybody with lots of cash "investing" money in real estate in the city that has had an unprecedented run up in real estate prices is beyond me. That is the equivalent to investing into already expensive stock that had just had 300% price increase.

Because, uh, it's a desirable place to live in, and therefore it is a great place to invest speculatively. Surely that is obvious?

If you had disposable money to invest in real estate, where would you invest it? I bet you would look for a growing city that has proven to have more desirable features than other cities, in a stable country that outperformed most others through the last economic cycle.

Vancouver will always have that over other places, and therefore, it will always have inflated real estate prices, and therefore, it will always have speculators if the law allows them. This isn't new.

Blaming it on the latest wave of Chinese just smacks of racism to me. The British did it 100 years ago, the Americans did it 50 years ago, but god help the Chinese if they decide to do it.

[logan5]

Originally Posted by Zassk

I would suggest that a large segment of Vancouver population can indeed afford to buy here. Do you have data to support your claim that a majority cannot afford?

I don't have data. Do I need it? I thought it was accepted fact that new condos are out of reach for most people.

[Yume-sama]

Well, I think it's rather evident the population here now can afford to be here. Condos are still rather attainable, too.

Reminds me of the old joke "Nobody goes there on Sundays! It's way too fricken busy!"

Usually the average price you hear refers only to single family homes.

According to RBC, when compared to another condo heavy city like Toronto, the % of household income it takes is roughly the same (hovering around 40% which has stayed fairly steady for the last 10 years, showing that incomes rise to cover the cost of living, which is pretty much economics 101). Compare that to Calgary where the % of household income it takes to cover the expenses of owning a condo there is around 20%. But... who the heck wants to live in a condo in Calgary? The % of household income needed to cover the expenses of a single family home actually sits under where it was in 1990.
http://www.rbc.com/newsroom/pdf/HA-Report-02-2011.pdf

Which means that incomes have risen about equal with house prices.

When looking at housing pricing increase one always has to look at income to come to a conclusion on affordability.

[logan5]

Originally Posted by Yume-sama

Well, I think it's rather evident the population here now can afford to be here. Condos are still rather attainable, too.

Reminds me of the old joke "Nobody goes there on Sundays! It's way too fricken busy!"

Usually the average price you hear refers only to single family homes.

What price point do you consider affordable for most people, if you don't mind me asking?

[Zassk]

Originally Posted by logan5

What price point do you consider affordable for most people, if you don't mind me asking?

Since you said a majority can't afford, I am actually curious where you consider the cutoff to be.

[logan5]

Originally Posted by Zassk

Since you said a majority can't afford, I am actually curious where you consider the cutoff to be.

Lets go with 50k per year.I'm not sure.