REVscene Automotive Forum - Racist to blame Chinese buyers for high housing prices?

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Racist to blame Chinese buyers for high housing prices?

According to this article, it is: Blaming Chinese for high house prices in Vancouver is racist

Agree/Disagree?

For those too lazy to click the link:

If you believe that house prices are being driven up in Vancouver because realtors are catering to wealthy offshore Chinese you are living in a fictional world. It is happening in our city's housing market, but it's statistically insignificant.

Vancouver Real Estate Board president Eugen Klein will tell you that off-shore buyers make up about three per cent of house sales. It has been at that level for years. The number comes from a monthly internal poll of his members and cross checks with land title transfer records.

If you really want to see a jump in home prices, Klein says, check out Maple Ridge. In the past year, single detached homes have gone up 30 per cent, more than anywhere else in the region. And it has zip to do with off-shore buyers. It is "real estate 101" says Klein: Infrastructure. Build it and they will come. It's the Golden Ears Bridge, which has set that market on fire.

And if you doubt that infrastructure has an impact on property values, you should check out what's happening along the Canada Line.

But back to those foreign buyers: This week the Globe and Mail ran a story about the rapid sale of condos in the new 428 unit Telus Gardens. Only four of the buyers were offshore. That information was collected as a result of the requirements from FINTRAC, the federal agency that monitors money laundering and criminal organizations.

Yes, yes, many of you have probably heard this story: Realtor picks up Chinese guy at the airport in the morning and spends the day touring him around choice properties on the West Side. As they head back to the airport, the realtor says: "We've looked at 20 properties and you haven't said a word. Didn't you like any of them?" As the Chinese guy steps out of the car he turns back to the realtor and says: "Buy them all." Well, that story is an urban legend. Not true.

We do tend to conflate two things in our search for the truth: offshore buyers from China and Canadians of Chinese origin moving into the house next door. When I asked developer Michael Geller if he thought Chinese foreign investors were driving up the cost of residential housing in Vancouver, he first said there is not much statistical evidence so we are stuck with anecdotal information. But he also noted: "My friend just sold his Kerrisdale house for a few hundred thousand dollars more than he expected, but he doesn't know if it was a local Chinese, or non-resident Chinese buyer."

Ask former senior planner Larry Beasley about the view that Chinese foreign buyers are driving up the market and he'll tell you it's "bullshit." He also points out that it is "racist."

We have an unfortunate tendency to vilify someone or something when we have a problem and seek a simple solution. In this case, the problem is the extreme shortage of affordable housing. You can do as the city has decided to do, which is set up a task force to deal with affordable housing and involve as broad an assortment of experts as possible to deal with it.

Or you can set your hair on fire and blame Chinese foreigners. Then you can turn to the simple solutions that racists frequently come up with: quotas. I'm surprised we aren't hearing proposals to reintroduce the head tax.

And who do you decide to hang this fictional phenomenon on? Who better than your local politician. Reaching for another stereotype, you blame politicians who won't do anything about this because they are all corrupt. They need to line their political party's pockets with money from big real estate developers who are making a fortune selling houses to all those Chinese foreigners.

If you buy into this proposition, you shut down serious debate about the need to increase supply through densification and changes to zoning regulations, to say nothing of what kind of city we all want to live in. Together.

agarr@vancourier.com

© Copyright (c) Vancouver Courier

Read more: http://www.vancourier.com/Blaming+Ch...#ixzz1rfeSNlc1

What do u think.. -.-

Not sure if serious...

Quote:

Originally Posted by ilovebacon (Post 7881398)

What do u think.. -.-

I haven't been paying enough attention to the RE market. Just watercooler talk around the city about the influx of Chinese buyers we are getting. However, I am wary of anything that labels something "racist". We throw that word around FAR too much, but in this case, it is hard to ascertain where any of the money is really coming from since foreign buyers use a lot of proxies. So unless I see some statistics that shows the money is definitely coming from China, I will hold my judgment.

Fucking fuck....here we go again...

Quote:

Originally Posted by Gumby (Post 7881404)

Not sure if serious...

This is a discussion forum. Last time I checked, this is also a pretty big issue in Vancouver, and I have seen a bunch of threads recently about the Chinese buyers in Vancouver (RS also seems to have a love affair of anything pertaining to China). So read the article and state your opinion and we can have a discussion.

I personally think it is an issue, although I myself am Taiwanese, but growing up in Ladner I was never really part of the whole "bourgeois" category, so I can't really judge...

But I will say that rich like it's crazy Chinese people definitely bring their values over to Canada, and most of the time it's rather unpleasant to be around them.

Quote:

Originally Posted by epicbeardman (Post 7881408)

This is a discussion forum. Last time I checked, this is also a pretty big issue in Vancouver, and I have seen a bunch of threads recently about the Chinese buyers in Vancouver (RS also seems to have a love affair of anything pertaining to China). So read the article and state your opinion and we can have a discussion.

Quote:

Originally Posted by epicbeardman (Post 7881405)

I haven't been paying enough attention to the RE market. Just watercooler talk around the city about the influx of Chinese buyers we are getting. However, I am wary of anything that labels something "racist". We throw that word around FAR too much, but in this case, it is hard to ascertain where any of the money is really coming from since foreign buyers use a lot of proxies. So unless I see some statistics that shows the money is definitely coming from China, I will hold my judgment.

So which is it?

The article did not mention the vast amounts of permanent residences, investor immigrants, PR card holders, students on study visa, Canadian citizens with Mainland China origins and so forth. they are the real culprit.
Instead, the article only focuses on the visitors that are buying our real estate. Then of course that percentage is going to be low.

Quote:

Originally Posted by CRS (Post 7881415)

So which is it?

Both. I personally haven't been paying attention to the RE market, but a lot of people are talking about this issue.

I personally don't pay attention to the Canucks, but people are talking about them and they're a big issue.

Get my drift?

OP, the problem people are having with you is that you post a link, copy and paste the article and add no value to the discussion that you are trying to start.

Quote:

Originally Posted by epicbeardman (Post 7881420)

Exactly; that's why you don't post in the Canucks forum...So why are you posting about this??

Quote:

Originally Posted by bballguy (Post 7881429)

Exactly; that's why you don't post in the Canucks forum...So why are you posting about this??

Why are you posting with nothing to contribute? :suspicious:
Constant failing doesn't contribute.

They say that Maple Ridge housing market has gone up by 30% because of the Golden Ears Bridge.. yet the Golden Ears Bridge took a loss last year..
Golden Ears bridge tolls not meeting targets

And with unpaid tolls as well contributing to the loss of revenue:
Golden Ears Bridge struggles to collect unpaid tolls - News1130

Sure it might have contributed but you can't say "Oh wow! The HUGE 30% increase is ALL THANKS to the Golden Ears Bridge" because that's false.

Truth? Vancouver, Richmond, Burnaby, New Westminster and now parts of Surrey are becoming SO inflated that if you want a detached home.. you have to venture to parts of Pitt Meadows, Maple Ridge, Langley, Abbotsford or Chiliwack/Mission.

I haven't see an article listing exactly WHO bought WHAT property, but I can say that the "3%" of foreign buyers are buying properties and probably not caring who much it costs. Which will not help lower BC's housing market.

Quote:

Originally Posted by RFlush (Post 7881426)

OP, the problem people are having with you is that you post a link, copy and paste the article and add no value to the discussion that you are trying to start.

I already wrote what I feel and until I do more research in the matter, I don't feel I am as qualified as some of the other members on RS who have been following this closely, or who work in RE. It's really simple, I just wanted to know what people feel on the issue, and I can ask questions and write what I feel as the discussion goes on.

http://www.revscene.net/forums/66540...r-again-2.html

It's the same shit being discussed every time......

Quote:

Originally Posted by bballguy (Post 7881429)

Exactly; that's why you don't post in the Canucks forum...So why are you posting about this??

What's wrong with you man? You have nothing to contribute and you just come in with your hand over the fail button already. I don't mind the failings, but at least write something of importance. I will humor your question:

1. If I saw an article that was related to the Canucks that will start discussion I will post it. I don't care much for the team, but they are still my team and I want to hear my what fellow Vancouverites have to say about the article.

2. This is off topic. The issues here are more general. That is the Canucks forum for a niche topic.

3. This issue affects everyone in Vancouver, the Canucks, not so much.

4. I will post whatever the fuck I want about issues pertaining to Vancouver, and if you have nothing to contribute, then stay the hell out.

The attitude of this forum, sometimes. FFS.

Asians have a love affair with owning a house before anything else.
Westerners have a love affair with living within their means.

Different values. That's all.

Quote:

Originally Posted by melloman (Post 7881433)

I agree. There is a huge trickle down effect; it doesn't really matter if there is only a 3% foreign contribution- if those 3% are buying million dollar homes everyone will feel the consequences. I mean this concentrated in West Vancouver/ DT Vancouver, but even in New West I can see the prices have gone up. Thanks for contributing.

The only reason why stories of wealthy foreign investors buying British Columbia real estate perpetuates is because Vancouverites love nothing more than to complain about the cost of living within a close proximity of the downtown core.

-Statistically foreign investors are insignificant to total sales and real estate prices.
-Real estate is a free market. The prices are a reflection of supply and demand. When more houses become available or the demand for properties declines prices will drop.
-Until then if you can't afford to buy a home rent or move further out.

Are there Asian or "Chinese" immigrants buying properties in the Lower Mainland? Yes. Are they a huge influence on property values? Not really, and if they do, in small areas of the Lower Mainland.

Much of the rise in property values has occurred due to the low interest rates and the social stigma to buy a home. When RE first starting booming in the early 2000's, there were many first-time homebuyers and at the time, real estate was fairly affordable. Just before the 2008 mini-crash, flipping was rampant and there were lots of people that probably made quite a bit of money in that time (myself included).

However, post 2008, RE once again took off, since debt was cheap and people that thought they missed the boat the first time, really wanted to get into housing now. So here we are today, cheap mortgages (debt) have enabled most Canadians to get into houses they probably cannot afford. In the last 5 years, most of the mortgages sold were high-ratio mortgages, with most downpayments around the 5-10% mark.

Again, 3% of foreign buyers did not perpetuate this housing bubble that we see today.

Quote:

Originally Posted by MindBomber (Post 7881454)

I agree. However, the whole wealthy foreign investors buying BC RE keeps going around because of media, primarily due to GlobalTV to be honest. All these staged helicopter showings, the PLS introduction and the Marine Gateway fiasco is just garbage being thrown at the public.

I honestly think that either me or someone else should start an "official" Real Estate thread either here or in the Home section.

The problem is "statistics" is useless because no one is collecting the information, not the feds, not the province, not the city.

We don't know if it is locals or foreigners or martians buying the properties.

You can't say it is statistically insignificant when we don't even collect the data!

Who to blame? The feds. But with them cutting into census etc, I won't see the situation will improve soon. And realistically gov thrives on urban legends.

Quote:

Originally Posted by MindBomber (Post 7881454)

Quote:

Originally Posted by godwin (Post 7881471)

Fair enough.

Logically however, Vancouver isn't becoming quickly populated with vacant homes and the rental market has not seen a significant upswing in the availability of properties. If foreign investors are buying enough real estate to causes significant inflation in the market, wheres the residual affect?

In addition, while it's foolish at best to trust a real estate agent, I'm inclined to believe the internal poll figure of 3% mentioned in the article.

I'm going a little off-topic here, but Jason posted this in the stock market thread and it's an excellent read. People are obsessed with the idea of owning a home, when really, there's not a financial benefit to do so..

Quote:

Originally Posted by jasonturbo (Post 7881188)

I don't think people here would consider selling their house to put the money into a 2% "high interest" savings account.

There are various financial devices that can guarantee you a fixed income of at least 6% with virtually no risk.

Say you bought your place for 600k (with a 5% 30000$ down payment, 4% 30-year mortgage, which also cost you CMHC insurance of ), and lived in it for 5 years, sold for 800k and then invested your money while waiting on the market to dip..

Based on a 25% drop over 2 years, on a nice 2 bedroom apartment in North Van which today would be valued at 800k, let's play the math game. (keep in mind, renting this apartment would cost you about 2700$/month)

One time CMHC insurance cost of 2.75%: 15675
One time down payment of: 30000

Your current monthly mortgage payment: 2707/month = 32484
Condo Fees: 350/month = 4200/year
Maintenance: 100/month = 1200/year
Total minimum basic cost per year: 37884/year

Total one time cost: 45675
Total revolving cost over 5 years: 189420
Total spent over 5 years: 235095

Equity in the home:
Down payment: 30000
Mortgage payments on principle: 54805 (The rest is donated to the bank of course!)
Total equity: 84805
Now with market appreciation (+200k selling price) 284805$

Delta - 49710

At the time you sold the home you made a 49710 profit, then the Realtor(s) (scumbags) takes their cut of 2.5% of the sale price (It's actually highter) so now the profit over 5 years is cut down to 29710$... and that's assuming you only spend 1200/year on maintenance, which IMO is probably too conservative. So what did you make? Nothing, cause you just got your down payment back.

So after five years, 4% mortgage over 30 year period, with 5% down, you made -290$.. and that's after the property appreciated 200k (25%)...

Now having said all that, sure some people got lower interest rates, some people put more than 5% down... but I'm trying to keep this realistic based on the avg down payment of 7% in Canada, average amoritization period of 32 years, and median household income.. and how many people can even probably come up with the 30k to put down on a place lol. (Matter of opinion I know....)

On the flip side, if you rented:

Total one time cost: 0$ (You get your damage deposit back after all.)
Total monthly revolving cost: 2700$/month = 32400/year
Total spent over 5 years: 162000

And with investing taken into consideration:
30000k down payment you didn't spend at 6.5% annual return over 5 years:
Year 1: 30000x.065= 31950
Year 2: 31950x.065= 34026.75
Year 3: ... 36238.489
Year 4: ... 38593.991
Year 5: ... 41102.6

Monthly savings of 450/month on condo fees and maintenance:
Total savings over 5 years: 27450
Total interest on savings over 5 years (at 6.5%): 4828.16

Total savings and interest (dividend income from pref shares at 6.5%):
73380.76$

So in the same time you owned a house that actually cost you 290$, you saved an additional 27450$, and made 15930.76$ in investments.

So where did you end up? 43090.76$ ahead by renting.. even though the market jumped 25%...

Sure if you have deep pockets this math doesn't matter to you, but for the average person, based on median household income, average savingd, and Canadian debt to income ratios.. it's pretty realistic for most people.

So back to the original point of this post, if you sell now and buy back in a couple years at 200k lower... taking the monthly savings and investment concept I displayed above for the renting scenario you would have....

Money saved/earned from renting with lower monthly expenses and the money made from 200k profit (assuming you have the equity at the end of the day) invested at 6.5% would put you ahead 238328.21$ in two years if you bought the same place after a 25% dip... never mind what you will save on your next mortgage with your giant down payment, it's well over 100k over the amoritization period.

Busy at work and this was a lot of screwing around with calculator on my Blackberry lol... so hopefully it all makes sense...

I think stock market is outpacing real estate market.. at least in the fields that I have vested interest in.

Again the lack of information plays both ways. I think the figures is way less than what they are saying. But without the information both pro and cons group can say whatever they want.. and I think it just suits both sides just fine.

Quote:

Originally Posted by MindBomber (Post 7881483)