“Speculative investment, the purchase of property based on anticipated price growth, has the biggest impact on housing costs in the city, according to Dan Garrison, a senior planner for the City of Vancouver. Some councillors feel this problem isn’t adequately addressed in the Housing Vancouver Strategy.
“There is significant evidence of speculative investment in our housing market that is driving housing costs,” Garrison said.
Gil Kelley, general manager, planning, urban design and sustainability for the City of Vancouver, said a lot of it has to do with excessive amounts of local and global capital from small and large investors looking to shelter their money and grow their equity.
“Vancouver is a very attractive city [as] a safe harbour for both B.C. residents and foreign investors,” Kelley said. “That coupled with low interest rates make for a pretty fierce speculative demand.”
– excerpt from ‘Vancouver to curb “fierce” demand by local and foreign housing speculators’, Thinkpol, 29 Nov 2017
As we’ve been saying for… oooh… the last decade.
Solution to Vancouver Housing Conundrum:
Price crash to the point that all speculative interest is flushed out;
property prices then return to actual utility values as determined by actual ready money in our economy.
[VancouverSun] – ‘More to come’ on money laundering allegations, B.C. attorney general says
“Attorney General David Eby says he was stunned by internal briefings about the alleged reach of transnational organized crime groups into B.C. casinos.
In a speech Friday at an anti-corruption conference in Vancouver, Eby said he could not reveal details of his concerns because of the continuing police investigations. But he gave new indications of how serious he believes the situation is…
…“The public is no longer in the dark about what is going on,” Eby said. “And they shouldn’t be. And there is more to come.”
Eby added that allegations of transnational money laundering linked to casinos go deeper than that: “I have reason to believe that these matters might be linked to other areas of B.C.’s economy.”
Eby also said that he believes B.C.’s property ownership system — in which true owners of property can hide behind opaque legal mechanisms — could be attracting foreign criminals and corrupt officials seeking to hide wealth in the province. Eby said Finance Minister Carole James is working on reforms to pull back legal veils that cover true ownership of property and corporations.
Eby pointed to a 2016 study by Transparency International that showed real estate buyers in B.C. are using shell companies, trusts and nominee buyers to hide their beneficial interest in property.
In examining Vancouver’s 100 most valuable homes, the report found that 46 per cent — amounting to more than $1 billion in assets — have opaque ownership. Of the 100 properties, 29 are held through shell companies, at least 11 are owned through nominees (listed as students or housewives on land titles), and at least six are disclosed as being held in trust for anonymous beneficiaries, the report said.
Eby said B.C.’s landownership system could be connected to Metro Vancouver’s skyrocketing home prices. Top economists have “made inescapable arguments that taxable incomes reported to Revenue Canada have no connection to real estate values in Metro Vancouver until you get out to the distant suburbs of Vancouver,” Eby said.”…
[NBC/KING5] – Police: Chinese homeowners behind pot growing factories
“Detectives believe Chinese nationals turned dozens of Western Washington homes into pot growing factories.
Their product, according to the Grays Harbor Sheriff’s Office, was being sold on the East Coast, where prices are higher for marijuana than in Washington, where sales are legal.
But growing and selling marijuana without a license, remains illegal, said Detective Steve Shumate.
Tuesday morning officers raided six homes with pot growing operations in King and Thurston counties and more than 30 in Grays Harbor County.
Shumate said the cash proceeds from the sales were put towards the home purchases.”…
Vancouver has always been a fraud-friendly, boom and bust town. From the gold rush, to 1980s penny stocks and their corrupt brokers, to today’s real estate market.
It’s a new paradigm!
I wonder why they’re saying this now, like specifically now, and not a month from now or a month ago.
These findings published in the journal DUH.
[moronic ad hominem ramble deleted by moderator -ed.]
dood … http://tinyurl.com/y77ghxdb
Arnie is a sociopath.
But muh freedom of speech
The post is moronic. My comment is caustic in the style of Kevin O’Leary. It is pithy, hardly rambling. A regurgitated post that informs no one of anything is blood in the water.
Your post was deleted because of the ad hominen component.
Arnie’s posts are ad hominem but El nino’s are not. Great job! By the way, are you gonna celebrate 10th year anniversary of this blog? I wonder how bears have survived 10 years of painfully wrong. Cover the heads by some cozy blankets, I guess.
Arnie’s post (on this occasion) cruelly insulted a specific, named 3rd party out there on the web (a female journalist).
I’d hope you can appreciate that this makes a blogger a tad uncomfortable.
The (very few) bears I know have always admitted they have been ‘wrong’ all these years.
This is the opposite of having your head under the blankets.
bleech … http://tinyurl.com/yaqzctx8
sorry wrong paste buffer … http://tinyurl.com/y9rrgk3y
what happened to bleach? … moderated? … look it up (ack!) … it’s a real thing
A price crash of 75% will not benefits many locals, including many bears on this blog.
The price crash will initially have a massive net-negative effect — local recession, jobs lost, families in distress, forced moves, retirement plans up-ended, etc.
(This is not a wish — this is what happens when an artifice such as this market collapses..)
Once the dust settles (over years..), housing here will be vaguely affordable in terms of the actual economy. It will likely never be cheap, and we expect almost nobody to benefit financially.
Our society, however, will benefit immensely from housing and other RE being fairly valued based on its use within our economy.
Southwestern BC will be a smoking crater for a generation.
The downward spiral of equity loss leading to local recession leading to job loss leading to equity loss –and the requisite exfiltration of talent and drive– will be unstoppable and ongoing for longer than anyone can believe.
Next, the impoverished locals will do what comes naturally which is to revert to socialism. That is a sure way to lock in their losses.
(The NDP’s target voters are poor people, so when they are in power they naturally do everything they can to manufacture more poor people.)
If you thought the ride up was epic, wait til you see the ride down.
Burnabonian, could you expand on your prognostication? I am curious to hear more details. I hadn’t thought about the political shift that the coming crisis will precipitate but, you’re absolutely right, a massive drop in wealth will send people into the arms of the state like nothing before it. Which, of course, means higher taxes… and a further worsening of conditions.
All I’m saying is that British Columbians tend to act like crabs trying to climb out of a bucket. When any one of them starts to get somewhere the rest reach up from the bottom and pull him back down.
And of course there will always be a hairy-arsed socialist powermonger who is happy to accept the vote of the typical self-pitying blameadjuster who makes up the population here.
“Faster ferries for everyone” they cry. “More welfare for everyone” they bellow. “More of everything for everyone!” (Followed by the natural corollary — “The only people who can’t have things are the employers because they are EVIL CORPORATIONS”.)
Seems reasonable, doesn’t it? It’s essentially the prototype for a Universal Basic Income — the NDP were ahead of their time.
Unfortunately our population has still not figured out the basic problem with socialism, which is of course that eventually you run out of other peoples’ money. The NDP figured it out and they had to wait on the sidelines for 16 years while someone else refilled the coffers.
I think that the worse things get here, and make no mistake there is going to be HELL to pay after our little 15-year real estate carnival ride, the more our population will regress…slipping softly back into the gentle caress of the ghost of Jack Layton.
I remember having discussions with folks on here who would argue that rental prices would crater once the overwhelming supply of basement suites (inverted duplexes) and investment condos hit the market… hasn’t quite worked out the way, but maybe those people have a different timeline than I do.
I am fully on board with the crackdown on the endemic money laundering that the previous administration turned a blind eye to. At least those darn NDP socialists are getting that right…
Oh, that’s good, Burnabonian. That’s very good.
So much gold in Burnabonian’s post. Good writing is visual — “crabs”, “hairy-arsed”, “carnival ride”. Love it.
And no, it’s not too soon to call up Layton’s ghost. Not when it comes to the dangers of socialism.
“Retired” short stock maven Marc Cohodes is back. But he’s going long. Buying and boosting. Whatever floats his boat.He has charisma. Interesting to listen to. Trust him? Sure.
pffft! … http://tinyurl.com/ybqt9dhu
That’s a fascinating link.
Strangely, what jumped out for me was how Mr Cohodes couldn’t leave his nose alone. What does that body language reveal – that has been studied a lot – see Bill Clinton’s testimony.
Or did he just have an itchy nose.
If Cohode’s nose was dripping, he would have pulled out a snot rag.
What are the odds, with 20/20 hindsight that he’d have picked up that Home Capital bone.
And if he hadn’t picked up that juicy-looking short what would have happened to the company. Probably nothing – they’d be still making mortgages to those shunned by the big banks – and they’d still be in business with an acceptable default rate.
My own mortgage was so far from conventional – real financial legerdemain. No bank would have touched me. Consequence? Have lived well since; raised two kids; built over a million in equity.
Cohodes portrays himself as some kind of crusading knight. Believe him at your peril.
It would be interesting to hear him spouting about bitcoin.
if that’s what you’re thinking, you’re missing most of it … trust me, i have realvision
“built over a million in equity.”
2843 20th Ave E: Flip. Minimal fluffing. Illegal covered deck. Bought four months ago. Bumped $400K.
pls explain this … http://tinyurl.com/ydekfsb2
3031 20th Ave E: Renoflipping Beavers at work. Bought from croakers this year for $1.425M. Listed at $1.759M.
1968 Vancouver Specdom – scraping the bottom of the open concept barrel. Atrocious layout. No detatched garage. Small lot. Walkable to Renfrew Skytrain, but the walk back is a high-grade hike. You don’t want to be carrying anything unless you have strong legs and a good heart. Ton of Nootka School traffic twice a day – drive you batty. You’d have to be batty to buy this. But choices are slim to none. Between land assemblies and junk that agents haven’t bothered taking down since last year’s snowfall, it’s a take it or leave it scenario. Brutal for choice. Brutal.
The particular kind of insanity that lends itself to believing that a $1.5MM bungalow in a boring neighbourhood with poor incomes will go to $2MM and not $0.xMM also lends itself to other stupid ways of wasting borrowed money on the modern equivalents of horse racing.
Is the BTC bubble impacting liquidity available to the YVR bubble?
How can we tell?
pffft! … http://tinyurl.com/ycsyve6b
Ask yourself who the people are who have driven the crypto market cap to half a trillion?
The same people who are so awash in borrowed money and so desperate for yield that they will buy Bre-X, Pets.com, and a million dollar concrete cube beside the Metrotown skytrain.
From what I hear, it’s the people who have quintupled their money in NFLX and NVDA and want a little diversification.
welcome to we are all zimbabwe
weinstein market … even when you’re not in you’re in … so jump in, know it’s going to blow, hope to get out in time … or … exercise ludicrous patience, position for opposite eventuality … pick one … meanwhile … http://tinyurl.com/ybhfa4ew
so i have been coming here since 2010, waiting and hoping for the crash. Last year i caved and bought a half dueplex in the fraser valley for 280k now i can sell for 400k easy, i may take the money and run.
no take the money and get a bunch of these … http://tinyurl.com/ycggyqo8
I don’t advise you to take free advice from strangers on the Internet – but I would hit the bid.
I think 2018 could be a good year for buyers:
what do you think of this … http://tinyurl.com/yddcnszs
pffft! … merry christmas happy holidays happy new year … http://tinyurl.com/hup44qd … ciao out
Condos projected to start at 1.5 – 2.0 million for 500 square feet.
Yay! Affordable housing coming to your neighborhood….
Merry Christmas everyone!
crypto friday … http://tinyurl.com/ydf8t7t2
Empty Home Tax – more potential perils for home buyers.
Need another post. The idiocy of the image here is exceeded only by the writing – a double barrelled blast.
Why don’t you start your own blog where you can rant freely rather than tarnish an otherwise respectable place like this.
Not crashing yet.
Interesting dynamic here in Rio de Janeiro. Prices in the swankiest neighborhoods have held up, while falling by double digits in less-desirable areas. Exact opposite of Vancouver.
Lesson in there.
The graph that says it all:
pretty graph. hope your 2018 will be brighter for you.
Fred is not a fan of facts.
Not at all. I am a huge fan of reality though; you are a living proof of it.
[VancouverSun] – Douglas Todd: Vancouver’s housing crisis revealed by looking to China, Australia, New Zealand
“A clutch of real-estate industry and government officials in Canada still want the public to believe foreign capital and immigration policy have little to do with the sky-high housing markets in Vancouver and Toronto. But the evidence is pushing their vested voices to the fringe of the affordability debate.
Profits made in China and East Asia, then invested in Canadian real estate, have been responsible for a significant portion of exorbitant housing costs in Canada’s big cities. Yet Australia and New Zealand are doing much more than Canada to face the same challenge. They’re openly reining in the offshore demand that is contributing to housing havoc for locals, many of whom are being forced to leave their cities.
UBC geographer David Ley, author of Millionaire Migrants, joins SFU’s Qiyan Wu in maintaining Chinese investment has become “a fundamental” of Metro Vancouver’s real estate market, up there with interest rates. National Bank of Canada economists estimate “almost $13 billion was spent by Chinese investors in Vancouver” in one year alone.
Indeed, this year’s move by China’s authoritarian leaders to severely restrict how much money they will allow to leave their populous country appears to be a key reason prices on high-end detached houses in Metro have this fall been dropping by 15 to 20 per cent, even if most of the public hasn’t noticed.”…
lolz … http://tinyurl.com/y74xwfnm
They buying condos now
weebles wobble but they don’t fall down … pffft! … http://tinyurl.com/yatttknr
The focus of this blog is Vancouver, but the fact is the whole of Canada is toast.
lolz … http://tinyurl.com/y7682o4k …
icymi … http://tinyurl.com/yb93czuk …
Lots of signs out on SW Marine Dr. Someone’s money is heading for the exits . . .
Or trying to grab a developer before it is too late?
check 5yr view … http://tinyurl.com/y86tn7s2 … too late when support breaks