Monday, November 14, 2011

The Province Asks if It's Time to Curb Foreign Real Estate Purchases

Is it time to curb foreign real-estate buying in Vancouver?
Not only does this speculative buying seem to be driving housing prices into the stratosphere - Re/Max recently reported the sale of Vancouver homes worth more than $2 million rose by 118 per cent in the first four months of this year - it's starting to have a corrosive effect on the economy as young people start to leave the city in search of affordability, she said.

"This erosion is really undercutting our future sustainability and other strengths," she said. "We are losing a generation of young people."

Basically, this is a perennial blog topic gone mainstream. And the comments on the article show it. A lot of vicious language in there and foregone conclusions.

Underpinning the article is the steadfast belief that Canada welcomes all comers and that belief restricts how this topic is approached, in contrast to a blog, anyway. They gave examples showing the broad range of uncertainty about how much market influence was in play. They quoted good old Cam Good, who is always got his mug plastered on articles of this sort. He whines a bit about whiners, funny enough. But the article fails to address the most interesting question regarding this topic, which is, what is the economic background of this wave of immigrants? I'd love to see a survey on this, but I know that's a dream.

The Chinese system doesn't operate the way the Canadian (or U.S. one does). It rewards people for different things. This wave represents the most successful players out of that system. How many of these sometime immigrants are from the private sector. How many were bureaucrats? How many from state-owned enterprises? Money is influence, even though the numbers aren't huge (11k 12k a year?), their influence is presumably in excess of the numbers, so I find it surprising that their origins are so opaque. Canada just sort of happens by accident like that, and apparently likes being that way so no one collects any data (or publishes what they do have).

On the upside, having this wave sink their cash into overpriced real estate guarantees they will lose half of it while funding a few retirements, so there is that.


jesse said...

GG said...

Philippine nannie must be a redundant phrase.

Interesting that "England" is called out as a major category, rather than "UK".

jesse said...

A Malaysian cartoon from the '80s I saw depicted the Philippines national army in a war room moving around nanny pieces on a warboard.