Land Pimps:Offshore bids price Canadians out of housing market

[billthepill]

Pretty good article talking about how the real estate world has changed permanently and devastatingly for the average Canadian. Real shame for those who can never afford a home in the neighbourhoods they grew up in due to outside influences.

Offshore bids price Canadians out of housing market
Toronto bungalow sells for $421,800 over asking price in market's 'new reality'
By Prithi Yelaja, CBC News Posted: Mar 15, 2012 6:53 AM ET Last Updated: Mar 15, 2012 12:02 PM ET

http://www.cbc.ca/news/canada/story/2012/03/14/real-estate-overseas-investors.html

"Overseas investors are snapping up properties in Canada's largest cities, driving up prices and pushing ordinary Canadians out of the housing market, observers say.


Real estate experts call it the "new reality," and the high price paid for a north Toronto bungalow is the latest evidence.

This month, the three-bedroom bungalow, circa the 1960s and without much updating, sold for $421,800 over the asking price, creating a buzz among agents and other buyers.

Located in Willowdale, where similar detached houses typically sell for just short of $900,000, the bungalow at 300 Dudley Ave. was listed at $759,000.

http://www.cbc.ca/gfx/images/news/topstories/2012/03/14/li-620-willowdale-c2285373.jpg

The winning bid of $1,180,800 came from a university student whose parents live in China and own a business in San Francisco. There were four other bids of more than $1 million.

Michael Adelson represented the seller of the Willowdale bungalow. (Michael Adelson)
"The initial response was quite vociferous," said Michael Adelson, a Re/Max agent who represented the seller and received several phone calls about the deal after it was done.

"There's a lot of anger among Canadians who earn money here that they've been priced out of the market. There is some degree of anxiety about how people are going to compete with these hyper-inflated prices."

[Dina_E]

You don't have to live in toronto.

This applies to canadians and new immigrants. Plenty of nice small cities and towns with cheaper housing.

This article sounds like whining

[elmst200]

I think this is an isolated case. Vast majority house purchasers are Canadians (pernamant residents and Canadian citizens who are living in Canada).

In GTA we don't have statistics on non-resident-owned-properties. However, in Metro Vancouver region, there is a report showing by the end of 2009, non-residents (owners of Metro Vancouver properties whose permenant residence is in other countries) own a small fraction of all residential properties, about 0.6%. Non-residents from China own a very number of properties, those from HK and Taiwan own about 0.1% of all Metro Vancouver properties.

[andrew2good4u]

Isn't this a repost?

I read somewhere else on the forum that the realtor chose a low asking price to incite a bidding war. Apparently the last property sold in that area was sold for 900k+ 2 years ago. Wouldn't it be nice is media outlets gave ALL of the information?

[akira1971]

Pretty good article talking about how the real estate world has changed permanently and devastatingly for the average Canadian. Real shame for those who can never afford a home in the neighbourhoods they grew up in due to outside influences.

Yeah, kinda like how the oil boom in Alberta the real estate market took off as people moved there for jobs. But that's okay for other Canadian's to price out normal Albertans who "can never afford a home in the neighbourhoods they grew up in due to outside influences", right? And how about those Albertan's that benefited from the housing boom to buy in BC, driving those prices out of the range of normal British Columbian's?? According to you, that's just shameful.

Status quo where everyone is poorer without foreign investment is so much better. Thanks, but no thanks. I'd be happy if some "crazy" foreigner overpay for my house.

[akira1971]

Isn't this a repost?

I read somewhere else on the forum that the realtor chose a low asking price to incite a bidding war. Apparently the last property sold in that area was sold for 900k+ 2 years ago. Wouldn't it be nice is media outlets gave ALL of the information?

True. Just took a look on MLS. Two nearby bungalows on Dudley Ave. - one for $1,299,00 (http://www.realtor.ca/propertyDetails.aspx?propertyId=11633485&PidKey=-1526023676) and one for $1,180,000 (http://www.realtor.ca/propertyDetails.aspx?propertyId=11664857&PidKey=-127536995). Seems they bought it just UNDER the average price or the neighborhood.

[Syne]

This is just another wedge driven between the 'haves' and the 'have nots'

The 'haves' benefit from foreign investment, getting even more and the 'have nots' have an even greater barrier to entry to home ownership in areas where most of the jobs are.

[gman]

Pretty good article talking about how the real estate world has changed permanently and devastatingly for the average Canadian. Real shame for those who can never afford a home in the neighbourhoods they grew up in due to outside influences.



Who is average Canadian? Average Canadian who does not own a house or an average Canadian who became millionaires owned a house?

[akira1971]

This is just another wedge driven between the 'haves' and the 'have nots'

The 'haves' benefit from foreign investment, getting even more and the 'have nots' have an even greater barrier to entry to home ownership in areas where most of the jobs are.

Bull. There are plenty of affordable housing in GTA - not every needs to live in the more prestigious neighbourhoods with $1m+ homes. I don't remember the exact number, but there was over 100,000 new condo units just in the downtown core between 2009-2011.

And why exactly is there so much demand for homes in Toronto? Because a lot of the well-paying jobs are located here. So the wedge isn't "foreign investment", but a good education or learning an important trade.

[Faemow]

It's a double edged sword IMO. My gf and i are lookign for our first place together but the prices are ridiculous. Many friends have moved up north to stouville or 9th line. Houses are plentiful up there but what a pain to get DT if your office is there. On the flip side of the coin, the house she grew up in is appreciating in value leaving her parents with a tough choice. Sell the house now at a high and find a smaller place? or risk waiting for another recession only to not sell there place. Ever read Outliers? It feels like my generation (25-30's) are getting the *****-end of the stick when buying now since we're not getting financial aid from wealthy parents. Why are there more and more young adults staying home? Houses are too expensive, not enough work for graduates, taxes are increasing, goods/services increasing.

Would Toronto ever end up like Dubai where investors pulled out overnight and left the city 1/2 built?

[SoBored]

lol why would a young adult buy that ugly looking bungalow?

especially since his parents bought it, and they are foregin, i doubt it will even be his main residence

should've bought a penthouse downtown and live in luxury

[rems]

It's a double edged sword IMO. My gf and i are lookign for our first place together but the prices are ridiculous. Many friends have moved up north to stouville or 9th line. Houses are plentiful up there but what a pain to get DT if your office is there. On the flip side of the coin, the house she grew up in is appreciating in value leaving her parents with a tough choice. Sell the house now at a high and find a smaller place? or risk waiting for another recession only to not sell there place. Ever read Outliers? It feels like my generation (25-30's) are getting the *****-end of the stick when buying now since we're not getting financial aid from wealthy parents. Why are there more and more young adults staying home? Houses are too expensive, not enough work for graduates, taxes are increasing, goods/services increasing.

Would Toronto ever end up like Dubai where investors pulled out overnight and left the city 1/2 built?

I dont know what you were doing but my friends were saving up. Most of my friends (including myself) have bought our homes before 30 - and we don't have wealthy parents. Granted we don't have detached homes in the heart of Toronto but you make sacrifices and figure out if you want more room or a better location.

[Syne]

Bull. There are plenty of affordable housing in GTA - not every needs to live in the more prestigious neighbourhoods with $1m+ homes.

Lol, did you see the picture of the house in the OP? That's not a prestigious house. That's a crappy little bungalow.

Here, let me do a comparison.

http://www.merdu.com/wp-content/uploads/2011/10/the-split-house-00-944x590.jpg

This is where I'd expect a millionaire to live, or someone who had a cool milli to blow on a home.

http://www.cbc.ca/gfx/images/news/topstories/2012/03/14/li-620-willowdale-c2285373.jpg

This is the 1.2 million dollar crappy little bungalow from the OP, bought by some bobble-headed Chinese kid with his parents bankrolling him.



I don't remember the exact number, but there was over 100,000 new condo units just in the downtown core between 2009-2011.

Condo is fine for a starter/investment place. It's not a 'home' though. It's a box.


And why exactly is there so much demand for homes in Toronto? Because a lot of the well-paying jobs are located here. So the wedge isn't "foreign investment", but a good education or learning an important trade.

I never said that foreign investment was the only wedge. It's just piling on the already insurmountable gap.

[elmst200]

Investors and foreigners are not mixed up. There are sizable property investors in the Toronto RE market, how many of them are foreigners? nobody knows.

[Faemow]

I dont know what you were doing but my friends were saving up. Most of my friends (including myself) have bought our homes before 30 - and we don't have wealthy parents. Granted we don't have detached homes in the heart of Toronto but you make sacrifices and figure out if you want more room or a better location.

Oh i have my own condo now....but trying to buy again is tough....not so tough for my gf as she's been saving up. We dont' want a condo, but more of a TH or semi-detached or detached home close to some major hwy arteries. A place where we are not reliant on elevators. A place that's perhaps is free hold or where I can do the servicing so I know where my maintenance fees are going towards. living in stouville or 9th line is way too far. Both not a fan of long commutes, a sacrifice we won't succumb to at the end of the day.

As previously mentioned a condo is a box. My initial investment will be about 3-5 years (new construction) before the maintenance fees even things out. I hope to be gone and renting my condo in 3-5 years.

[philliplewis98]

But is it easy to buy a house? :(

[Dilton]

It is time to FORBID foreign ownership of Canadian residential real estate. Whoever is not a Canadian citizen should not be permitted to buy a house in Canada, period. All non-Canadians should be forced to sell their house at fair market value, or have it confiscated by the government. We have a situation where hard-working Canadians cannot afford an average house and this has severe negative long-term effects on our economy (though the effects are not so bad in the short term).

[philliplewis98]

It is time to FORBID foreign ownership of Canadian residential real estate. Whoever is not a Canadian citizen should not be permitted to buy a house in Canada, period. All non-Canadians should be forced to sell their house at fair market value, or have it confiscated by the government. We have a situation where hard-working Canadians cannot afford an average house and this has severe negative long-term effects on our economy (though the effects are not so bad in the short term).

But what happen do not work huh?

[Xpwmata]

In the Toronto market, its very common for International Students from China to purchase property bankrolled by their parents. In this case technically yes its an offshore bid, but these students often plan to obtain residency following their study.

When I sold my condo beside STC, I remember having teenage kids coming by to kick the tires. hahaha

[najibs]

Isn't this a repost?

I read somewhere else on the forum that the realtor chose a low asking price to incite a bidding war. Apparently the last property sold in that area was sold for 900k+ 2 years ago. Wouldn't it be nice is media outlets gave ALL of the information?

Smart realtor. As a seller, I'd want to hire him :twisted:

[CDNPatriot]

Interesting. Torontonians whine about how their taxes are too high. Whine they are bankrupt and want the province and country to pay for their subways. They whine that their public service is overpaid and that they can't afford it. Then here they are buying up million dollar houses.

Insane! Only in Toronto. Then they wonder why they are hated all over Canada.

[Xpwmata]

Interesting. Torontonians whine about how their taxes are too high. Whine they are bankrupt and want the province and country to pay for their subways. They whine that their public service is overpaid and that they can't afford it. Then here they are buying up million dollar houses.

Insane! Only in Toronto. Then they wonder why they are hated all over Canada.



Quite amazing how you have mixed municipal/provincial/federal issues and a psychoanalysis of the collective psyche of the population of Canada into one collective mess

clap*clap*clap

[Kohanz]

It is time to FORBID foreign ownership of Canadian residential real estate. Whoever is not a Canadian citizen should not be permitted to buy a house in Canada, period. All non-Canadians should be forced to sell their house at fair market value, or have it confiscated by the government. We have a situation where hard-working Canadians cannot afford an average house and this has severe negative long-term effects on our economy (though the effects are not so bad in the short term).

If foreign ownership really is driving up RE values, why would any "hard-working Canadian" homeowner be on board with this. "Yes, please massively devalue my most valuable asset!".

[spike1128]

If foreign ownership really is driving up RE values, why would any "hard-working Canadian" homeowner be on board with this. "Yes, please massively devalue my most valuable asset!".

The foreign buyers were buying the places up for years. The newspaper keep saying it's not driven by them, of course it is. Media been lying all along.

The China Chinese are just being funny, they buy crappy bungalow for 1 million bucks. They will have to sell eventually, because after their study here, they won't find a job. Their best bet is to go back to China after studying. I have yet found a China born Chinese who study in Canada that can speak proper English, therefore they don't get a job (poor communication). No problem if they want to buy high sell low, I will buy this bungalow for 1/4 of the price they paid :D. : D

[Kohanz]

The foreign buyers were buying the places up for years. The newspaper keep saying it's not driven by them, of course it is. Media been lying all along.

The China Chinese are just being funny, they buy crappy bungalow for 1 million bucks. They will have to sell eventually, because after their study here, they won't find a job. Their best bet is to go back to China after studying. I have yet found a China born Chinese who study in Canada that can speak proper English, therefore they don't get a job (poor communication). No problem if they want to buy high sell low, I will buy this bungalow for 1/4 of the price they paid :D. : D

Oh, the irony.

Also, you didn't address my point at all, which is: if foreign investment in RE has driven up prices, then limiting this investment will cause RE values to plummet, which will infuriate Canadian homeowners.

[sandikosh]

It is time to FORBID foreign ownership of Canadian residential real estate. Whoever is not a Canadian citizen should not be permitted to buy a house in Canada, period. All non-Canadians should be forced to sell their house at fair market value, or have it confiscated by the government. We have a situation where hard-working Canadians cannot afford an average house and this has severe negative long-term effects on our economy (though the effects are not so bad in the short term).

I can see it now. Government forbids foreign ownership. Real estate values drop. Home owners petition government to overturn ban.

[Piro21]

Interesting. Torontonians whine about how their taxes are too high. Whine they are bankrupt and want the province and country to pay for their subways. They whine that their public service is overpaid and that they can't afford it. Then here they are buying up million dollar houses.

Insane! Only in Toronto. Then they wonder why they are hated all over Canada.

The rest of Canada has lived on Toronto's money for decades. Us having to ask for some of it back is just a symptom of it not being spent to develop the city.