Real Estate

Vancouver housing bubble?

  • Last Updated:
  • May 31st, 2020 2:17 pm
Tags:
None
Deal Fanatic
Oct 7, 2007
6668 posts
2964 upvotes
Buggy166 wrote: gentrification isnt a millenial invention. Its also not the millenials who are buying 50 condos at once or pre-purchase units from China.

your argument is on par with avocado toast.

Vancouver is a city left behind times, and by the sounds of it, you love it that way, which is great for an older person. Younger people wanna move on with the times. Baby boomers are the ones in charge and the main reason behind everything happening now, period. Millenials will get their say in 30-40 years, after boomers pass away and genX geriatrics will become too old to run the world.
Your synopsis reminds me of a recent survey that showed 83% of millennials prefer a detached home to other forms of housing. There seems to be something inconsistent with their behaviours and their preferences.
Deal Guru
Jan 27, 2006
13213 posts
6235 upvotes
Vancouver, BC
choclover wrote: Vancouver west side certainly inflated more and faster than most other neighbourhoods so I expect that there is more room to correct on the way down in the same location.

Funny thing is, the annual median household income in Vancouver is something like $64k. If housing affordability is expressed as ratio of 7x median household income, house prices need to drop a substantial amount for locals to be able to afford to buy.
The funny thing is I remember having heated discussions with people on this very thread about how $64k does actually support the local housing market just a few short years ago when prices were substantially higher.
Deal Guru
Jan 27, 2006
13213 posts
6235 upvotes
Vancouver, BC
choclover wrote: Your synopsis reminds me of a recent survey that showed 83% of millennials prefer a detached home to other forms of housing. There seems to be something inconsistent with their behaviours and their preferences.
Regardless of generation or times, the question always boils down to is what they can afford....
Deal Expert
User avatar
Feb 9, 2003
18270 posts
2721 upvotes
Langley
Also, 83% of Millenials prefer Ferrari, yet many of them are driving Corollas. So there's something inconsistent with their behaviours and their preferences.
Jr. Member
User avatar
Oct 25, 2018
116 posts
123 upvotes
Kelowna
83% of millennials prefer smashed avocado toast, yet many of them... no wait. Never mind...
Deal Fanatic
Oct 7, 2007
6668 posts
2964 upvotes
choclover wrote: Your synopsis reminds me of a recent survey that showed 83% of millennials prefer a detached home to other forms of housing. There seems to be something inconsistent with their behaviours and their preferences.
Referencing my earlier post, the thing I find extremely ironic about this is how the City of Vancouver staff reports have pushed (and continue to push) so heavily for condos in the city citing that this is the "future" and that the "time of the single family house" is old school. I have sat through countless meetings where I have heard staff make these arguments when they are really a matter of personal opinion using heavily biased surveys on a certain segment of the population. If 83% of the millennials prefer detached and the City thinks its job is to serve the needs of the same population (by building more condos), then maybe we should stop tearing down the existing housing stock that still remains before we have none left. The scarcer houses become, the more costly they will be all other things remaining equal.
Deal Guru
Jan 27, 2006
13213 posts
6235 upvotes
Vancouver, BC
choclover wrote: Referencing my earlier post, the thing I find extremely ironic about this is how the City of Vancouver staff reports have pushed (and continue to push) so heavily for condos in the city citing that this is the "future" and that the "time of the single family house" is old school. I have sat through countless meetings where I have heard staff make these arguments when they are really a matter of personal opinion using heavily biased surveys on a certain segment of the population. If 83% of the millennials prefer detached and the City thinks its job is to serve the needs of the same population (by building more condos), then maybe we should stop tearing down the existing housing stock that still remains before we have none left. The scarcer houses become, the more costly they will be all other things remaining equal.
You have to remember that Vancouver basically voted back in the previous administration under the old name (and calling themselves independents) so of course, they are running with the previous game plan.
Deal Expert
User avatar
Nov 15, 2004
18336 posts
3240 upvotes
Toronto
choclover wrote: Referencing my earlier post, the thing I find extremely ironic about this is how the City of Vancouver staff reports have pushed (and continue to push) so heavily for condos in the city citing that this is the "future" and that the "time of the single family house" is old school. I have sat through countless meetings where I have heard staff make these arguments when they are really a matter of personal opinion using heavily biased surveys on a certain segment of the population. If 83% of the millennials prefer detached and the City thinks its job is to serve the needs of the same population (by building more condos), then maybe we should stop tearing down the existing housing stock that still remains before we have none left. The scarcer houses become, the more costly they will be all other things remaining equal.
Or maybe the city should plan on being a dense city and focus on building transit and density while leaving it to the surrounding cities to build houses. Vancouver is part of one of the largest countries on earth, not an isolated city-state. Single-family detached homes don't belong there any more than they belong in Manhattan.
Deal Addict
Apr 10, 2011
1571 posts
989 upvotes
Vancouver
Realtors will tell you it's a great buying opportunity. Let them use their money then.

The slide is only beginning.

CMHC: Metro Vancouver housing sector still ‘highly vulnerable to risks’ even in slowdown

February 7, 2019

Despite home prices falling, CMHC’s quarterly report continues to find strong evidence of real estate overvaluation.

Despite the market slowdown, Metro Vancouver’s housing market is still showing a “high degree of vulnerability” to key risk factors, according to the latest quarterly report released February 7 by Canada Mortgage and Housing Corporation (CMHC).

https://www.vancourier.com/real-estate/ ... 1.23626673
Last edited by RxMills on Feb 8th, 2019 7:32 pm, edited 1 time in total.
Deal Addict
Dec 27, 2006
1958 posts
933 upvotes
https://www.theglobeandmail.com/opinion ... /#comments

The high price of Chinese money laundering in Canada
Published 11 hours ago
Arthur Cockfield is professor at Queen’s University faculty of law and a frequent contributor to the Macdonald-Laurier Institute

Canada-China political relations continue their downward spiral following the arrest of Huawei executive Meng Wanzhou in Vancouver, with ongoing retaliatory actions and threats by the Chinese government. As a result, Canadians are increasingly asking themselves what sort of government they are dealing with.

A glimpse into Chinese money laundering helps us understand the struggles within an authoritarian state awash with cash, and how it dumps some of its problems on countries like Canada.

Story continues below advertisement

International money laundering, which is a criminal offence in Canada and China, occurs when individuals “clean up” or launder proceeds from crime by investing in foreign assets so that the dirty monies enter the conventional financial system. More broadly, international money laundering also takes place when a person transfers legally earned money across a border without disclosure to their home government.

What do we know about Chinese money laundering?

First, this money laundering occurs on a massive scale. According to The New York Times, US$1 trillion recently left China in an 18-month time period around 2015-16. Most of this money comes from wealthy Chinese individuals who secretly store away their legally earned money overseas. What began as a trickle 20 years ago has now become a tidal wave of capital outflows with stories of middle-class Chinese now opening bank accounts in Canada and the United States. In part, the amount of money moving offshore can be tied to the incredible economic growth that has raised Chinese household incomes for thirty years.

Individuals who move their monies offshore fear that China’s economy could tank or the yuan may be devalued against overseas currencies, wiping away most of their savings. Or worse, the Chinese government may unfairly take their money if these individuals fall into disfavour or under the whims of some corrupt official. People from all over the illiberal world engage in similar capital flight activities to protect themselves or their families – although on a lesser scale compared to these unprecedented flows coming out of China.

Second, Chinese money laundering is suspected to go all the way to the top of the power echelons of the Chinese Communist Party. In a 2014 report by the International Consortium for Investigative Journalists, a data leak from a Singaporean offshore financial service provider revealed a little fewer than 22,000 secret offshore accounts held by Chinese citizens (I was a legal consultant working on this leak).

Many of the individuals identified within this leak were family members of the rulers of the CCP, including the tiny group of seven men within the Politburo Standing Committee who run China. For instance, the data leaks showed that Chinese President Xi Jinping’s son-in-law Deng Jiagui maintained companies based in secretive tax havens (although the usage of such companies may have been legal).

Finally, Chinese money laundering is tied to Canada’s number one public health crisis, namely the nearly 4,000 fentanyl overdose deaths per year. According to Canadian law enforcement, most of this fentanyl – including the deadly tainted version of the drug – is manufactured by and shipped from China-based factories through online sales to Canadian drug users and traffickers.

Story continues below advertisement

To launder these illegal sales within British Columbia, organized crime linked to China cleaned up $1-billion in 2016 alone; they did so by buying Vancouver real estate. An additional $1.7-billion was laundered between 2013 and 2017 by pumping money into casino earnings. These Vancouver mobsters make and move so much dirty money they make Tony Soprano look like a two-bit crook.

Senator Vernon White, a former police officer, has called for punitive trade sanctions against China until their government acts to stem the production and sale of fentanyl from state-regulated factories.

Chinese money laundering paints a troublesome picture of a country where citizens often do not trust their government and where organized crime benefits from cleaning up illicit proceeds from a drug that is killing thousands of Canadians. It is very much in keeping with the unflattering portrait that the CCP has now shown the world following Ms. Meng’s arrest, which should remind Canadians of the true face of this rising power.
Deal Guru
Jan 27, 2006
13213 posts
6235 upvotes
Vancouver, BC
Piro21 wrote: Or maybe the city should plan on being a dense city and focus on building transit and density while leaving it to the surrounding cities to build houses. Vancouver is part of one of the largest countries on earth, not an isolated city-state. Single-family detached homes don't belong there any more than they belong in Manhattan.
To compare Manhattan to Vancouver is a poor one as NYC is at least 100 years ahead of Vancouver when it comes to development, infrastructure, population and status. In addition, NYC is located in one of the most densely populated corridors in the world (ie from Boston to Washington, DC). The closest 'largish' city to Vancouver is Seattle and there's no comparison between Seattle and the large metros on the East Coast.

Manhattan has 28,000 people per square km while Vancouver only has 5,500 with about twice the amount of land. Vancouver has no-where near the space pressures as Manhattan has. Thinking that single-family homes don't belong in Vancouver is laughable when you actually look at the facts.
Penalty Box
Dec 30, 2012
1097 posts
1143 upvotes
Toronto
craftsman wrote: To compare Manhattan to Vancouver is a poor one as NYC is at least 100 years ahead of Vancouver when it comes to development, infrastructure, population and status. In addition, NYC is located in one of the most densely populated corridors in the world (ie from Boston to Washington, DC). The closest 'largish' city to Vancouver is Seattle and there's no comparison between Seattle and the large metros on the East Coast.

Manhattan has 28,000 people per square km while Vancouver only has 5,500 with about twice the amount of land. Vancouver has no-where near the space pressures as Manhattan has. Thinking that single-family homes don't belong in Vancouver is laughable when you actually look at the facts.
Perhaps zoning parts of inner Vancouver like Manhattan would solve its housing woes? As you said, lots of room to drastically increase density but the selfish Boomer owners will NIMBY any densification plans. If I’m not mistaken, Vancouver has some of the most restrictive zoning rules in North America.
Deal Guru
Jan 27, 2006
13213 posts
6235 upvotes
Vancouver, BC
Motoss wrote: https://www.theglobeandmail.com/opinion ... /#comments

The high price of Chinese money laundering in Canada
Published 11 hours ago
Arthur Cockfield is professor at Queen’s University faculty of law and a frequent contributor to the Macdonald-Laurier Institute

Canada-China political relations continue their downward spiral following the arrest of Huawei executive Meng Wanzhou in Vancouver, with ongoing retaliatory actions and threats by the Chinese government. As a result, Canadians are increasingly asking themselves what sort of government they are dealing with.

A glimpse into Chinese money laundering helps us understand the struggles within an authoritarian state awash with cash, and how it dumps some of its problems on countries like Canada.

Story continues below advertisement

International money laundering, which is a criminal offence in Canada and China, occurs when individuals “clean up” or launder proceeds from crime by investing in foreign assets so that the dirty monies enter the conventional financial system. More broadly, international money laundering also takes place when a person transfers legally earned money across a border without disclosure to their home government.

What do we know about Chinese money laundering?

First, this money laundering occurs on a massive scale. According to The New York Times, US$1 trillion recently left China in an 18-month time period around 2015-16. Most of this money comes from wealthy Chinese individuals who secretly store away their legally earned money overseas. What began as a trickle 20 years ago has now become a tidal wave of capital outflows with stories of middle-class Chinese now opening bank accounts in Canada and the United States. In part, the amount of money moving offshore can be tied to the incredible economic growth that has raised Chinese household incomes for thirty years.

Individuals who move their monies offshore fear that China’s economy could tank or the yuan may be devalued against overseas currencies, wiping away most of their savings. Or worse, the Chinese government may unfairly take their money if these individuals fall into disfavour or under the whims of some corrupt official. People from all over the illiberal world engage in similar capital flight activities to protect themselves or their families – although on a lesser scale compared to these unprecedented flows coming out of China.

Second, Chinese money laundering is suspected to go all the way to the top of the power echelons of the Chinese Communist Party. In a 2014 report by the International Consortium for Investigative Journalists, a data leak from a Singaporean offshore financial service provider revealed a little fewer than 22,000 secret offshore accounts held by Chinese citizens (I was a legal consultant working on this leak).

Many of the individuals identified within this leak were family members of the rulers of the CCP, including the tiny group of seven men within the Politburo Standing Committee who run China. For instance, the data leaks showed that Chinese President Xi Jinping’s son-in-law Deng Jiagui maintained companies based in secretive tax havens (although the usage of such companies may have been legal).

Finally, Chinese money laundering is tied to Canada’s number one public health crisis, namely the nearly 4,000 fentanyl overdose deaths per year. According to Canadian law enforcement, most of this fentanyl – including the deadly tainted version of the drug – is manufactured by and shipped from China-based factories through online sales to Canadian drug users and traffickers.

Story continues below advertisement

To launder these illegal sales within British Columbia, organized crime linked to China cleaned up $1-billion in 2016 alone; they did so by buying Vancouver real estate. An additional $1.7-billion was laundered between 2013 and 2017 by pumping money into casino earnings. These Vancouver mobsters make and move so much dirty money they make Tony Soprano look like a two-bit crook.

Senator Vernon White, a former police officer, has called for punitive trade sanctions against China until their government acts to stem the production and sale of fentanyl from state-regulated factories.

Chinese money laundering paints a troublesome picture of a country where citizens often do not trust their government and where organized crime benefits from cleaning up illicit proceeds from a drug that is killing thousands of Canadians. It is very much in keeping with the unflattering portrait that the CCP has now shown the world following Ms. Meng’s arrest, which should remind Canadians of the true face of this rising power.
As much as I hate illegal money flows, the opinion express above has a few points that need better clarity and discussion...

1. While the initial definition of international money laundering I agree with, how the author then 'simplified' it by stating "international money laundering also takes place when a person transfers legally earned money across a border without disclosure to their home government" is simply not true. Not all home governments require disclosure and even the ones who do require disclosure, many of those home governments don't deem it as a crime. Funds travel across international borders all of the time without the requirement for disclosure.

2. The vast majority of the funds the author claims in laundered is in fact legal funds - he even says it himself by stating "Most of this money comes from wealthy Chinese individuals who secretly store away their legally earned money overseas." The fact that he calls it laudered money gives it an ugly tint that is just wrong. Yes, the volume of money is troublesome but it's not criminal money.

3. The author makes it sound like China is the only source of this problem but Russia was the problem before China was... just ask the UK and Europe what happened in the years following the collapse of the USSR and the rise of the oligarches as they moved their money out of Russia for much of the same reasons that the Chinese are doing now.

4. Nothing new about linking many of the outflows to senior Communist party officials as this happens every time there's a change at the top of the government as the new government tends to go after the old government on corruption charges in order to solidify their hold on power. What the author doesn't mention is that many of the enterprises also have direct links to the Chinese military.

The author can't paint all the money inflows with a broad brush and say everything is money laundering when it's not as it's just simplifying the issue too much. We need to delineate that there is truly laundered money that fits that definition based on the proceeds of crime or criminal activities (ie mob/gang money), legal funds that move here for safe keeping, and legal funds that move here for investment and speculation. They should not be lumped into the same bucket and treated the same way.
Deal Guru
Jan 27, 2006
13213 posts
6235 upvotes
Vancouver, BC
civiclease wrote: Perhaps zoning parts of inner Vancouver like Manhattan would solve its housing woes? As you said, lots of room to drastically increase density but the selfish Boomer owners will NIMBY any densification plans. If I’m not mistaken, Vancouver has some of the most restrictive zoning rules in North America.
A proper and clear city plan will go a long way... but the previous administration, while having restrictive zoning rules, allowed developers to buy themselves exceptions to the rules... At the same time, they added more rules but still allowed development to basically move ahead as long as extra funds were available to them. If those funds weren't, those developments faced strong objections from the city and many of them were forced out of business. To make things worse, the city didn't have firm rules on how to buy those exceptions as many developers claimed that the city kept changing their demands.
Deal Addict
Apr 10, 2011
1571 posts
989 upvotes
Vancouver
More and more listings, fewer and fewer buyers. Early price adjustments downward. The next 3 months will be very interesting.

"Metro Vancouver real estate remains a buyer’s market as inventory jumps, prices slide"

Metro Vancouver’s home sellers took the opportunity of the New Year to list their properties, with new listings in the region up 244.6% month over month, and nearly 28% higher than the same month last year.

https://biv.com/article/2019/02/metro-v ... ices-slide

Top

Thread Information

There is currently 1 user viewing this thread. (0 members and 1 guest)