Mayor Says New Study that shows Vancouver Housing Market Fuelled by Chinese Buyers is Racist

[DonLever]

from CKNW:

Vancouver’s Mayor Gregor Robertson says he has some problems with the study.

“I’m very concerned with the racist tones that are implied here, and we have to get away from that. We have to deal with this as a housing challenge we have.”

As for the suggestion foreign capital is driving real estate prices up, Gregor Robertson says Vancouver is a city built by immigration.

“It’s really about making sure there is balance, and that there are tools to deal with flipping and speculation and big movement of luxury homes, where there’s an opportunity to extract some of the upside and reinvest it in the low to middle-income market.”

 

[DonLever]

The original story from Globe And Mail:

A new study that puts data behind the widely held but difficult-to-prove assumption that off-shore money is driving Vancouver’s superheated housing market has concluded the vast majority of houses on the city’s affluent west side have been bought by new immigrants from China, many of whom don’t earn their living here.

 

The data were obtained by David Eby, the NDP MLA for Vancouver-Point Grey. He turned the data over to Andy Yan, a University of British Columbia adjunct planning professor and analyst. The resulting study looks at transactions in three neighbourhoods on Vancouver’s west side from August, 2014, to February, 2015. It amounts to 172 sales in total, priced upward of $1.25-million. Mr. Yan screened for non-anglicized Chinese names, a methodology used previously by academics in an effort to separate out names that would likely belong to recent immigrants.

The study found that two-thirds of all sales of detached houses in the University Endowment Lands, Dunbar and Point Grey neighbourhoods were purchased by buyers with non-anglicized Chinese names. That group purchased 88 per cent of houses priced at more than $5-million.

But further, the study found that on titles held by a single owner, the most common occupation was homemaker – 52 properties; 18 per cent were business people and 6 per cent of owners were students.

And 82 per cent purchased with a mortgage.

Mr. Yan acknowledged he could only deduce that buyers were purchasing with money from mainland China. But, he argued, it’s not much of a leap, considering the median income for 25- to 55-year-olds with bachelor degrees in Vancouver is $41,981. Those dependent on the local job market couldn’t compete.

“Unless somebody tells me that it’s suddenly possible to make a ton of money selling cellphones at Parker Place Mall in Richmond, this situation is problematic for locals,” Mr. Yan said.

Mr. Eby said their data are important because they support mounting evidence that foreign money has priced local incomes out of the market.

“We can soon safely say we have a sense of what is happening,” he said.

Any attempt at a solution to Vancouver’s housing crisis has long been stymied by complaints that there is a lack of data to prove that foreign capital is having any real impact on the market.

Premier Christy Clark has said there is no evidence that wealthy foreign buyers are driving unaffordability and therefore no reason to introduce measures such as a luxury tax.

Mr. Eby noted other MLAs could also collect data to determine whether the pattern repeats itself throughout the region.

“Constituents were telling me there were a lot of houses being bought and sold in their neighbourhood, and they didn’t even see the neighbours move into a house before it was sold again,” Mr. Eby said. “So it makes sense to me now that we have the data, to see this astronaut family phenomenon of mom and kids being brought over from mainland China.

“The kid goes to school and dad is at home in China working and supporting the family. Mom is only there with kids for the school year, and the house would appear to be vacant for a big chunk of year.”

The data also support an extensive Globe investigation that looked at similar numbers, as well as court cases, to conclude that wealthy foreign investors were using loopholes, such as placing a house in a relative’s name, to avoid paying taxes.

The most popular lenders for the houses examined by Mr. Yan were, in order, CIBC, HSBC and Bank of Montreal. More than 80 per cent of the mortgages on the houses in the study had been given to people with non-anglicized Chinese names. As well, 19 per cent of assessments were sent to addresses other than the house’s address, suggesting that owners did not live at the houses.

David Ley, a professor of geography at UBC and author of Millionaire Migrants: Trans-Pacific Life Lines, said the impact of foreign money at the high end trickles down into every market, with local buyers scrambling outward to find property within their reach, thereby driving prices throughout the region.

A recent Sotheby’s report said the east Vancouver neighbourhood of Grandview has seen a 30-per-cent increase in average house prices in the past year. Also, there’s extensive anecdotal evidence from the real estate industry that foreign money has entered into markets such as Burnaby, West Vancouver, Coquitlam, South Surrey and Port Moody. A Landcor report exclusive to The Globe and Mail said that those areas had all seen price increases of 25 per cent to 50 per cent for single-family homes in the past five years.

The data also support previous reports about foreign ownership. In August, MacDonald Realty reported that 70 per cent of its 2014 sales of detached houses priced at more than $3-million had been sold to buyers from China.

To obtain the new data, Mr. Eby asked a real estate agent for all multiple listing service sales in the area west of Alma Street. He then asked the legislative librarian to pull land titles for all those sales. As an MLA, he has free access to land titles. Members of the public would have to pay about $15 for a digital copy of each title.

He sent the raw data to Mr. Yan, who’s also a senior planner for Bing Thom Architects and researcher for BTAworks.

“I hear stories of families who scrape and save and borrow money and then they go out to buy a home and they are dramatically outbid,” Mr. Eby said.

“And the outbidding is happening because the market is now international – it’s no longer connected to the local realities of what people can earn from a local job in Vancouver. … I don’t think we have to be that imaginative, looking at current trends and guessing where we are heading here – which is that Vancouver will functionally become a gated community.

“What an awful vision of the future of our city.”

Prof. Ley isn’t surprised by the findings, which support his long-held argument that outside wealth is skewing the Vancouver housing market.

 

[Warhippy]

Really?

 

Mayor Moonbeam with his asian "partner" and numerous contacts through developors and real estate agencies with major contacts to asian markets saying this?

 

gee...how very impartial of him.  I guess it must just be that all of those students and homemakers are affording these multi million dollar homes through all of their numerous ventures without any actual possibility of laundering, investment property portfolio issues or the like.

[Down by the River]

Live shot of Gregor at his press conference:

 

[taxi]

I think there's definitely a danger in letting this spill over into racism. Particularly the part of the study that just looked at the names of the owners.

However, I also see nothing wrong with addressing the economic threat that non-residents are causing. In fact, not only is it not racist, but we should be going after people who are illegally smuggling money from China. The biggest victims of these criminals are the Chinese themselves. They are making profit off factories filled with slaves and then avoiding taxes owed to their own Chinese countrymen. 

I'd also like to see what "balance" Roberts is talking about. Maybe he's referring to his own bank balance? Because so far he's done absolutely nothing to stop it and made large profits off his own investments.

[inane]

172 sales over 1 year in 3 neighborhoods using their last name as the identifier does not make good research.

Regardless, it's kinda rich hearing from everyone about how their neighborhoods are dying and unaffordable. Well, no one is forcing you to sell. 

[Down by the River]

I think there's definitely a danger in letting this spill over into racism. Particularly the part of the study that just looked at the names of the owners.

However, I also see nothing wrong with addressing the economic threat that non-residents are causing. In fact, not only is it not racist, but we should be going after people who are illegally smuggling money from China. The biggest victims of these criminals are the Chinese themselves. They are making profit off factories filled with slaves and then avoiding taxes owed to their own Chinese countrymen. 

I'd also like to see what "balance" Roberts is talking about. Maybe he's referring to his own bank balance? Because so far he's done absolutely nothing to stop it and made large profits off his own investments.

The method of looking at the names of the owners has been passed through numerous ethical hoops created by various university's research ethics boards. Its the idea that approaching each person for an interview is expensive and time-consuming, and so a practical but less than ideal approach is used. The study's procedures are not a result of the perpetuation of a stereotype but of the limits of large scale research in the social sciences.

[RRypien37]

Seriously debating on moving out of this city.

This is a joke.

I know all Politicians are bottom feeder scum, but this is just so messed one can only laugh. 

[Down by the River]

172 sales over 1 year in 3 neighborhoods using their last name as the identifier does not make good research.

Regardless, it's kinda rich hearing from everyone about how their neighborhoods are dying and unaffordable. Well, no one is forcing you to sell. 

When the family home you've lived in for 30+ years doubles in value, guess what happens to your property taxes? On the east coast (e.g., PEI), families that had occupied the same home for 100 years were forced to sell due to the housing market being inflated by wealthy East Coast Americans. 

Also, personal opinion alone is typically a poor way of judging the utility of a specific research design/method. I can tell you this, if dozens of studies have used that method before, there is a good chance at least one examined concurrent validity (e.g., measured both last names in phonebook to identify ethnicity, and then went to the homes of said people and got self-report information). Bottom line is you should at least qualify WHY you know that this was a poorly designed method.

[DeNiro]

172 sales over 1 year in 3 neighborhoods using their last name as the identifier does not make good research.

Regardless, it's kinda rich hearing from everyone about how their neighborhoods are dying and unaffordable. Well, no one is forcing you to sell. 

The majority of people selling are baby boomers that want to enjoy their retirement.

Why wouldn't they sell if someone is making them a great offer? If you're kids are grown up and moved out, it doesn't make much sense to keep a 2.5 million dollar house for two people.

The problem isn't the people selling, the problem is the people buying for well over market value and driving up the price. The average young family can't come close to being able to afford these houses, so they're forced to rent or live way outside the city.

There's something wrong with the fact that people nowadays are going to be much worse off than their parents. They're going to get paid less, be in more debt, and not be able to afford to live in the city that they work.

 

[JV77]

The way I look at it is, these foreign buyers are only buying what locals are selling.  The people who are currently living in the expensive areas who have had their homes in the family for years and years are sitting on a jackpot.  I bet they love what is going on in housing market, all depends on your situation.

I won't ever be able to afford a house in Vancouver, but I can't hate on someone just because they can.

[inane]

The majority of people selling are baby boomers that want to enjoy their retirement.

Why wouldn't they sell if someone is making them a great offer? If you're kids are grown up and moved out, it doesn't make much sense to keep a 2.5 million dollar house for two people.

The problem isn't the people selling, the problem is the people buying for well over market value and driving up the price. The average young family can't come close to being able to afford these houses, so they're forced to rent or live way outside the city.

There's something wrong with the fact that people nowadays are going to be much worse off than their parents. They're going to get paid less, be in more debt, and not be able to afford to live in the city that they work.

 

 The problem wouldn't exist without sellers. I'm not saying what they are doing is bad, I'd sure do it if that was me. But to then turn around and whine about housing is a bit rich.

Anyway, this problem is way bigger than just Vancouver or just the Chinese. It requires leadership from the province and good luck with that.

[inane]

Also, you want to talk affordable housing, how about unlocking the vast swaths of the west side that are just zoned for large single family? 

[Edlerberry]

wow

[taxi]

The way I look at it is, these foreign buyers are only buying what locals are selling.  The people who are currently living in the expensive areas who have had their homes in the family for years and years are sitting on a jackpot.  I bet they love what is going on in housing market, all depends on your situation.

I won't ever be able to afford a house in Vancouver, but I can't hate on someone just because they can.

Regardless of who started it and who is profiting, we can all agree that people living in Vancouver are suffering. Increased taxes and barriers on investment should be put in place to benefit those actually living and paying taxes in Vancouver. As it stands now, the average Vancouver resident is building infrastructure to support properties they can't dream of affording. Property speculation, unlike other forms of investment, adds little to the economy in the way of jobs. In fact, it's an obstacle to starting a business, as increased rents and costs of living prevent local people from starting businesses. 

[Mike Vanderhoek]

The way I look at it is, these foreign buyers are only buying what locals are selling.  The people who are currently living in the expensive areas who have had their homes in the family for years and years are sitting on a jackpot.  I bet they love what is going on in housing market, all depends on your situation.

I won't ever be able to afford a house in Vancouver, but I can't hate on someone just because they can.

That's the problem, and yes you can. Especially since foreign dollars are coming in without having to jump through the hoops that the local money is. This is a major problem and needs to be balanced and regulated. 

[DonLever]

Forget the stuff about non-Anglicized Chinese names.

What is more important is that 52% of the owners list their occupation as homemakers.  This indicates most of the new owners are offshore.

Also, the median income of a 55 year old in Vancovuer is $41,981.  That's way too low to buy a house on the west side.  Again, this indicates offshore buyers.

 

 

[butters]

 

 The problem wouldn't exist without sellers. I'm not saying what they are doing is bad, I'd sure do it if that was me. But to then turn around and whine about housing is a bit rich.

 

The ones selling are certainly not the ones doing the whining. I don't understand why people have such problems realising that a large group of people (such as the population of a city) has different people saying different things. 

[taxi]

 

The ones selling are certainly not the ones doing the whining. I don't understand why people have such problems realising taht a large group of people (such as the population of a city) has different people saying different things. 

A lot of the people selling are investors at this point too. Hence the "flipping" concerns. 

[TOMapleLaughs]

Of course it's racist.  I thought that was the point of the study.

Actually, scratch that.  It's nationalist.