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

[Dazzle]

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.

 

There's lots of buyers from the outside because Vancouver is one of the most ideal places to live. San Francisco is similarly labelled as the same thing - and the houses within the city are extremely expensive. That being said, there are a lot of (poorer) suburbs in California, so it's not a perfect comparison.

The fact that there's a strong Chinese population in Vancouver is a strong reason for why they pick here. They could've picked Victoria, which has similar type weather, but they choose Vancouver. They have the money to buy it and they go there.

If there are a lot of 'off-shore buyers', it makes zero sense for them to leave the place and not rent it out. So this talk about 'greed' is a bit misplaced.

A lot of people of all ethnicities (with money) are buying properties in Vancouver (and surrounding suburbs). That's what's driving the prices. There's hardly any Chinese people in places like Coquitlam. The houses there are extremely inflated.

 

I don't agree or like the current Mayor of Vancouver with all his policies but to say that Vancouver housing prices are because of foreign (Chinese) ownership is overly simplistic at best - and racist at worst.

 

 

[Warhippy]

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.

 

 

Yuppers.

Students and Homemakers buying on average homes valuing$2.38 MILLION

 

Check that against the values or purchasing of people labelling their occupation as docotr, lawyer etc and it's ridiculous

[taxi]

There's lots of buyers from the outside because Vancouver is one of the most ideal places to live. San Francisco is similarly labelled as the same thing - and the houses within the city are extremely expensive. That being said, there are a lot of (poorer) suburbs in California, so it's not a perfect comparison.

The fact that there's a strong Chinese population in Vancouver is a strong reason for why they pick here. They could've picked Victoria, which has similar type weather, but they choose Vancouver. They have the money to buy it and they go there.

If there are a lot of 'off-shore buyers', it makes zero sense for them to leave the place and not rent it out. So this talk about 'greed' is a bit misplaced.

A lot of people of all ethnicities (with money) are buying properties in Vancouver (and surrounding suburbs). That's what's driving the prices. There's hardly any Chinese people in places like Coquitlam. The houses there are extremely inflated.

 

I don't agree or like the current Mayor of Vancouver with all his policies but to say that Vancouver housing prices are because of foreign (Chinese) ownership is overly simplistic at best - and racist at worst.

 

 

Vancouver will always be expensive because people want to live here. The other extreme would be a place like Detroit, where no one wants to live. However, that doesn't change the fact that their are definitely a large group of foreign investors that are investing purely for profit, and residents are being priced out. There's a difference between a place being expensive and totally unaffordable to the resident population that lives and works there.

The investors are playing by different economic rules, so saying residents should just compete with them is absurd. The simple fact is that Vancouver (and Canada in general) is one of the few places that has no restriction on non-resident investment. This is a major driving force for why they have picked Vancouver and Toronto to target with their investments.

[taxi]

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

Actually, scratch that.  It's nationalist.

There's nothing nationalist or racist about protecting the economy from non-resident buyers. Every country in the world does it. What would happen to a Canadian resident who claimed to be a house-wife or student yet bought a 3 million dollar home? The CRA would be tripping over themselves to audit that person and slap them with imputed income taxes. 

You've also got a situation where non-residents are taking advantage of lax environmental and labour laws abroad and illegally smuggling money out of their countries of origin. Canada, due to its non-existent regulations, is a target for these criminals and tax cheats.

[Gstank29]

IMO opinion forgein investors should have to pay a luxury tax of 25-35% and be forced to live in the country for at least 2 months out of the year. It won't completely solve the problem but it will definitely make the "lower class" of the foreign investor think twice about driving up the real estate prices.

There was a house in my neighbourhood that was listed for 600k and it  sold for 800k to a foreign couple. This is just one of the many examples of what is happening in Vancouver.

[AV's Coin]

There's nothing nationalist or racist about protecting the economy from non-resident buyers. Every country in the world does it. What would happen to a Canadian resident who claimed to be a house-wife or student yet bought a 3 million dollar home? The CRA would be tripping over themselves to audit that person and slap them with imputed income taxes. 

I thought I read an article where  China implemented restrictions on real estate speculation within their own country - for example limiting the number of investment condos a person or family can own to one. As a result they started parking their money in other countries.

 

[DeNiro]

It has nothing to do with race. If investors from Ireland were coming here and doing the same thing it would be a problem.

Claiming racism to try and deter people from joining the conversation is a low ball greasy tactic. But why should we expect anything less from a politician?

[GLASSJAW]

There's lots of buyers from the outside because Vancouver is one of the most ideal places to live. San Francisco is similarly labelled as the same thing - and the houses within the city are extremely expensive. That being said, there are a lot of (poorer) suburbs in California, so it's not a perfect comparison.

 

I don't get this SF comparison? SF is expensive BECAUSE OF the local economy, not despite it. the city is flooded with local money and businesses. people move there to work.

 

edit: I guess the argument would be that the major industries are relatively new and have pushed out most locals in exchange for new workers, but still. at least people born in or around SF have options. 

[Warhippy]

I don't get this SF comparison? SF is expensive BECAUSE OF the local economy, not despite it. the city is flooded with local money and businesses. people move there to work.

 

edit: I guess the argument would be that the major industries are relatively new and have pushed out most locals in exchange for new workers, but still. at least people born in or around SF have options. 

Indeed they do.  Petaluma, Cotati, Santa Rosa, Sausalito all are within 20 minutes driving of Golden Gate traffic depending as well as Oakland right across the bridge.  When I lived there the issues were prevalent and similar but it was not a truly privilege or poverty based one such as we see here from those who can buy homes vs those who can't.

Oakland alone provides quality places to live, regardless of the perceived issues with it; for literally tens of if not hundreds of thousands.  Hot to mention the homes around the industrial park

San Francisco has a local economy that can and does support the working class, where as we see in vancouver the working class is being pushed further and further out of the metro and now surrounding areas.

 

I loved living in San Francisco and the areas and I as well do not get the comparison as while the issues are similar.  They are also so vastly different as to be head scratching.

 

[-DLC-]

Richmond is the absolute worst for how the city is being absolutely raped of anything resembling family dwellings and is becoming a haven for residential hotels and palaces. 

 

Terra Nova:  houses average about $3M there yet the average reported income is similar to the DTES.  Many also collect low income subsidies, while driving luxury cars.  Our tax dollars pay for that, yet some of us are struggling to make ends meet...surely you can see how that leads to a bit of tension and resentment.  It isn't about race, that's just a common denominator and it just happens that the money is all coming from the same destination.  It has everything to do with opportunistic visions and goals that may come on the back of others.  That's never a good thing...greed is the root of all evil.  Believe it.

 

It is a problem...it's not racist to make observations or look at numbers to see why sudden changes are taking place.  And they are.

 

Perfectly good homes are being snapped up in bidding wars a day after they go on the market....NOT to live in (it would be racist if people simply had issues with new neighbours who were from a foreign country...that's not what is happening though).  The problem is developers tear down the existing home, build a mega home and dump it.  Money is dumped in and no one ever actually lives there.  No contribution to the local economy, no sense of community.  This is something to complain about, as it deteriorates the quality of living for those who DO choose to make it home.  Look at Coal Harbour and the empty neighbourhood dilemma that is becoming all too common as it spreads out.

 

No racism...except, perhaps, for wealthy people who have no time of day for the lowly commoners here.  That IS happening and more likely to be the case.  It's sad, really. 

 

It's not about "hating on" people because of their race...it's mostly having wealth step all over the middle class and poor.   As human beings, we should be care about one another and take care of the less fortunate or, at the very least, not exploit situations that kick them into a hole.

 

Mayor Moonbeam's but one more politician who does what is good for .... him.  I've said it before and stand firm...the racism card is thrown out inappropriately by people with no legitimate response in avoidance of issues.  An attempt to stop discussions in their tracks...but people are wise to it.  It isn't racism to discuss issues involving people from various walks of life...how else can you break through barriers?  If you refuse to listen?

The great leaders listen to the voices of the people they represent and try to protect their interests (too).  Not many of those left...they're being bought and sold at a dime a dozen.

 

Australia is actually a better comparison to here...exactly what is happening there.

[Electro Rock]

The Vancouver metro has an annual GDP of about $110 billion USD, which sounds impressive at first glance, but doesn't not compare well at all...

We have the likes of Edmonton ($90B USD) and Calgary ($98B) coming fairly close despite having less than half the population.

Random U.S. cities like Portland Oregon, itself hardly an economic powerhouse, stomp it out at $160B, and that's with a somewhat smaller population.

Basically its an economic cripple, yet it has the cost of living of cities that are economic powerhouses.

[Lancaster]

Vancouver is a B-level city commanding AAA+ city prices.  It's weird hearing from my friends residing in Waseda in Tokyo.... a very international friendly, top-tiered university district... and the prices are the same as in False Creek or the Westend.  Heck, I can rent a 3 bedroom apartment just blocks from Osaka Castle (in Osaka of course) for about $1200.  When you think of the priciest cities in the world..... Hong Kong, London, New York, Tokyo, Vancouver..... one isn't like the other. 

My wife takes those LINC classes, English and transitional classes for immigrants.  She always hear from her friends (from Mainland China), how they just recently purchased homes in the Westside and buying a Porsche Cayenne outright with cash.  A little BMW for her son that just turned 16.  Built an entire home theater in the basement with leather theater seats, with projectors and all... for her adolescent daughter so she can watch Frozen whenever she wanted.  The rest of the family normally watches TV in the living room.  I believe her husband resides back in China..... yeah....

[etsen3]

There's lots of buyers from the outside because Vancouver is one of the most ideal places to live. San Francisco is similarly labelled as the same thing - and the houses within the city are extremely expensive. That being said, there are a lot of (poorer) suburbs in California, so it's not a perfect comparison.

The fact that there's a strong Chinese population in Vancouver is a strong reason for why they pick here. They could've picked Victoria, which has similar type weather, but they choose Vancouver. They have the money to buy it and they go there.

If there are a lot of 'off-shore buyers', it makes zero sense for them to leave the place and not rent it out. So this talk about 'greed' is a bit misplaced.

A lot of people of all ethnicities (with money) are buying properties in Vancouver (and surrounding suburbs). That's what's driving the prices. There's hardly any Chinese people in places like Coquitlam. The houses there are extremely inflated.

 

I don't agree or like the current Mayor of Vancouver with all his policies but to say that Vancouver housing prices are because of foreign (Chinese) ownership is overly simplistic at best - and racist at worst.

 

 

To be fair though, Coquitlam doesn't exist in a vacuum.  Housing prices there are affected by the cities in the general region.

 

Anyways, I agree that it is awfully assumptive to make a study like this based purely on Chinese names, and definitely a slippery slope to racism if it's not racist already.  If they wanna explore the possibility of foreign ownership driving up house prices, a proper study is required, one based on real information, not ethnicity.

 

[etsen3]

It has nothing to do with race. If investors from Ireland were coming here and doing the same thing it would be a problem.

Claiming racism to try and deter people from joining the conversation is a low ball greasy tactic. But why should we expect anything less from a politician?

Well if there were investors from Ireland we wouldn't know about them, since this study specifically targets the Chinese.  That's what he seems to have a problem with.

In fact, we do have a lot of local investment and investment from places other than China, but no one complains about that.

If this were a proper study with real data on income and sources thereof (independent of ethnicity), I doubt there would be a problem.  Even the part of the study where it says that "student" and "homemaker" are common occupations is more indicative of foreign investment than ethnicity, but that's not what I saw splashed all over the headlines yesterday.  Basing a "study" on "Chinese-sounding names" is horribly unscientific at best and racist at worst.

Gregor Robertson was the one that proposed a foreign investment tax, so he knows there's a problem.  However he is right to question the methodology of this study.

[Warhippy]

Well if there were investors from Ireland we wouldn't know about them, since this study specifically targets the Chinese.  That's what he seems to have a problem with.

In fact, we do have a lot of local investment and investment from places other than China, but no one complains about that.

If this were a proper study with real data on income and sources thereof (independent of ethnicity), I doubt there would be a problem.  Even the part of the study where it says that "student" and "homemaker" are common occupations is more indicative of foreign investment than ethnicity, but that's not what I saw splashed all over the headlines yesterday.  Basing a "study" on "Chinese-sounding names" is horribly unscientific at best and racist at worst.

Gregor Robertson was the one that proposed a foreign investment tax, so he knows there's a problem.  However he is right to question the methodology of this study.

While he IS right to question the way this study was produced.

 

He is also wrong to not question the verifiable facts.  Home purchases above market value with little oversight for homes over $1 million are being commanded by Asian investors.  These investors are using titles such as student, homemaker as their occupation.  Multiple law enforcement bodies in the world are sounding the alarm about money laundering occurring as groups use safe home purchases to secure legal money.  Banks in Canada are relaxing or eliminating caps on mortgages and now requiring NO local credit history at all, thus fueling even more concern about laundering, but also seriously putting their own solvency at risk as there is NO legal precedent now to successfully sue or recover money from anyone in China thanks to the FIPA.  This also means that should banks be on the hooks for millions of dollars in mortgages that we tax payers have to cover the losses.

 

It also in no way absolves him of the knowledge his developer buddies or his good friends at the BCREA willingly market homes in China up to 3 months at higher than asking price values; before they market in Canada at the approved or standard value of the home; thus yet again driving values through the roof.

 

Mayor Moonbeam is in no way innocent and is in fact part of the issue by using lip service to appease the masses yet acting arbitrarily to what he says.

 

Asian investors are a part of the driving up of home prices in large areas of vancouver, all reports are pointing to just that.  This isn't racism; it is factual.  And by extension the numbers which will come out next year some believe will show after it is all said and done that in order it will show

 

Asian

Midle Eastern

Indian

 

Are driving the luxury home sales on the coast.

 

Again not opinion, most of it is factual in these reports.  Claiming racism is simply a great deflecting tool in the same manner pointing the finger at the Hijab/Niqab is a great deflection tool.  It simply makes people look away from the greater issue.

 

That a city with a mid level economy is seeing homes selling for world class prices and watching the working class and generational vancouverites pushed out.

[Electro Rock]

I wouldn't even call Vancouver's economy mid level, per capita its in the same class as cities that are considered poor like Winnipeg and Montreal.

Its actually been a relatively poor city since at least the '50s when key industries like logging and mining started fading away, but at least up until the late '80s, early '90s, its cost of living was in line with its economy.

I believe that sometime back in the late 70s, early '80, when Expo 86 was being considered, the local elite decided to make a "deal with the devil" to revitalize the economy in the aftermath by inviting not only massive foreign real estate investment, but any kind of shady money period.

And so, Vancouver today may not be an economic powerhouse in the usual sense, but its certainly a global hub for money laundering, drug and human trafficking, prostitution, counterfeit goods, you name it.

[D-Money]

Affordable housing is definitely a problem, and they probably should have more restrictions/tax/etc. However, in the end, it comes down to where people want to live/buy/etc.

There is something each and every individual can do about it at any time - check out. Move somewhere else. Remove yourself from the demand. In the long run, you can make it so much easier on yourself.

My wife and I left the heart of Kitsilano 7 years ago and bought a house in Calgary in the inner-city. Financially, life is soooo much easier. My wife and I both work part time, so we can split taking care of our young kids. I'm 10 minutes from work downtown, and can even walk home. We have a yard. We rent our basement out for a reasonable price, and it covers most of our mortgage. Many aspects of Vancouver life are great, but it's just not worth the cost right now.

Not only that, but this is all supply and demand. If enough people just said forget it, the demand goes down, and suddenly a lot of the investment lure would be gone.

[taxi]

Affordable housing is definitely a problem, and they probably should have more restrictions/tax/etc. However, in the end, it comes down to where people want to live/buy/etc.

There is something each and every individual can do about it at any time - check out. Move somewhere else. Remove yourself from the demand. In the long run, you can make it so much easier on yourself.

My wife and I left the heart of Kitsilano 7 years ago and bought a house in Calgary in the inner-city. Financially, life is soooo much easier. My wife and I both work part time, so we can split taking care of our young kids. I'm 10 minutes from work downtown, and can even walk home. We have a yard. We rent our basement out for a reasonable price, and it covers most of our mortgage. Many aspects of Vancouver life are great, but it's just not worth the cost right now.

Not only that, but this is all supply and demand. If enough people just said forget it, the demand goes down, and suddenly a lot of the investment lure would be gone.

It's not just about where people want to live. That's the issue. Currently, it's about where foreign investors want to store their illegally gotten money at the expense of people living in Vancouver. Canada, unlike other jurisdictions, is not putting up barriers to prevent this.

No one is saying that Vancouver will ever be "cheap". You're right it's a desirable place to live. However, it's real estate market is currently out of control. All it will take is a recession in China to cause a huge economic disaster here. This is not where we want to be.

[taxi]

Well if there were investors from Ireland we wouldn't know about them, since this study specifically targets the Chinese.  That's what he seems to have a problem with.

In fact, we do have a lot of local investment and investment from places other than China, but no one complains about that.

If this were a proper study with real data on income and sources thereof (independent of ethnicity), I doubt there would be a problem.  Even the part of the study where it says that "student" and "homemaker" are common occupations is more indicative of foreign investment than ethnicity, but that's not what I saw splashed all over the headlines yesterday.  Basing a "study" on "Chinese-sounding names" is horribly unscientific at best and racist at worst.

Gregor Robertson was the one that proposed a foreign investment tax, so he knows there's a problem.  However he is right to question the methodology of this study.

I'd agree, there are definitely some issues with this study. However, there is also no denying where the bulk of the foreign investment is coming from.

Either way, Canada needs to put regulations and a proper taxation scheme in place immediately. These measures should be targeted at all non-residents, not just those from China.

[Electro Rock]

Let's face it, the Chinese in Vancouver aren't just another ethnic group.

Because of their numbers and political influence they've received unfair special treatment of all kinds for decades now, and the minute someone calls attention to that fact they're accused of being racist.