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Thread: Vancouver real estate prices not the fault of foreign buyers, says new report

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    Default Vancouver real estate prices not the fault of foreign buyers, says new report

    Vancouver real estate prices not the fault of foreign buyers, says new report
    B.C. Real Estate Association says densification and geography are to blame for high home prices
    http://www.cbc.ca/news/canada/britis...port-1.3108197

    Can we not turn this thread into another Vancouver vs Edmonton debate, please?
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    Bulls--t!

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    Except that Foreign buyers almost exclusively the ones gobbling up higher priced Vancouver Real estate. Certainly the provincial economy doesn't afford such outlandish pricing.
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    They are partially correct. The problem is not foreigners. The problem is rampant speculation. Some speculators are foreign, but that is irrelevant.

    The report is thus flawed at its very inception. Tracking the number of foreigners buying homes is a completely irrelevant metric. What we should be tracking is the vacancies vs real supply, and the concentration of property.

    What you'll find is that a lot of starts sit empty, despite having a huge demand for properties. This suggests that the properties are being purchased entirely for speculative value (or perhaps land banking) rather than for use. If the vacant properties were forced onto the market (ie a limit enforced by fines for the number of vacant properties one can hold), the price would be corrected (especially for rental units).

    Again, the problem is not foreign people. I never understood why so many picked up on that red herring. The problem is a speculation bubble plain and simple.

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    Quote Originally Posted by Jaerdo View Post
    They are partially correct. The problem is not foreigners. The problem is rampant speculation. Some speculators are foreign, but that is irrelevant.

    The report is thus flawed at its very inception. Tracking the number of foreigners buying homes is a completely irrelevant metric. What we should be tracking is the vacancies vs real supply, and the concentration of property.

    What you'll find is that a lot of starts sit empty, despite having a huge demand for properties. This suggests that the properties are being purchased entirely for speculative value (or perhaps land banking) rather than for use. If the vacant properties were forced onto the market (ie a limit enforced by fines for the number of vacant properties one can hold), the price would be corrected (especially for rental units).

    Again, the problem is not foreign people. I never understood why so many picked up on that red herring. The problem is a speculation bubble plain and simple.
    I think its more than speculation.

    Its the thing that Vancouver was banking on happening since the Worlds fair and Olympics which were the transformative elements that hilited this city to the world. Speculation is an action, a result of something. The root cause of people wanting to speculate on Vancouver is how its been showcased. We have here one of the best intended civic advertising on Earth. Vancouver has been a chic vision these past couple decades and a shining light of the what many foreigners realize is the best country on Earth to live.
    Vancouver has become a sea to sky concept, a lifestyle, a promise of a certain life. Like living in an advertising brochure or the place you visit and have a dream you want to live there. That's what Vancouver represents. People who you would call speculators may in many cases just people that are safeholding retirement homes for themselves or family. With intent to live there at some point. Because that's what the Vancouver dream is about.

    So Vancouver, Canada has perfectly positioned on that. Toronto too.
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    Yeah, Vancouver's amenities are what created their market. However, the market is currently trapped in a bubble that is separated from the real demand (tenancy demand) for property. Tenancy demand has been replaced by speculative demand.

    Again, this is visible in vacant properties. People are purchasing properties as investments without any relation to the actual real demand for them.

    To correct the market and burst the bubble, we need legislation to tie prices back to the real demand for property.

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    How would you enforce penalties on vacant properties? I could see a lot of very long, drawn out "renovations" or rental ads with absurd pricing if BC were to implement something like that.

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    Quote Originally Posted by Jaerdo View Post
    Yeah, Vancouver's amenities are what created their market. However, the market is currently trapped in a bubble that is separated from the real demand (tenancy demand) for property. Tenancy demand has been replaced by speculative demand.

    Again, this is visible in vacant properties. People are purchasing properties as investments without any relation to the actual real demand for them.

    To correct the market and burst the bubble, we need legislation to tie prices back to the real demand for property.
    Only place where we disagree is in definition of whether those vacant properties represent speculation or future residential intent. I think Vancouver has marketed itself as a very good retirement destination for a lot of people who are placeholding for themselves or family and loved ones.

    Theres no real way of determining how much either speculation, or future intent to reside is part of this. A lot of people have enough money to just purchase the property, pay the taxes, and live there in 5-10 years which has proved in this market to be a better strategy than just waiting and buying at moving time.

    in the entire lower mainland and Vancouver island its nothing rare either to see early retirement migration and a sense that people are trying to beat the race over there.

    Its a dynamic that beens pretty clear I think among Canadians and Foreign buyers. The sense being buy in before its too late.
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    Quote Originally Posted by Titanium48 View Post
    How would you enforce penalties on vacant properties? I could see a lot of very long, drawn out "renovations" or rental ads with absurd pricing if BC were to implement something like that.
    I would raise property taxes on vacant properties. Insurance on vacant properties should of course be higher. Much more can go entirely wrong on any property left vacant. The insurance industry should be charging far more than they do for vacant property. But they by and large don't know about it. It should be a REQUIREMENT for owners to notify insurers and City of vacancy. And to pay duly for that. Failure to notify for instance of 2mth vacancies should result in limited or no claim coverage. It should be considered a voiding of insurable agreement.

    Not a popular view or change that snowbirds would hate but I think that's fair and reasonable. Theres a very real cost to any neighborhoods that have people vacant longterm. Lck of upkeep, no shoveled sidewalks, weeds and lawn several feet high, reducing property value for everybody else.. Owners of untended, unvisited vacant properties should be hard hit cost wise. I'm staring at one across the street right now..
    Last edited by Replacement; 11-06-2015 at 12:13 PM.
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    I wonder how much vacant or underutilized land is owned by companies such as real-estate co's, oil co's, large multinationals, investment co's and pension funds etc.?

    They should increase the taxes on vacant land because unused and underutilized land costs everyone who has to commute further, reduces available inventory, reduced tax revenue and increases costs
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    "Future residential intent" is speculation. I could care less about intent, it is irrelevant. What is important is reality.

    The legislation should allow landowners to hold one property without penalty. Any more properties held should have a requirement to be rented. "Properties shall not remain vacant for more than".. let's say 6 months to allow for renovations and sale times. Any more than that and penalties are tacked on to property taxes.

    Can't find renters? Looks like you'll have to reduce the rate your asking for.

    Trying to sell and it is sitting on the market? Try asking for less.

    Want to do renovations? Great, you'll have 6 months to do it.

    Buying a house to move in 10 years from now? Perfect, you can rent it out until then.

    This is the best way to pop the bubble. It would force housing prices down to affordable rates, as people would have to meet real demand rather than just sit on properties.

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    ^ I suppose that could work, especially if you got the public onside to snitch out vacant properties.

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    Can't entirely blame foreign buyers for house prices being so high.

    1) Low interest rates cause high house prices, due to historical inverse relationship between house prices and interest rates. Can blame weak Canadian economy for a low interest rate that is sitting at emergency low rates for several years now.

    2) Need to factor in the impacts of Bank of Mom and Dad giving substantial downpayments to their offspring, as well as encouraging their kids to purchase real estate as in their experience "house prices always go up". Might have worked for their generation, but might not for their kids
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    A lot of the solutions bring proposed here seem like a lot of unenforceable beurocracy.

    How will vacancies be monitored and who's going to do it?
    Should we institute neighbourhood snitch squads?

    What legal backing could the city have to enforce properties be occupied?
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    Quote Originally Posted by Jaerdo View Post
    "Future residential intent" is speculation. I could care less about intent, it is irrelevant. What is important is reality.

    The legislation should allow landowners to hold one property without penalty. Any more properties held should have a requirement to be rented. "Properties shall not remain vacant for more than".. let's say 6 months to allow for renovations and sale times. Any more than that and penalties are tacked on to property taxes.

    Can't find renters? Looks like you'll have to reduce the rate your asking for.

    Trying to sell and it is sitting on the market? Try asking for less.

    Want to do renovations? Great, you'll have 6 months to do it.

    Buying a house to move in 10 years from now? Perfect, you can rent it out until then.

    This is the best way to pop the bubble. It would force housing prices down to affordable rates, as people would have to meet real demand rather than just sit on properties.
    All your opinion. Pure speculation is purchase for the express purpose of selling at a greater cost. Placeholding purchace is something entirely different and buying it for yourself or family. These are different actions, different intents and with one involving intent to reside vs flip. Although would be difficult in some situations to determine which.

    But as a general rule is multiple purchase by non developers should of course be considered speculative venture. Single purchase should be considered differently as potential residence.
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    Placeholding because you speculate that prices will go up substantially more than inflation plus your holding costs so you had better get in now before it's too late is.... speculation.

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    Asking prices for the house in Vancouver area is just too much and this will hurt any ability for buyers to buy a house
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    Quote Originally Posted by highlander View Post
    Placeholding because you speculate that prices will go up substantially more than inflation plus your holding costs so you had better get in now before it's too late is.... speculation.
    Ok fair enough. I have no horse in this race, just trying to make a devils advocate distinction. I guess there is none in the sense.

    how do people feel about a moratorium on multiple purchases vs one sole purchace?

    I would think much of the inflationary damage is done by multiple speculators trying to be wannabe developers although I could be wrong.
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    An effective way of penalizing speculators who allow properties to remain vacant would help prevent artificial shortages. That should have a direct effect on rental prices, which would in turn discourage at least some would-be buyers and start to bring sale prices into line.

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    This is all a bit of a non issue really. Vancouver (or any Canadian city for that matter) doesn't even make the top 10 of expensive real estate markets worldwide.

    http://www.telegraph.co.uk/finance/p...?frame=3220486
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    With all the back lash I got saying the city/province could ban smoking in condos(and they can) to save massive fires from happening I'm surprised the idea of legislating what people must do with property they own isn't getting the same responses.

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    ^ Nobody is proposing to make it illegal to keep a property vacant, just to re-jig the property tax system so there is a financial disincentive for doing something that distorts the real estate market.

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    Default Chinese buyers make up almost 40% of transactions, 9% of population - Auckland

    Interesting "unscientific" study done in Auckland that looked at surnames of people buying properties. I wonder if same in Vancouver?

    Real-estate figures leaked to the Labour Party, which cover almost 4,000 house sales by one unidentified firm from February to April, indicate that people of Chinese descent accounted for 39.5 per cent of the transactions in the city in that period.

    Yet Census 2013 data shows ethnic Chinese who are New Zealand residents or citizens account for just 9 per cent of Auckland's population.

    http://www.nzherald.co.nz/nz/news/ar...ectid=11478719

    Last edited by moahunter; 10-07-2015 at 02:31 PM.

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    Default Vancouver real estate is a Mainland Chinese buyers' market, study says

    Wow...

    Groundbreaking study shows 70 per cent of detached homes sold in a six-month period on Vancouver's west side went to Mainland Chinese buyers; many of them housewives or students with little income.

    ...

    Yan said his findings show major migration forces are at work, and real estate in Metro Vancouver is now a global commodity.

    “I think the bigger question to be studied is what happens when the driver for your residential market is wealth, not wages? That is a major public policy issue.”
    http://www.theprovince.com/business/...289/story.html

    So, the way to get a single family home in Vancouver, is go work for the chinese government, "somehow" get your hands on millions of dollars, and launder it through your spouse...

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    Default Blame politicians for metro Vancouver real estate

    Some interesting analysis in this article:

    http://www.vancouversun.com/business..._lsa=6753-9290

    There are more than a million Chinese households with more than 2 million dollars, and six in ten of them want to leave China. The top destination - Vancouver.

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    Vancouver though is trying to stop "shadow flipping"
    http://www.cknw.com/2016/03/19/163034/

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    Default Foreign buyers crushing home owner dreams

    A bit sad when an engineer and a lawyer are priced out:

    http://www.ctvnews.ca/business/forei...tudy-1.2893140

    Sometimes I agree with NDP. You should have to prove residency, work status or citizenship to buy a house IMO, it shouldn't just be a regular speculation instrument, or eventually the .01% will own all the housing on earth. As pointed out though, too many people are making too much money for this to change, including Vancouver citizens who purchased at the right time.

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    First, people in Vancouver need to adjust to living in townhomes and condos. No one is owed a piece of land.

    Second, if we decide there is a speculation problem, we should address the action of speculation and not the people who are doing it. The problem is not that foreign people are speculating. The problem is that rampant speculation is happening. Targeting a single group of the people who are doing it misses the problem and sets a dangerous standard.
    Last edited by Jaerdo; 08-05-2016 at 09:10 AM.

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    BC gov't should ban foreign buyers from real estate for 10 yrs to cool down hot market
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    Quote Originally Posted by moahunter View Post
    A bit sad when an engineer and a lawyer are priced out:

    http://www.ctvnews.ca/business/forei...tudy-1.2893140

    Sometimes I agree with NDP. You should have to prove residency, work status or citizenship to buy a house IMO, it shouldn't just be a regular speculation instrument, or eventually the .01% will own all the housing on earth. As pointed out though, too many people are making too much money for this to change, including Vancouver citizens who purchased at the right time.
    The average sale price of a single-detached home in Metro Vancouver was $1.4 million
    That really isn't that expensive... In most cases that represents a fairly decent sized plot of land. You wouldn't get anything near that size for that money in many popular cities. Rip down the ugly sheds that pass for SFHs in North America, build something genuinely desirable on it, and in a few years time you'll be quids in.
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    Quote Originally Posted by moahunter View Post
    A bit sad when an engineer and a lawyer are priced out:

    http://www.ctvnews.ca/business/forei...tudy-1.2893140

    Sometimes I agree with NDP. You should have to prove residency, work status or citizenship to buy a house IMO, it shouldn't just be a regular speculation instrument, or eventually the .01% will own all the housing on earth. As pointed out though, too many people are making too much money for this to change, including Vancouver citizens who purchased at the right time.
    An engineer and a lawyer aren't priced out. Those two want a particular type of house and you can't be that choosy in Vancouver. There's no way they're priced out on a lawyer/engineer salary. Their combined is easily over 200k a year. They can buy a house anywhere in North Van, Burnaby and many other places (not saying it'll be the best, but they can get something). A 3 bedroom condo downtown is probably easily over 2 million, but they can find a 2 bedroom condo around 600K-1m if they insist on being in the heart of downtown, and they'll have the time of their lives living in that condo with the amazing ocean/mountain views.

    Vancouver isn't an average Canadian city. It's above average with above average house prices. I don't see the appeal of North American detached homes anyway. An inefficient gigantic wood box in constant never ending need of maintenance. A condo in the heart of downtown with ocean and mountain views is where it's at.

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    House flipping tax could curb speculative foreign money.


    http://www.cbc.ca/news/business/hous...cibc-1.3581164
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    Quote Originally Posted by Abii View Post
    Quote Originally Posted by moahunter View Post
    A bit sad when an engineer and a lawyer are priced out:

    http://www.ctvnews.ca/business/forei...tudy-1.2893140

    Sometimes I agree with NDP. You should have to prove residency, work status or citizenship to buy a house IMO, it shouldn't just be a regular speculation instrument, or eventually the .01% will own all the housing on earth. As pointed out though, too many people are making too much money for this to change, including Vancouver citizens who purchased at the right time.
    An engineer and a lawyer aren't priced out. Those two want a particular type of house and you can't be that choosy in Vancouver. There's no way they're priced out on a lawyer/engineer salary. Their combined is easily over 200k a year. They can buy a house anywhere in North Van, Burnaby and many other places (not saying it'll be the best, but they can get something). A 3 bedroom condo downtown is probably easily over 2 million, but they can find a 2 bedroom condo around 600K-1m if they insist on being in the heart of downtown, and they'll have the time of their lives living in that condo with the amazing ocean/mountain views.

    Vancouver isn't an average Canadian city. It's above average with above average house prices. I don't see the appeal of North American detached homes anyway. An inefficient gigantic wood box in constant never ending need of maintenance. A condo in the heart of downtown with ocean and mountain views is where it's at.
    If you are able to buy a home in Van, at a combined household income of 200k, that would be classified as the poor when most foreignors justt payout the entire amount of cost 5o the house.

  34. #34

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    Quote Originally Posted by ctzn-Ed View Post
    Quote Originally Posted by Abii View Post
    Quote Originally Posted by moahunter View Post
    A bit sad when an engineer and a lawyer are priced out:

    http://www.ctvnews.ca/business/forei...tudy-1.2893140

    Sometimes I agree with NDP. You should have to prove residency, work status or citizenship to buy a house IMO, it shouldn't just be a regular speculation instrument, or eventually the .01% will own all the housing on earth. As pointed out though, too many people are making too much money for this to change, including Vancouver citizens who purchased at the right time.
    An engineer and a lawyer aren't priced out. Those two want a particular type of house and you can't be that choosy in Vancouver. There's no way they're priced out on a lawyer/engineer salary. Their combined is easily over 200k a year. They can buy a house anywhere in North Van, Burnaby and many other places (not saying it'll be the best, but they can get something). A 3 bedroom condo downtown is probably easily over 2 million, but they can find a 2 bedroom condo around 600K-1m if they insist on being in the heart of downtown, and they'll have the time of their lives living in that condo with the amazing ocean/mountain views.

    Vancouver isn't an average Canadian city. It's above average with above average house prices. I don't see the appeal of North American detached homes anyway. An inefficient gigantic wood box in constant never ending need of maintenance. A condo in the heart of downtown with ocean and mountain views is where it's at.
    If you are able to buy a home in Van, at a combined household income of 200k, that would be classified as the poor when most foreignors justt payout the entire amount of cost 5o the house.
    Do you go to New York expecting to buy a house, when an apartment can be north of 100 million dollars? No you don't. You go and buy a regular condo or townhouse.

    A townhouse can be had for a reasonable price. Even if you have to get a 500k mortgage (you don't need to go this high) your monthly mortgage payment is only 2,287 dollars. If you can't pay that on a combined 200k+ income there's something wrong.

    The math:

    P=500K
    i=2.69% amortized over 25 years.
    pmt= $2,287

  35. #35

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    I bet shadow flipping by real estate agents is setting prices higher than foreign buyers.

    What you need to know about ‘shadow flipping’ in Vancouver

    By Geordon Omand The Canadian Press

    A hypothetical example:
    A real estate agent’s client reaches a deal to sell a property to an initial buyer for $1 million. The agent then takes that contract and resells it to a second buyer for $1.5 million. The agent in turn goes to a third and final buyer and sells the contract for $1.8 million.

    For each transaction the agent receives a commission. The initial seller receives $1 million minus the agent’s commission. The first buyer who bought the contract for the property for $1 million and sold it for $1.5 million pockets $500,000. The second buyer who bought the contract for $1.5 million and sold it for $1.8 million gets $300,000. The third buyer pays the land-transfer tax on the $1.8 million purchase price.

    What is the issue?

    The assignment clause allows real estate agents to sell a contract for a single property multiple times at increasingly higher prices as they make a commission on each transfer. Buyers in the middle also benefit by pocketing the difference between what they paid and the resale value. They also don’t pay any land-transfer taxes because the entire transaction happens before the deal officially closes, so the property is never technically in their possession.

    What is the end result?

    The original seller receives less than what the property ends up being worth and the last buyer may be paying an inflated price, with the difference in value going to the real estate agent and the buyers in the middle.

    http://globalnews.ca/news/2510453/wh...-in-vancouver/
    Quite often the other buyers were fellow real estate agents.
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    The solution to shadow flipping is a public "name and shame" website. Search box where you can type in the realtor's name and see if they are a con artist.

    Shadow flipping a client's home is literally ripping them off. Major ethical breach. If you could easily check if a realtor has done it, the ones who do would be run out of the business.

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    That's realtors for you.

  38. #38

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    With the 2008/09 financial crisis no one went to jail because that property / financial byproduct bubble had many players all recklessly participating in it.

    It seems that in any of our series of reoccurring bubbles ( third world debt, high tech, etc.) everyone rushes in to get a piece of the action.

  39. #39

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    That is why I sold my parents house and my past three homes myself. Used a lawyer, staged the houses and cost me about $3,000 each but sold each one for the asking price and the last one got 10% over the two professional appasials. Think of all the realtor fees I saved.


    Guys like Txxxx P deliberately sell homes at low ball prices and quickly encourage sellers to drop the price quickly so he can sell the homes fast and make more on the volume of homes he sells. Easy to be a top realtor, just sell homes cheap because it really costs them only 3 cents on the dollar. For the seller, every dollar less is their home equity.
    Last edited by Edmonton PRT; 18-05-2016 at 11:57 AM.
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    Nice use of the name Piranha. Very appropriate.

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    Quote Originally Posted by Abii View Post
    Quote Originally Posted by ctzn-Ed View Post
    Quote Originally Posted by Abii View Post
    Quote Originally Posted by moahunter View Post
    A bit sad when an engineer and a lawyer are priced out:

    http://www.ctvnews.ca/business/forei...tudy-1.2893140

    Sometimes I agree with NDP. You should have to prove residency, work status or citizenship to buy a house IMO, it shouldn't just be a regular speculation instrument, or eventually the .01% will own all the housing on earth. As pointed out though, too many people are making too much money for this to change, including Vancouver citizens who purchased at the right time.
    An engineer and a lawyer aren't priced out. Those two want a particular type of house and you can't be that choosy in Vancouver. There's no way they're priced out on a lawyer/engineer salary. Their combined is easily over 200k a year. They can buy a house anywhere in North Van, Burnaby and many other places (not saying it'll be the best, but they can get something). A 3 bedroom condo downtown is probably easily over 2 million, but they can find a 2 bedroom condo around 600K-1m if they insist on being in the heart of downtown, and they'll have the time of their lives living in that condo with the amazing ocean/mountain views.

    Vancouver isn't an average Canadian city. It's above average with above average house prices. I don't see the appeal of North American detached homes anyway. An inefficient gigantic wood box in constant never ending need of maintenance. A condo in the heart of downtown with ocean and mountain views is where it's at.
    If you are able to buy a home in Van, at a combined household income of 200k, that would be classified as the poor when most foreignors justt payout the entire amount of cost 5o the house.
    Do you go to New York expecting to buy a house, when an apartment can be north of 100 million dollars? No you don't. You go and buy a regular condo or townhouse.

    A townhouse can be had for a reasonable price. Even if you have to get a 500k mortgage (you don't need to go this high) your monthly mortgage payment is only 2,287 dollars. If you can't pay that on a combined 200k+ income there's something wrong.

    The math:

    P=500K
    i=2.69% amortized over 25 years.
    pmt= $2,287
    You articulate from your perspective.
    .. Not everyone wants a condo. Speaking of NY, I'm there right now living in my Tribecca condo. I don't live in a home because there basically no such things as houses in Manhatten. Certainly there are houses in NYC, but not in the Manhatten area. Im of the old Chinese thinking, i don't buy unless i have all to pay for it, so my condo was paid in full. Not everyone can do this, nor do they think pragmatically as some like to chase the "White Picket Fence syndrome."

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    real estate agents should be banned as a buyer , if that were to happen, many would be able to afford a condo or a house in Vancouver area.
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    I wonder how many times unscrupulous real estate agents take advantage of elderly or misinformed sellers, undervaluing the homes and have a buddy snap it up and flip it?

    The foreign buyer issue has a real market reaction even if not a single home is sold to a foreign buyer. Perception is everything. If the seller perceives that they can sell it for 10% more to the foreign buyer market, a local buy also may up their bid 5% over asking to counter a possible foreign buyer. The seller pockets an extra 15% and the seller overpays based upon a perceived treat that may not have existed. The next home owner who wants to sell, sees the 15% higher value and ups his selling price by 20%. And so it goes.

    The home owners themselves, with the coaxing of their agents can overheat the market.
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    ^the foreign issue is real, as a number of studies and reports have shown recently. People are afraid to talk about it though because they fear being labeled racist. Politicians are afraid to take action because they fear popping the bubble. Other countries have taken steps to ensure local people can afford real estate, by making it a requirement you be a citizen or a landed immigrant / work status in that country. I think that's fair, if you want to buy up real property, you should make a commitment to that country. The harsh reality is Vancouver doesn't pay enough for people to compete with the more than a million millionaires in China, not to mention various other countries. I don't think its good for cities to be full of empty condos just being held for speculation, its not good for street life (Coal Harbor is like a ghost town), and its not good for equity in society. There is the odd issue I agree with the NDP on, this is one of them.
    Last edited by moahunter; 18-05-2016 at 11:33 AM.

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    Quote Originally Posted by Edmonton PRT View Post
    That is why I sold my parents house and my past three homes myself. Used a lawyer, staged the houses and cost me about $3,000 each but sold each one for the asking price and the last one got 10% over the two professional appasials. Think of all the realtor fees I saved.


    Guys like _______________ deliberately sell homes at low ball prices and quickly encourage sellers to drop the price quickly so he can sell the homes fast and make more on the volume of homes he sells. Easy to be a top realtor, just sell homes cheap because it really costs them only 3 cents on the dollar. For the seller, every dollar less is their home equity.
    Would recommend removing the names to prevent another repeat of the "slumlord" thread and libel suits..

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    Quote Originally Posted by moahunter View Post
    ^the foreign issue is real, as a number of studies and reports have shown recently. People are afraid to talk about it though because they fear being labeled racist. Politicians are afraid to take action because they fear popping the bubble. Other countries have taken steps to ensure local people can afford real estate, by making it a requirement you be a citizen or a landed immigrant / work status in that country. I think that's fair, if you want to buy up real property, you should make a commitment to that country. The harsh reality is Vancouver doesn't pay enough for people to compete with the more than a million millionaires in China, not to mention various other countries. I don't think its good for cities to be full of empty condos just being held for speculation, its not good for street life (Coal Harbor is like a ghost town), and its not good for equity in society. There is the odd issue I agree with the NDP on, this is one of them.
    I still disagree that the issue is whether or not the buyer is foreign. The issue is that wealthy individuals, regardless of where they are from, are buying up property in a speculative/land banking move that is driving up values.

    Compounding this, the further issue is that many units are sitting vacant which prevents the rental market from rising into the norm as it has in other markets (places with many units can be affordable to live even with high land values -> see Montreal).

    This foreign buyer scapegoating is a massive red herring that threatens to derail the discussion and prevent real solutions. To solve the issue I believe we need new legislation enabling:

    - A municipal/regional value added tax on property resale and second property purchases. Note: not a land transfer tax. This would add a sum to properties sold within "x" years of purchasing, and a sum to properties purchased aside from primary residences, preventing reselling as discussed above and limiting the disproportionate share of properties in few hands.

    - A vacancy tax that attaches a monthly fee to rentable units, thus driving more onto the market and reducing rental rates across the board.

    - A new development fee schedule corresponding to condominium board rules. Another problem is that many condominium boards prohibit rental units. The proposed development fee schedule could have two aspects: increased fees for prohibiting rentals, and density bonusing for the development of rental accomodation.



    These new requirements would functionally solve the "foreign buyer issue" without needlessly targeting foreign ownership, which apart from the issues also provides many benefits to city regions.

    Banning foreign ownership would abate the problem, but not solve it. Foreign nationals could simply transfer funds to friends/family within Canada, or set up Canadian corporations to purchase the property. Furthermore, it would seriously depress the development market by restricting FDI, and do nothing to address the dearth of affordable rental units.

    My solution enables continued FDI while solving the accumulation of properties for speculative purposes, and massively increasing the supply of rental units. If enacted, I believe Vancouver would actually become one of the more affordable major city housing markets in the country (for rentals***) given the mass vacant owned property rates.

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    ^your suggestions simply aren't practical, which is why they haven't been implemented anywhere, you would need a massive bureaucracy to police them. What I suggested, is practical, is a simple legislative fix, and has worked to reduce the pressure in other countries.

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    Quote Originally Posted by moahunter View Post
    Other countries have taken steps to ensure local people can afford real estate, by making it a requirement you be a citizen or a landed immigrant / work status in that country.
    Like which, specifically? I'll take particular cities, or entire countries. I'm genuinely curious, because I can't think of any offhand. And I'd be willing to bet that a good lawyer can get around just about any of them.

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    ^21 in Europe listed here:

    https://tranio.com/traniopedia/tips/...rty_purchases/

    Along with a number of others listed. Also, New Zealand, and Australia. Canada is an outlier in not having these type of restrictions, and accordingly, along with the U.S., is top of the list for land speculators.

    I note we have similar restrictions in Canada with respect to business investment - with a requirement that investments over a certain size undergo review.
    Last edited by moahunter; 18-05-2016 at 01:18 PM.

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    Right from your link:

    Nevertheless, most major European countries (e.g., France, Germany, Italy, Spain and UK) allow overseas investors to buy residential and commercial real estate with the same rights as local citizens.

    Even minor limitations can deter buyers, even if they had their heart set on a specific country, but these restrictions can often be avoided by creating a legal entity for example.
    Most of the restrictions listed at your link are in very specific regions or types of land (not near military bases, agricultural land, or land near national borders), or for completely unique countries like Liechtenstein or Switzerland.

    According to your link, by all appearances the vast majority of Europe has little or no restriction on foreign ownership of residential property. And some of the places with the tightest restrictions like Liechtenstein or Switzerland, still have some of the most expensive property in the world.

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    ^so? Why wouldn't you do this? What's wrong with requiring Canadian real estate to be owned by people who live and work in Canada? Its an obvious first step to cooling what is an issue. I note that China has restrictions of foreign ownership of real property, nobody is saying that is racist. Here is a petition on the issue:

    In his petition Wong asks the Canadian government to take action on five fronts:
    ■Collect data on off-shore investment in Canada's real estate market.
    ■Investigate financial transactions flagged as suspicious by FINTRAC.
    ■Consider restricting foreign ownership.
    ■Demand real estate boards and lawyers disclose information about buyers and sources of incomes.
    ■Study the restrictions placed on off-shore investment by Australia, USA, Hong Kong, England, Singapore and New Zealand.
    http://www.cbc.ca/news/canada/britis...ship-1.3584125
    Last edited by moahunter; 18-05-2016 at 01:36 PM.

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    I'm not saying that some restrictions aren't worth considering. You just have a habit of making sweeping statements with little backing in reality. To this point you've provided little evidence that such restrictions are common in other developed countries, and absolutely none that such restrictions have impacted affordability. So far you've managed a web page that specifically caters to people looking to buy foreign property and apparently some random dude's petition.

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    Quote Originally Posted by Marcel Petrin View Post
    I'm not saying that some restrictions aren't worth considering. You just have a habit of making sweeping statements with little backing in reality.
    Such as? Please quote, I provided sources, and I noted this is an easy change that other countries have implemented, far simpler than Jaredo's idea to police whether or not condo's are empty and accordingly should be taxed more (I'm waiting to see which countries have implemented that). If it doesn't help after implementing it, then fine, other ideas could be looked at. I think it would be an important first step though. I find it funny how other countries like China can have strict rules on foreign ownership, but if we suggest the same to try and make life affordable for Canadians, its somehow racist / foreigner scape goating.
    Last edited by moahunter; 18-05-2016 at 01:54 PM.

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    Quote Originally Posted by moahunter View Post
    ^your suggestions simply aren't practical, which is why they haven't been implemented anywhere, you would need a massive bureaucracy to police them. What I suggested, is practical, is a simple legislative fix, and has worked to reduce the pressure in other countries.

    They are absolutely practical. Tracking would be simple and conducted through the land title system.

    What you are suggesting wouldn't even work, because the property would just be purchased through a family member or corporate entity. It also does nothing to enable rental units, which should be the primary goal.

    Frankly I'm really surprised at your stance here. We have almost flipped positions. I would rather a much more market-oriented approach that enables continued FDI and pushes more rental units to market.

    The anti-foreign ownership idea doesn't address the problem, and reeks of xenophobic scapegoating. It is a very dangerous idea that would have serious repercussions on the regional economy.

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    Quote Originally Posted by Jaerdo View Post
    What you are suggesting wouldn't even work, because the property would just be purchased through a family member or corporate entity.
    Nothing is perfect Jaredo, a corporate entity is a very tax inefficient way to purchase real property, and a family member requires a level of trust not every speculator is going to agree to. And no its no xenophobic, its addressing a real problem, just like our foreign business investment rules address a real problem. Its not xenophobic for China to have rules like this, and its not xenophobic for Canada as well.

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    The problem isn't who is buying the home though, it is how they are buying the home. It is xenophobic because it abandons dealing with the actual problem in favour of targeting a specific subset of the population behind it.

    I'll draft an analogy:

    Resource exploitation firms have a long history of environmental damage, and it is at a boiling point with damage to neighbouring properties, water supplies, etc. The primary culprit behind the issue right now is new hydraulic fracturing firms.

    Is the solution:

    A) Ban hydraulic fracturing in general; or,

    B) Set new environmental requirements that apply to all firms in order to prevent the damage.

    I think it is pretty clear that banning the person for fear of what they might do is the wrong approach. The better one is to ban what we fear.

    The repercussions of banning foreign ownership in property are colossal. There would be a major depression in real estate development that would reverberate through the entire economy. Ongoing and future projects would fail and be abandoned, firms would go bankrupt, homeowners would lose value in their property likely forcing thousands upon tens of thousands of mortgages underwater.

    The real solution is to address the affordability of housing and to ban particularly egregious practices like shadow flipping. Addressing the affordability of housing in high land value markets is simple: promote density and push units to the rental market.
    Last edited by Jaerdo; 18-05-2016 at 02:06 PM.

  57. #57

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    Quote Originally Posted by Jaerdo View Post
    The repercussions of banning foreign ownership in property are colossal. There would be a major depression in real estate development that would reverberate through the entire economy.
    Source? I'm not the one making sweeping statements like "Colossal" or "Xenophobic". This isn't the experience of other countries with restrictions on foreign residential property ownership.

    In addition, the majority of the world’s federal governments, unlike Ottawa, have various restrictions on foreign ownership. Those countries include Australia, Denmark, Mexico, Singapore, Hong Kong and a host of nations.

    Unlike many Canadian politicians and extraverted real estate developers, the leaders of these countries don’t think it’s “xenophobic” to safeguard national sovereignty. The U.S. is among the nations that institute various kinds of (often-complex) tax restrictions on foreigners buying housing.

    Even several Canadian provinces don’t allow all foreign purchases. Manitoba, Quebec, Alberta and Saskatchewan restrict the sale of farmland to non-residents.
    http://vancouversun.com/life/even-th...ship-in-detail
    Last edited by moahunter; 18-05-2016 at 02:19 PM.

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    Let's see how those places are going:

    Australia

    http://www.theglobeandmail.com/real-...ticle24325255/

    But that has not calmed the debate in Australia. In fact, at least one expert questions whether the measures have papered over the real problem.

    “I would posit that the reason why Australia’s housing has boomed is because of debt-financed speculation,” said Philip Soos, co-author of an 810-page book called Bubble Economics, published by the World Economics Association last year.

    “It is always the perception here that it is the Yellow Peril [driving up housing prices]. But it’s mostly domestic investment that is to blame.”

    Mr. Soos, an economist at Deakin University in Melbourne, said Australia’s housing-price climb started 15 years ago – long before China’s middle class emerged and started trying to invest globally – and it has become an unsustainable bubble.

    ...

    Many people do not even bother renting out their investment properties because they expect to make their gains on rising prices. Mr. Soos did a study of water use in Melbourne and found that 60,000 homes did not use any water for a whole year.
    Oops, looks like the restrictions missed the boat by focusing on xenophobic race issues instead of the real issue which is speculative practices and high owned vacancy rates. I wonder what would have happened to Melbourne rental prices if 60,000 houses entered the market?

    Denmark

    Here's a nice guide from a real estate publication which illustrates what happens when you ban foreign ownership (which fyi only applies to second homes and key coastal areas in denmark) in a nifty guide to realtors and prospective clients:

    Since it is extremely difficult to buy Danish property as a nonresident foreign individual, forming your own local limited company to do the buying for you is an option. An ApS (Anpartsselskab), the Danish version of a private limited company, is recommended.

    Resident legal entities are allowed to acquire property.
    Oops, looks like foreign ownership bans missed the boat. People just register corporate entities to buy homes after all. I'm not sure why you think the hyper-wealthy Chinese trying to land bank in Vancouver would be adverse to this.

    Mexico

    http://madb.europa.eu/madb/barriers_...156&version=12

    Mexico has traditionally imposed significant restrictions on foreign direct investment in a number of important economic sectors, which have been reserved to the State or to Mexican citizens, or where foreign participation is limited to certain ceilings. This has been a major barrier for access of EU (and other) companies to the Mexican markets, particularly in key services sectors, and also has an impact on the overall competitiveness of the Mexican economy. Furthermore, cumbersome procedures and weak rule of law impose additional costs on foreign investors in all sectors.
    Wow, looks like foreign ownership laws had a serious impact on their economy after all.

    and:

    Real estate: Investment restrictions still prohibit foreigners from acquiring title to residential real estate in so-called "restricted zones" within 50 kilometres of the nation’s coast and 100 kilometres of the borders. In all, the restricted zones total about 40 % of Mexico’s territory. Nevertheless, foreigners may acquire the effective use of residential property in the restricted zones through the establishment of a 50-year extendable trust (called a fideicomiso) arranged through a Mexican financial institution that acts as trustee.
    After all the damage done with sweeping bans, it didn't even help housing anyways because money always finds a way to circumvent silly laws.

    Singapore

    http://www.state.gov/e/eb/rls/othr/ics/2011/157355.htm

    Real Estate: Under the Residential Property Act, foreigners are allowed to purchase condominiums or any unit within a building of six or more levels without the need to obtain prior approval from the Singapore Land Authority. For landed homes (houses) and apartments in buildings of fewer than six stories, prior approval is required. There are no restrictions on foreign ownership of industrial and commercial real estate.
    Doesn't appear that singapore was a good example for you to use. Foreigners can purchase all kinds of property, and merely require approval for the rest. Moreover, you can simply set up a Singapore registered corporation if you want to circumvent that step.

    Hong Kong

    Hong Kong doesn't ban foreign ownership, they slap a tax on it. This is more of a trade tariff than a policy designed to control housing prices (though I guess they sold it like that). I'm in favour of the taxation method, though I don't understand why a billionaire speculator from China should have to pay the tax and not a billionaire speculator from Toronto.



    Foreign ownership restrictions are a populist, xenophobic reaction to a far deeper issue. They are ineffective at combating the impacts of speculative real estate purchasing, at best they do nothing to cool housing values, and at worst they hurt local business by crushing FDI.
    Last edited by Jaerdo; 18-05-2016 at 02:52 PM.

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    ^In your sources you are mixing up business investment and real estate investment, and cherry picking your quotes. Go figure. Vancouver is going to remain a desirable location to invest in, even if we ban foreign investment in real property residential housing - i.e. require that such property be owned by people with Canadian work permits / residency / citizenship. Such a change is not going to have colossal implications like you suggested, it certainly hasn't caused the sky to fall on Alberta farming for example, but I think it will perhaps cool the situation a bit given the high percentage of foreign speculation going on, which should be the goal right now. There is obviously a large amount of illegal money flowing into Vancouver, I don't think that this will end up well if steps aren't taken soon.
    Last edited by moahunter; 18-05-2016 at 03:05 PM.

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    In the Mexico one, yes - because the real estate restrictions were a component of larger FDI restrictions (I understand some of the real estate parts have actually been lightened in recent years). However the point is identical: FDI restrictions hurt the economy and real estate ownership restrictions are ultimately ineffectual.

    I still don't see why you are hell-bent on targeting foreign speculation. Why is the Chinese billionaire speculator an issue, but the Torontonian billionaire speculator not? Why not just establish rules that target the speculation, instead of the person doing it?

  61. #61

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    Quote Originally Posted by Jaerdo View Post
    Why is the Chinese billionaire speculator an issue, but the Torontonian billionaire speculator not? Why not just establish rules that target the speculation, instead of the person doing it?
    Because the Toronto speculator lives in Canada, pays taxes in Canada. There is nothing that would stop a foreign billionaire immigrating to Canada if they want to purchase real property here, in fact, that's what we should be encouraging, so they pay tax here on all their income, just like the Canadian billionaire. Its not about billionaires though, its about foreign millionaires speculating on houses that they will never live in. I would like housing policy to be first and foremost about "housing" Canadians (whatever their ethnicity), not creating a speculator bubble for people who don't even choose to live here.
    Last edited by moahunter; 18-05-2016 at 03:11 PM.

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    The Chinese billionaire pays property taxes just the same. Given the panama papers revelations, I'm not too confident on the Canadian billionaire paying income taxes at all...

    Regardless, that is a completely separate issue. The problem here is ostensibly housing prices, which a foreign ban will do nothing to abate. Your above point about foreigners immigrating here to buy property is further proof of my argument.

    I believe you are correct in the earlier assumption that Vancouver will remain a high-value investment market even if we ban foreign ownership, though some projects WILL fail because they are almost entirely financed by overseas buyers.

    That is why I believe the solution is to transition to a rental-dominated housing market. The ideal end point would be a rental market like Montreal (high land values, high supply of rental units, resulting affordable rents) while retaining the global investment potential of Vancouver.

    Therefore the target should be ending rapid resales, vacant units, and sub-optimal land usage (low density).

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    That is why I believe the solution is to transition to a rental-dominated housing market. The ideal end point would be a rental market like Montreal (high land values, high supply of rental units, resulting affordable rents) while retaining the global investment potential of Vancouver.
    have you been to Montreal? Property is dirt cheap there except for a few posh areas, land is not expensive, it is in no way comparable to Vancouver, house prices there are less than Edmonton, so of course rentals are cheap.
    Last edited by moahunter; 18-05-2016 at 03:16 PM.

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    What I understood was the much longer development period has resulted in pockets of low value on the Island, but generally the Island itself is highly priced. If you leave the Island, you can get cheaper property - just like if you head further out into the suburbs of Vancouver.

    The primary difference being that in all areas the prevalence of rentals vs. ownership is far higher due in large part to the cost of rental being lower than the cost of homeownership, which is not the case in other jurisdictions.

    he decision to become a homeowner depends on a comparison between the shelter costs of being an owner3 and the shelter costs of being a renter4. This decision that households face can therefore be measured by the ratio between the cost of owning a property and the cost of renting a property. The higher the ratio, the more incentive households have to remain renters; conversely, the smaller the ratio, the more incentive they have to become owners.
    The ratio between the average monthly shelter costs for households who owned their dwelling and those who rented their dwelling was approximately 137 per cent in 2011 in Québec, but was lower (133 per cent) in the rest of Canada5 , which helps to explain Québec’s lower homeownership rate.
    http://fciq.ca/pdf/mot_economiste/me_102013_a.pdf

    A side point is another contributing factor is rent controls, which is an experiment I do not support.

    The point remains that if the thousands of vacant units in Vancouver were pushed onto the market, the laws of supply and demand dictate that prices would drop substantially for rentals. That is the solution to housing affordability.

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    Quote Originally Posted by moahunter View Post
    That is why I believe the solution is to transition to a rental-dominated housing market. The ideal end point would be a rental market like Montreal (high land values, high supply of rental units, resulting affordable rents) while retaining the global investment potential of Vancouver.
    have you been to Montreal? Property is dirt cheap there except for a few posh areas, land is not expensive, it is in no way comparable to Vancouver, house prices there are less than Edmonton, so of course rentals are cheap.
    You are correct moahunter. In Montreal there are huge areas of cheap land. Vancouver is geographically hemmed in by mountains, water, the US border and can only grow upwards, not outwards.
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    ^It is also undesirable to foreign investors for language reasons. Toronto by contrast, is having some of the same issues as Vancouver, albeit on a smaller scale. Without doubt growth restrictions, be they geographical, or imposed by regulation, increase land values (making denser living more necessary), but not at the rate of Vancouver or Toronto right now.
    Last edited by moahunter; 18-05-2016 at 04:27 PM.

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    that is very true

    A new report says Vancouver's inadequate public transit and lack of affordable housing may hinder the city's ability to attract labour and business investment

    http://www.cbc.ca/news/canada/britis...port-1.3588331
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    Burnaby man petitions federal government to track Vancouver foreign ownership.


    http://globalnews.ca/news/2705036/bu...ign-ownership/
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    A bit like the high tech boom of the late 1990s.


    I wonder if 10 years of these large price increases haven't created a self-perpetuating upward spiral of rising demand for long-lived assets based on bringing forward lot of demand/consumption that would otherwise have been future consumption. How much is

    The beauty of the tech bubble was that in the crash all production related assets essentially vanished. On the other hand, overproduce mines, wells, factories, houses, etc. and their intrinsic/tangible nature means that the oversupply persists and keeps rearing its ugly head unless demand is somehow pushed up in to absorb any excess capacity.


    Gary Lamphier: In Vancouver, houses generate higher incomes than people



    “The wealth here is staggering in many ways, judging from the number of Lamborghinis on the road. And if I look at how much wealth is generated just through real estate, it’s huge.”


    http://edmontonjournal.com/opinion/c...-citys-workers
    Vancouver homeowners earned more for 'twiddling thumbs' than others do by actually working
    http://vancouversun.com/news/local-n...tually-working

    In Vancouver, house owners made more sitting on their assets than entire population did by actually working last year
    Rising land value of single family homes made owners about C$25billion in 2015 in Vancouver, exceeding all employment income in the city, according to mathematician Jens von Bergman
    http://www.scmp.com/comment/blogs/ar...-assets-entire





    By the way, the above looks a bit like a traded security's book value comparison. You basically look at a city as a residential property REIT and ask: What is it's book value? What's it's growth in book value?

    There there's market capitalization - which could be a very interesting way to compare cities and the residential, commercial and industrial sectors within cities.




    One more point: The Canadian principal residence requirement applying to non-Canadian properties seems odd to me. I've lost the link where I read it but is that correct? As a Canadian you can have a tax free primary residence outside of Canada? if so, why is it there? So someone immigrates to Canada and gains citizenship (moves to say Vancouver then sells out with a million or two million gain on their house) but then buys another principal residence in say Arizona but doesn't pay cap gains tax? Because it's there principal residence. Fine I suppose if you move back to Canada. What if you don't?

    Seems odd to me. But I guess eventually they will die and their estate should be taxable - unless they now seek US citizenship.... Is that how it works? No tax due? It that how it works? Can Canada just be be a tax free-stepping stone?



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    Last edited by KC; 05-06-2016 at 03:35 PM.

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    Big changes coming to Vancouver's real estate industry, but is it too late?

    B.C. ends self-regulation of real estate industry

    VANCOUVER -- British Columbia is ending the self-regulation of the real estate industry in a move Premier Christy Clark says is aimed at protecting consumers.
    Clark said Wednesday the province will hire a new superintendent of real estate, who will take over the rule-making authority held by the B.C. Real Estate Council.

    The announcement comes the day after an independent advisory group tasked with restoring consumer confidence in the industry released a report with 28 recommendations, including hefty fines for misconduct.

    "After reading the report, our conclusion is that the privilege of self-regulation in the real estate industry must end," Clark said in a statement.
    Shady practices are putting consumers at risk and tarnishing the reputations of honest agents, she added.

    The Real Estate Council of B.C. created the advisory group in February amid concerns about predatory sales tactics and allegations that some agents were deceiving clients in order to rack up larger commissions.

    The group's report suggested prohibiting a single agent from representing both buyers and sellers in a single transaction, having any profits received from misconduct returned to the client, and creating a confidential whistleblower hotline.

    It also recommended the province hike the maximum misconduct fines to $250,000 for individual Realtors and $500,000 for brokerages -- a significant increase from current maximum fines of $10,000 and $20,000.

    A government release said the province accepts the recommendations and will implement the new penalties.

    It will also revamp the real estate council, which is currently made up of 14 industry members and three government employees, by replacing a majority of the members with people from outside of the industry.
    http://www.ctvnews.ca/business/b-c-e...stry-1.2967218

  71. #71

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    In a six-month period, 70% of detached homes sold in Vancouver’s west side went to Mainland China buyers

    http://news.nationalpost.com/news/ca...d-china-buyers

  72. #72
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    That spectacularly contradicts the title thread.

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    Well, personally I've never believed that foreign buyers were NOT having an massive effect of Vancouver's real estate. I think the original CBC article, to put it bluntly, is full of sh1t.

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    That's a ridiculous % of the total sales. And the % of the higher end homes is probably even higher than 70%

    And how many of them are even going to be living in those houses?
    Did my dog just fall into a pothole???

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    A good (long) listen of Brian Lee Crowley on Vancouver housing.

    https://www.naiopvcr.com/media/35321...mixdown_v2.mp3
    www.decl.org

    Ottawa-Edmonton-Vancouver-Edmonton

  76. #76
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    http://www.cbc.ca/news/canada/britis...tate-1.3673844
    Vancouver to get powers to tax empty homes, says province

    The B.C. government will give the City of Vancouver the powers it needs to implement an empty home tax, provincial Finance Minister Mike de Jong announced this morning.
    "It strikes us that if the city wants to do this, it is a reasonable request on their part," said de Jong, who has requested the Speaker's office reconvene the legislature on July 25 to implement the legislative changes necessary.
    The provincial government is solely responsible for providing the "statutory powers" necessary within the Vancouver Charter to allow for the tax, he said.
    It will then be up to the City of Vancouver to determine the tax rate andhow to measure whether a home is empty or not.
    "This challenge we face as British Columbians around housing, the challenge associated with people coming here and the strong economy, aren't going to be solved overnight," said de Jong. "They are not going to be solved in any one single way. It is going to take governments working together.
    "It is ultimately about supply. It is about trying to increase the supply of rental accommodation. You will know it is something the province and the government takes very seriously."

    Very glad they went for a sensible restriction that will push properties to the rental market instead of fear and emotion based racial scapegoating.

  77. #77

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    Quote Originally Posted by Jaerdo View Post
    Very glad they went for a sensible restriction that will push properties to the rental market instead of fear and emotion based racial scapegoating.
    Equating foreign investment rules (which many countries outside Canada have, including China) and money laundering concerns, with racial scapegoating = gross and uneducated stereotyping.

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    Let's be real, the foreign investment rules people want are all about the "yellow peril". They also don't work. They tried them due to the same issue in Sydney. Didn't work.

  79. #79

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    Quote Originally Posted by Jaerdo View Post
    Let's be real, the foreign investment rules people want are all about the "yellow peril". They also don't work. They tried them due to the same issue in Sydney. Didn't work.
    Please provide support for your claim that such rules only target people with "yellow" skin. If you can't, then retract it. By your ignorant logic, all immigration or foreign investment rules (which Canada has) are racist / we shouldn't have a border at all. My understanding is that in every country which has foreign investment rules which require people to be residents to purchase residential property, including China, there is no racial criteria at all. They equally apply to foreigners (people who don't have legal status to live or work), of any race or country. As to the claim it hasn't helped in Australia, please provide proof regarding what house prices would be there if the rules they had did not exist.
    Last edited by moahunter; 12-07-2016 at 06:37 AM.

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    They don't, but that is the grounding for them. It is a commonly used term - "yellow peril". The Chinese are scapegoats for rampant speculation in the property market.

    We've gone through this ad nauseum in other threads. Foreign ownership laws are not effectual because they are not barriers to investment. Investors can simply start a Canadian LLC and purchase property through it. They can also transfer money to relatives or friends, or become citizens through the immigrant investor program.

  81. #81

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    Quote Originally Posted by Jaerdo View Post
    They don't, but that is the grounding for them. It is a commonly used term - "yellow peril". The Chinese are scapegoats for rampant speculation in the property market.

    We've gone through this ad nauseum in other threads. Foreign ownership laws are not effectual because they are not barriers to investment. Investors can simply start a Canadian LLC and purchase property through it. They can also transfer money to relatives or friends, or become citizens through the immigrant investor program.
    Canada doesn't have LLC companies. Any rules that are put in place can also contemplate corporate ownership (which is also expensive). Canada is catching up with the rest of the world. A good example is Denmark, they recognized that living next door to a massive country that has hardly any coastline, they needed rules to preserve their beaches for their residents, hence foreigners can't purchase property. Canada has foreign investment rules for business investments (they aren't racist) and it is going to need for the same reasons, foreign investment rules for residential property (which also won't be racist), it's just a matter of when.

  82. #82
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    Quote Originally Posted by moahunter View Post
    Canada doesn't have LLC companies. Any rules that are put in place can also contemplate corporate ownership (which is also expensive). Canada is catching up with the rest of the world. A good example is Denmark, they recognized that living next door to a massive country that has hardly any coastline, they needed rules to preserve their beaches for their residents, hence foreigners can't purchase property. Canada has foreign investment rules for business investments (they aren't racist) and it is going to need for the same reasons, foreign investment rules for residential property (which also won't be racist), it's just a matter of when.
    My bad for applying other countries' corporate systems to ours. Based on the articles I've read on it, this is still an issue especially for the "mass buying" that happens in new developments. You have an "investment firm" which is just a vehicle for offshore buyers that eat up the majority of new units in condo developments. Then they just sit vacant. The immigrant investor issue remains a huge problem, and foreign buyer restrictions will do nothing to solve that. Altogether I disagree that foreign purchase restrictions will help ease housing costs. There are too many other vehicles to purchase, and much of the demand is in fact domestic.

    FYI in denmark an entire industry exists to form corporate entities to purchase property. The cost of doing so is negligible compared to the actual cost of property. http://www.globalpropertyguide.com/E...k/Buying-Guide

    Since it is extremely difficult to buy Danish property as a nonresident foreign individual, forming your own local limited company to do the buying for you is an option. An ApS (Anpartsselskab), the Danish version of a private limited company, is recommended.Resident legal entities are allowed to acquire property.

    ...A private limited company need have only one founder; there is no fixed maximum number of members. The minimum capital is DKK125,000 (€16,733), with no maximum limit. A company can be formed in very short time. You can also buy a shelf company, which can be arranged within a few days. The costs involved in the formation of a new company with the minimum share capital amount to approximately DKK7,000 (€937) to DKK15,000 (€2,00 8.
    And to clarify in terms of racism, I'm not saying the policy is racist. I'm saying the desire for the policy is driven by racism - i.e. fear of the "yellow peril". You don't have to go further than CBC articles and comment sections to see this is the truth.

    What we need to do is adjust our cultural expectations of property ownership. People need to accept that living in a powerhouse global city means they will likely be limited to owning condominium properties, and many will need to adjust to simply renting as is the case in many other countries around the world. To enable both of those things, vacancy limitations and stringent transaction rules are needed - they will push properties to market and ensure everyone has access to shelter.
    Last edited by Jaerdo; 12-07-2016 at 08:33 AM.

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    Devil will be in the details on implementation of this.

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    Yes, the tax needs to be a sufficient burden to incent property owners to rent their vacant units. I would like to see a scaling tax as well - first vacant property x%, two properties x+1%, three properties x+3% etc. This will effectively target those buying up large numbers of units in new developments.

    Also, I would like to see all income from this tax channeled to enabling affordable housing.

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    I mean more along the lines of how you even determine who truly owns a property, whether it's vacant, and so on. If someone visits for a week twice a year, is that vacant? What about if they just visit once for a couple days? How does the city prove vacancy? So on and so forth.

  86. #86

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    Quote Originally Posted by Marcel Petrin View Post
    Devil will be in the details on implementation of this.
    Quote Originally Posted by Marcel Petrin View Post
    I mean more along the lines of how you even determine who truly owns a property, whether it's vacant, and so on. If someone visits for a week twice a year, is that vacant? What about if they just visit once for a couple days? How does the city prove vacancy? So on and so forth.
    I'm curious as well if this works, and how it would work, and how it would be enforced. I'm very doubtful, but we will see. There are so many complexities, like someone who works one month on, one month off, in Vancouver. Do they get caught on the off months? Who is going to check when they are, or aren't, in the property? Sounds like a bureaucratic nightmare to me (a lot more complex than requiring a Canadian SIN / proof of residence before registering a real property document).
    Last edited by moahunter; 12-07-2016 at 10:51 AM.

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    The line that determines "residency" should be the same system used for taxation purposes otherwise. For owned properties, you can only have one "primary residence". For rented properties, you already have to claim rental income for your properties.

    If you own a property that is not your primary residence, and is not being rented, it is vacant.

  88. #88

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    ^what if your child is using it? or your mistress / mr? A lot of Canadians and non-Canadians purchase property in Canada for use by their children while they study, or by their mistress / mr, on the side. Your definition would catch those properties as vacant, when they are not.
    Last edited by moahunter; 12-07-2016 at 11:14 AM.

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    Quote Originally Posted by moahunter View Post
    ^what if your child is using it? or your mistress / mr? A lot of Canadians and non-Canadians purchase property in Canada for use by their children while they study, or by their mistress / mr, on the side. Your definition would catch those properties as vacant, when they are not.
    Then I suppose they would do well to charge them a nominal price, say $1, and avoid the tax by claiming that as rental income.

    There could also be a relatively simple registry in which the resident sends in a form and declares they are living in the unit that would otherwise fall through the cracks and be taxed.

    Another option to this entire thing is to have a resident registration system. Other countries such as the Netherlands do this. When you move, you register with the municipality in that place. If no one is registered, it is considered vacant. I personally prefer the other way as it is less intrusive, but the registration system is certainly more effective.
    Last edited by Jaerdo; 12-07-2016 at 11:45 AM.

  90. #90

    Default Irarational 10-year home price spike

    Vancouver’s housing market rebounded after the 2008-09 recession and has been on a tear over the past three years. Prices for condos and townhouses across the region have rallied at least 25 per cent over the past 12 months.

    Mr. Soper and Mr. Yan said low interest rates, limited housing supply and foreign capital are among the key ingredients behind Vancouver’s housing bonanza. Prof. Ley agrees that there are several important drivers, though he argues that buyers from China are the “decisive factor” in sales of high-end properties on Vancouver’s west side, sending a ripple effect across the region.
    http://www.theglobeandmail.com/repor...ticle30898432/

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    Quote Originally Posted by Jaerdo View Post
    Quote Originally Posted by moahunter View Post
    ^what if your child is using it? or your mistress / mr? A lot of Canadians and non-Canadians purchase property in Canada for use by their children while they study, or by their mistress / mr, on the side. Your definition would catch those properties as vacant, when they are not.
    Then I suppose they would do well to charge them a nominal price, say $1, and avoid the tax by claiming that as rental income.

    There could also be a relatively simple registry in which the resident sends in a form and declares they are living in the unit that would otherwise fall through the cracks and be taxed.

    Another option to this entire thing is to have a resident registration system. Other countries such as the Netherlands do this. When you move, you register with the municipality in that place. If no one is registered, it is considered vacant. I personally prefer the other way as it is less intrusive, but the registration system is certainly more effective.

    You can't claim a property as a rental property if it has no hope of earning a taxable profit.

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    On the other hand, if you believe, as I do, that the primary purpose of housing is shelter and not investment vehicle, the fact that anyone is staying in the property makes the property occupied. It's one of the complications of trying to find a "occupied"/"nonoccupied" formula.

  93. #93

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    Some interesting points in the article below.

    My view is that as a taxpayer I don't want to be on the hook for potentially thousands of defaulting mortgages by a bunch of heavily indebted paper millionaires. In Vancouver 90% of detached houses are priced at over $1 million, and people are still rushing to buy and bid up prices. That's fine with me now, because everyone's had many, many years of "heads ups" warnings as to the risks they are taking on. If things collapse in some dramatic fashion, it's their own fault for being a part of it.

    Moreover, CMHC says it's reducing its risk exposure so that's great news to me. However, as a taxpayer watching this near hyperinflation occur for many, many years now, I don't want to see CMHC coming to the taxpayer for a single cent saying it was an "unpredicted" collapse. As I see it, a potential collapse in Toronto and/or Vancouver housing markets will automatically place all kinds of other massive demands on Canadian taxpayers. Out of necessity, governments will be expected to create a soft-landing and that's bad enough, but I don't want to see another repeat of the all too common "privatizing of gains and socializing of losses" that occurs when an entirely plausible slowdowns occur within markets while people have thrown all caution to the wind.


    The last thing homebuyers need is new taxes in the name of a hyped-up ‘housing crisis’
    Joe Oliver, Special to Financial Post | July 13, 2016



    http://business.financialpost.com/fp...housing-crisis
    Last edited by KC; 15-07-2016 at 10:11 AM.

  94. #94

    Default Vancouvers housing problems not about race, rather, public policy

    Very good article. It points out that those incorrectly bringing up the race card are typically people with a vested interest in high prices (eg real estate agents):

    http://vancouversun.com/opinion/colu...ors_picks=true

  95. #95

    Default CitiZen group rises up in Vancouver

    http://www.theglobeandmail.com/real-...ticle30937362/

    Many of the founding members are Asian, and even part of friends of Hong Kong, which also proves this isn't the "racial", "yellow perril" issue Jaredo makes it out to be. Some interesting concerns that neighbourhoods are becoming sterile because ma and pa shops are being priced out of neighbourhoods.
    Last edited by moahunter; 17-07-2016 at 09:22 AM.

  96. #96

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    Quote Originally Posted by moahunter View Post
    http://www.theglobeandmail.com/real-...ticle30937362/

    Many of the founding members are Asian, and even part of friends of Hong Kong, which also proves this isn't the "racial", "yellow perril" issue Jaredo makes it out to be. Some interesting concerns that neighbourhoods are becoming sterile because ma and pa shops are being priced out of neighbourhoods.
    I haven't read your article yet (I will in a second), but a lot of mainlanders and "Hong Kongers" absolutely hate each other. A lot of the immigration to Vancouver from China was actually from Hong Kong originally. Mainland immigration started in the 2000's and tbh, I've never come across any mainlander that says bad things about people from HK, but HK people (who speak Cantonese btw, not Mandarin) are ready to bash the mainlanders at a moment's notice.

    They're more than willing to jump on the Asian bandwagon and they always have.

    Edit: just read the article. Didn't say anything new tbh. The main issue is this: how do you define foreign ownership? Your answer to this question will define which side you're on. If you believe citizenship is enough (my view), than foreign ownership is not an issue. If you believe being a citizen or a permanent residency is NOT enough (you'll open a can of worms with this argument), than you'll think foreign ownership is an issue.

    There is a way to fix this without restricting investment and/or increasing taxes! The city needs to remove height restrictions in the downtown core and also remove the view corridors that were set up decades ago. Those restrictions are from a different era. There's zero land left and they're not letting anything over 200 meter nor are they allowing towers that block certain view corridors! That's insane. The money is here, the willingness is here and the need is 100% here! Vancouver needs to build 400-500 meter towers. Imagine Dubai with a 200 meter height restriction. Of course prices would reach insane levels.

    The whole foreign ownership thing is a battle for the avg Joe on the street. It doesn't even make sense to fight this battle. You have low interest rates, extremely low supply, no land, Canada's lowest unemployment rate currently (it was a couple of months ago at least), high demand etc... all causing prices to skyrocket. Who decides which Canadian citizen is "foreign" and who isn't? I've talked to realtors downtown and on every offer sheet the offeree has to declare if he/she is a citizen of Canada or not (I did the same when I bought my condo). They say that almost every Chinese person they deal with is a citizen. Vancouver isn't Halifax purely because of all this foreign investment. Let's increase supply and fix the issue. Right now there's less construction in downtown Vancouver then there is in Burnaby (a skytrain hop away from the city center).

    In the grand scheme of things, Vancouver isn't even as unaffordable as people make it to be.
    Last edited by Abii; 17-07-2016 at 02:54 PM.

  97. #97

    Default Chinese money laundering

    Interesting article about a Chinese property tycoon involved in 500m of investments in Vancouver real estate:

    http://news.nationalpost.com/news/ca...property-deals

    The suggestion is that massive amounts of money has being laundered / stolen from China and invested in Vancouver. I wonder if at some point their will be arrests, and the bubble will pop, or if government will just keep turning a blind eye because too many people are profiting to care.
    Last edited by moahunter; 24-07-2016 at 04:56 PM.

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    Quote Originally Posted by SP59 View Post
    Quote Originally Posted by Jaerdo View Post
    Quote Originally Posted by moahunter View Post
    ^what if your child is using it? or your mistress / mr? A lot of Canadians and non-Canadians purchase property in Canada for use by their children while they study, or by their mistress / mr, on the side. Your definition would catch those properties as vacant, when they are not.
    Then I suppose they would do well to charge them a nominal price, say $1, and avoid the tax by claiming that as rental income.

    There could also be a relatively simple registry in which the resident sends in a form and declares they are living in the unit that would otherwise fall through the cracks and be taxed.

    Another option to this entire thing is to have a resident registration system. Other countries such as the Netherlands do this. When you move, you register with the municipality in that place. If no one is registered, it is considered vacant. I personally prefer the other way as it is less intrusive, but the registration system is certainly more effective.

    You can't claim a property as a rental property if it has no hope of earning a taxable profit.
    i'm not sure that's correct (is there an accountant in the board?)... i think you can declare it as a rental property, you just can't continue to deduct your annual losses - including any depreciation - if there is no reasonable expectation of earning a profit and the time frame for that can be outside of the current taxation year.
    "If you did not want much, there was plenty." Harper Lee

  99. #99

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    Quote Originally Posted by kcantor View Post
    Quote Originally Posted by SP59 View Post
    Quote Originally Posted by Jaerdo View Post
    Quote Originally Posted by moahunter View Post
    ^what if your child is using it? or your mistress / mr? A lot of Canadians and non-Canadians purchase property in Canada for use by their children while they study, or by their mistress / mr, on the side. Your definition would catch those properties as vacant, when they are not.
    Then I suppose they would do well to charge them a nominal price, say $1, and avoid the tax by claiming that as rental income.

    There could also be a relatively simple registry in which the resident sends in a form and declares they are living in the unit that would otherwise fall through the cracks and be taxed.

    Another option to this entire thing is to have a resident registration system. Other countries such as the Netherlands do this. When you move, you register with the municipality in that place. If no one is registered, it is considered vacant. I personally prefer the other way as it is less intrusive, but the registration system is certainly more effective.

    You can't claim a property as a rental property if it has no hope of earning a taxable profit.
    i'm not sure that's correct (is there an accountant in the board?)... i think you can declare it as a rental property, you just can't continue to deduct your annual losses - including any depreciation - if there is no reasonable expectation of earning a profit and the time frame for that can be outside of the current taxation year.
    We're setting ourselves up for trouble. If enough foreigners own property in a market, any change of regulations, ownership restrictions, etc. could create some sort of "international incident" that brings a foreign government into the picture to protect its citizen's interests.

    It's easier to start with strict restrictions and relax them, than to undo a situation created by lax restrictions.

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    Quote Originally Posted by kcantor View Post
    Quote Originally Posted by SP59 View Post
    Quote Originally Posted by Jaerdo View Post
    Quote Originally Posted by moahunter View Post
    ^what if your child is using it? or your mistress / mr? A lot of Canadians and non-Canadians purchase property in Canada for use by their children while they study, or by their mistress / mr, on the side. Your definition would catch those properties as vacant, when they are not.
    Then I suppose they would do well to charge them a nominal price, say $1, and avoid the tax by claiming that as rental income.

    There could also be a relatively simple registry in which the resident sends in a form and declares they are living in the unit that would otherwise fall through the cracks and be taxed.

    Another option to this entire thing is to have a resident registration system. Other countries such as the Netherlands do this. When you move, you register with the municipality in that place. If no one is registered, it is considered vacant. I personally prefer the other way as it is less intrusive, but the registration system is certainly more effective.

    You can't claim a property as a rental property if it has no hope of earning a taxable profit.
    i'm not sure that's correct (is there an accountant in the board?)... i think you can declare it as a rental property, you just can't continue to deduct your annual losses - including any depreciation - if there is no reasonable expectation of earning a profit and the time frame for that can be outside of the current taxation year.
    I think you are correct on this Ken. I'm just basing my observations on experiences of family members who have rented out property that had no reasonable expectation of profit. They started out claiming it and eventually Revenue Canada said they couldn't anymore as it was becoming clear that there shouldn't have been expectations of profit.

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