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The Foreign Buyer: Vancouver vs Victoria


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#1 Szeven

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Posted 25 May 2015 - 06:41 PM

Talk of placing restrictions on foreign buying in Vancouver has been in the news. Speculation tax or some other rules seem to be universally shot down (of note by the Liberals today in Victoria) likely because its been correctly identified that speculation really isnt the problem. People arent flipping presales the day after possesion.  In my opinion they are getting cash into the safe and stable county of Canada, but I dont know specifically if this is an absolute fact.  Its a familiar story to anyone in BC, or maybe even Canada, that foreign money (Chinese) has been taking over.  I guess things have come to a head and the conversation about racism, jealously and resentment is really getting going. 

 

I am wondering what peoples thoughts are about why this has not really happened in Victoria. Will there be a day when we say "wow I cant believe you used to be able to get a house in Uplands for under 2 million!!"?  There are simple answers like YVR vs YYJ, The ferry, UBC, overall size.  What are some of the other reasons? Will these reasons be a deterant to the rich foreign buyer forever?

 

Supplement to that, the Shanghai stock market is up 100% in a year:

 

https://ca.finance.y...001.SS;range=2y

 

The Chinese Yuan is also pegged to the USD, giving them yet another 15% bonus in the last year.

 

http://www.xe.com/cu...&to=CNY&view=1Y


Edited by Szeven, 25 May 2015 - 06:44 PM.


#2 LJ

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Posted 25 May 2015 - 07:27 PM

Well there was an article on the news a few days ago that the Chinese population has discovered Victoria. They don't like the price point or the gangs in Vancouver.

 

As soon as a few start buying you can be assured that there will be many more coming as well.

 

People on this forum complain that the housing prices here are too high now, whereas people in Vancouver think our prices are dirt cheap.

 

There was talk of a speculation tax, i.e. you had to own the place for 6 months before you could sell or you would be heavily taxed on it.


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#3 Mike K.

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Posted 26 May 2015 - 05:52 AM

There are a lot of foreign buyers here. Not as many as in Vancouver, obviously, but a lot.

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#4 pherthyl

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Posted 26 May 2015 - 06:24 AM

There are a lot of foreign buyers here. Not as many as in Vancouver, obviously, but a lot.

I believe this is graph is generated from the latest VREB survey

U3ErUkF.png

Edited by pherthyl, 26 May 2015 - 06:28 AM.


#5 Mike K.

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Posted 26 May 2015 - 07:08 AM

What's the date and source for the survey?


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#6 Jill

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Posted 26 May 2015 - 07:32 AM

And what would Vancouver's pie chart look like?



#7 pherthyl

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Posted 26 May 2015 - 07:47 AM

The chart is from greaterfool and based on what he says comes from the internal VREB survey which I believe is monthly and refers to the sales in that month.   

 

However, Marko said in march that the survey no longer asks where the buyer is from, so this kind of data may no longer be available going forward.   Ask Marko for the latest survey data on this question, he has posted it before.



#8 Mike K.

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Posted 26 May 2015 - 07:51 AM

We also have to look at who is a "foreign" buyer in Vancouver. Is it a permanent resident? Is it a landed immigrant? Is it someone who has no plans to live in Vancouver, but is securing real-estate? Is it someone buying property temporarily while their son or daughter goes to school in Vancouver? "Foreign" as far as the media's definition goes could be just about anybody who is not a native of Vancouver or who has not lived in Vancouver for the better part of a decade.

 

Anyways, from that article listing the VREB origin survey:

 

This pathetic blog will also remind the morons posting intolerant messages on the petition that there exists zero statistical evidence foreign money has any meaningful influence on the overall market.

 

 

So is he saying Vancouver's true "foreign" ownership is insignificant in the grand scheme of it all?


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#9 jklymak

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Posted 26 May 2015 - 07:58 AM

I think that the VREB survey uses the mailing address of the buyer.  Of course, a lot of foreign buyers will list a Canadian, and even local, mailing address.  



#10 Mike K.

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Posted 26 May 2015 - 08:02 AM

Exactly. It's a perfect setup. Buy two or three condos, hand them over to a condo management company for rentals, and you're all set. It takes absolutely no effort whatsoever for a foreign buyer to maintain their property or deal with renters.

 

Ditto for houses. More and more rental management agencies are handling the rental of SFD's. Five years ago you'd call Bill the landlord to fix your faucet, now you call Cornerstone.


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#11 pherthyl

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Posted 26 May 2015 - 08:26 AM

So is he saying Vancouver's true "foreign" ownership is insignificant in the grand scheme of it all?

 

Yes, but I wouldn't put much value in what Garth has to say.



#12 pherthyl

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Posted 26 May 2015 - 08:30 AM

I don't think foreign buyers are a significant impact on the Victoria market.   Vancouver for sure, but not here (yet).

 

Here's motivation from the VREB survey: 

 

What was the primary motive of the buyer(s)?

To enter the housing market (First time buyer) 93 21.3%
Wanted a larger home 53 12.1%
Wanted a smaller home 42 9.6%
Wanted to move to a different neighbourhood 57 13.0%
Wanted to be closer to family 26 5.9%
Due to a family reconfiguration 20 4.6%
It was a work-related move 16 3.7%
Buying a second home for use by family member(s) 17 3.9%
Buying a second home for future retirement 14 3.2%
Buying a second home for vacation use 7 1.6%
Buying a revenue property as an investment 17 3.9%
Relocation 54 12.4%
Other 21 4.8%
Total Responses 437 100.0%



#13 Mike K.

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Posted 26 May 2015 - 08:34 AM

Any of those could be motivators for a foreign buyer, especially

 

Wanted to be closer to family 26 5.9%
Due to a family reconfiguration 20 4.6%

Buying a second home for use by family member(s) 17 3.9%
Buying a second home for future retirement 14 3.2%
Buying a second home for vacation use 7 1.6%
Buying a revenue property as an investment 17 3.9%
Other 21 4.8%

 

That accounts for over 25% of sales.

 

And of those, in particular:

 

Buying a second home for use by family member(s) 17 3.9%

Buying a revenue property as an investment 17 3.9%

Other 21 4.8%

 

That's 13% of sales.


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#14 Greg

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Posted 26 May 2015 - 08:37 AM

Who cares if there are foreign buyers? I'm not sure xenophobia is the best method of keeping housing prices affordable.


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#15 jonny

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Posted 26 May 2015 - 08:38 AM

It sounds like the stats on foreign ownership suck and/or are non existent.

 

Anecdotally, there are all kinds of stories of perpetually empty homes in the LM, and Chinese nationals at open houses. Some homes have sold two times without anybody actually ever living in the place. How prevalent is this? Who knows.

 

My in laws are looking in town here and are seeing lots of Chinese nationals at open houses. They have been outbid on four different properties now (I have no idea who they were competing against).

 

I think it's great that Canada has open access to capital. Please foreigners, come invest in Canada.

 

What I'm not sure I want is for everyday working Canadians to be unable to afford to live here, or at least purchase property. This has already happened in Vancouver. One of the greatest things about Canada has been the low cost of living, but that has been seriously jeopardized by this housing boom.

 

I also don't want Canada to be seen purely as a save haven for international investors who just want to funnel money through Canada and have no intention of settling here or even residing here part time.


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#16 Mike K.

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Posted 26 May 2015 - 08:47 AM

I think it's great that Canada has open access to capital. Please foreigners, come invest in Canada.

What I'm not sure I want is for everyday working Canadians to be unable to afford to live here, or at least purchase property.

 

 

It's one or the other, though. If the whole world is shopping for a finite supply of something, prices will go up.

 

The problem is, and I've said this before on numerous occasions, while Victorians moan and complain about the high cost of real-estate in Victoria, once they've bought in, they suddenly want to benefit from the high cost of real-estate in Victoria and welcome foreign investment if it means their home value will rise. Even the most hardcore socialist will froth at the mouth when it comes to selling real-estate at a profit ...once it's theirs to sell and not just a topic to whine about.


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#17 Greg

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Posted 26 May 2015 - 08:55 AM

We need many more foreigners to buy condos in Victoria and not live in them. Entire condos full of people using no services but paying property taxes are probably the only way we can ever pay the sewer and bridge bills!



#18 Szeven

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Posted 26 May 2015 - 09:03 AM

Im approaching it from the thought process of investment. People seem to focus on buying houses with suites to pay their mortgages, but perhaps buying trophy properties with poor return is the way to go because prices of properties will stretch out to a flatter and wider curve.



#19 aastra

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Posted 26 May 2015 - 09:12 AM

 

We need many more foreigners to buy condos in Victoria and not live in them. Entire condos full of people using no services but paying property taxes are probably the only way we can ever pay the sewer and bridge bills!

 

But imagine the traffic problems.*

 

*New condo buildings don't benefit the community because nobody lives in them, and new condo buildings also injure the community by massively (and inexplicably) increasing traffic.



#20 pherthyl

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Posted 26 May 2015 - 12:15 PM

Any of those could be motivators for a foreign buyer, especially

 

Wanted to be closer to family 26 5.9%
Due to a family reconfiguration 20 4.6%

Buying a second home for use by family member(s) 17 3.9%
Buying a second home for future retirement 14 3.2%
Buying a second home for vacation use 7 1.6%
Buying a revenue property as an investment 17 3.9%
Other 21 4.8%

 

That accounts for over 25% of sales.

 

And of those, in particular:

 

Buying a second home for use by family member(s) 17 3.9%

Buying a revenue property as an investment 17 3.9%

Other 21 4.8%

 

That's 13% of sales.

 

None of those are specific to foreign buyers.



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