March 17, 2015

Quote: Better Angels

“Good public policy is best developed with our better angels than our paranoid demons.”

– Andy Yan

In McMartin’s column: No end to the rising tide of house prices.

Yan also makes this point:

“There are a number of tools in the tool kit to figure out what the problem is, and it’s important that we have the facts before us to understand what’s going on.”

Is it wealthy offshore buyers, or the vast transference of wealth from an older generation to a younger one, or just the desirability of Vancouver that brings 40,000 people a year here that is the main engine of rising real estate values here? Or is it a mix of all of them?

“Let’s start out with understanding the problem,” Yan said. “I think it requires a lot more work. It’s work that has to be open and transparent, and that’s key.

So why isn’t that work being done?  What specifically is the problem?  It’s not enough to say such data collection is opposed by those whose interests would not be served.  Who, exactly?  And what is their rationale?

That is the first place where openness and transparency are needed.

Posted in


If you love this region and have a view to its future please subscribe, donate, or become a Patron.

Share on


  1. I see a lot of commentators leaping to accuse immigrants (especially Chinese) of driving up the prices despite the surveys which show that locals are the majority buyers and Canadians make up 95-98% of purchases. it’s just not credible.

    I don’t know the answer either. Some possibilities/factors:
    * extremely low interest rates making large debt not only possible but attractive
    * externalized risk via CMHC insurance on houses less than $1mill with very little qualifications required. This gives mortgage providers a huge incentive to sell mortgages since they take virtually no risk yet get a lot of profits, which in turn makes it far easier and cheaper for people to buy at higher & higher prices
    * subsidies in the form of RRSP-loans allowing for larger down-payments at the cost of tighter retirement savings
    * media which hypes real-estate as a no-lose, guaranteed money maker. Buy now or buy never! Mortgage payments are a form of saving – why pay your landlord!
    * stock bubble which turned most Canadians off of investments, making real estate seem like the only remaining safe investment vehicle
    * longer mortgage terms (it was up to 40 years for a while, if I recall correctly)

    Other things to consider:
    * Vancouver isn’t alone. The average real estate prices in Canada as a whole are significantly above long-term trends, so any local factors (eg: Chinese immigrants) can only play a small role
    * Canada isn’t alone. Australia and other countries that dodged the 2008 housing collapse have also had their housing prices continue to inflate. (These countries also have very low borrowing rates.)

    And if we’re asking about high housing prices, the questions which should be asked but often aren’t are what can be done about it, and what will be done about it? If the bubble continues to grow it will be that much harder when it collapses, but which federal politician wants to deal with sagging housing prices in an election year? Worse, we’ve all seen how housing can affect a broader economy by watching the 2008 collapse but at this point Canada has a greater proportion of the workforce in housing than the US did at 2008 and we have a greater level of indebtedness. This implies that our collapse could be, if anything, worse than theirs. Soft landing? I wish. And once the collapse starts, there will be intense pressure to reinflate it rather than to try to find a stable, long-term price level. It could be very difficult to get honest answers and establish proper checks & balances when panic hits and frankly I think that the prices are so high that politicians and federal bankers are already scared to act.

    Someone needs to shed some light on this, but I think we need to look to academics rather than politicians right now.

  2. The following paragraphs from Guy Saddy in this month’s Vancouver magazine address the changing face of Shaughnessy.

    “Hands have been wrung over the impact of the new Chinese super-rich investors, a class many suspect – but with no official tracking process in place, can’t prove – are buying up this area yard by exquisitely landscaped yard. Most of what passes for evidence is far from scientific: a 2013 Sotheby’s report claiming that in the first half of that year almost half the homes they sold were to non-Canadians is about as close as we get to a verifiable foreign-owership statistic. Instead, we must consult other clues. Like, for example, the advertising that comes to our door.
    Some of the mail we get has dropped any pretense of catering to English-speaking residents, but most of the it still makes a show of inclusion. A Hudson’s Bay flyer featuring Estée Lauder cosmetics is in English and Chinese, for instance. But it’s the real-estate ads that are most plentiful. If offshore money, specifically from China, is not behind the changing face of Shaughnessy, then what passes through our mailbox is testament to the most spectacular misdirection of advertising dollars in the history of this, or any other, universe.”

    I also live on the west side of Vancouver. Ours is a more modest neighbourhood with relatively small lots and a smattering of shops and multi-family structures along the main street. It’s certainly not a destination for the super-rich of any nationality. Yet a high percentage of “junk mail” coming to our place is from Chinese realtors who include just enough English for us to contact them. The majority of For Sale signs in the area bear names that appear Chinese to me and we’ve have had several knocks at the door from Chinese realtors saying that they have offshore buyers looking for homes in the area. When told we aren’t interested in selling they suggest we could name our price, that 50% above assessed value wouldn’t be unreasonable.

    Maybe it’s all an illusion. Maybe millions of dollars are being wasted chasing only 3% of the market, but I highly doubt that. In certain neighbourhoods I think the Sotheby’s number of nearly 50% non-Canadian buyers is probably right and while that may still be only a small fraction of the overall Canadian market, it creates a ripple effect. Those who might otherwise have chosen Oakridge drive up prices in Champlain Heights and Lynn Valley. Those who had been eying Lynn Valley are then obliged to choose Burke Mountain or Morgan Creek.

Subscribe to Viewpoint Vancouver

Get breaking news and fresh views, direct to your inbox.

Join 7,303 other subscribers

Show your Support

Check our Patreon page for stylish coffee mugs, private city tours, and more – or, make a one-time or recurring donation. Thank you for helping shape this place we love.

Popular Articles

See All

All Articles