USA Today joins the chorus:
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Where the world’s super-rich send residential prices soaring
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… vast injection of wealth is increasingly contributing to soaring home prices in places as far flung as London, Vancouver, Miami, New York, Panama City, Istanbul and Sydney.
“The international picture is very obviously what I call ‘flight money,'” said Matthew Montagu-Pollack, publisher of the Global Property Guide, an online resource for people looking to purchase homes abroad. “This money can be associated with anything from Chinese parents that have kids in college in the USA to those that don’t feel secure in their home countries,” he said. ….
He said it is difficult to quantify how much foreign investors are driving up residential property prices because of scant data, but that doesn’t mean it’s not happening.
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From 2008 to 2012, average house prices in Hong Kong — ranked as the world’s least-affordable city for housing — rose more than 117%, according to the Global Property Guide. The average property in London costs $750,000, a one-year jump of 19%, according to Britain’s Office for National Statistics.
“One of the biggest trends we are monitoring across pretty much all the markets we focus on is the ongoing globalization of demand for property,” Liam Bailey, Knight Frank’s global head of research, wrote in the firm’s 2015 report on global wealth. That means those with more modest incomes are driven out, he said.
“New demand is accused of hiking prices, as well as creating market access and affordability issues for local residents,” Bailey wrote. “The counterargument, that new investment flows lead to new supply in precisely the places where demand is highest, appears to be falling on deaf ears.
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Locally, Business in Vancouver covers the story: Million-dollar homes become symbol of growing inequality in Vancouver.
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Map and information source: David Ley and Nicholas Lynch, Divisions and Disparities in Lotus-Land: Socio-Spatial Income Polarization inGreater Vancouver, 1970-2005.
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I’m curious to see if the indifference expressed so far by the Liberal government in Victoria to this issue gets connected to the outcome of the transit referendum. It will, of course, depend on the Premier’s response in the event there is a No vote. But if the message is “Too bad, Metro Vancouver, there’s nothing we’re prepared to do about housing affordability and improved transit,” then the political ground might be ready to shift, seismically and generationally.
Worrying how two of those three “very low” in 2005 are locations of First Nations reserves, while the other has a significant proportion of Aboriginal residents. The fact that poverty is still so entwined with race shows how much more work there is to do on the reconciliation file.
Said that the nonsense from Demographia is still being misrepresented. Their “study” only covers English speaking cities so stating that those are the most expensive cities in the world is incorrect. As well, any study of affordability should include transportation. Otherwise, it is meaningless and shows urban areas being less affordable than they really area.
The “income” data is also highly suspect. Many folks, especially those with considerable assets or multiple homes, do not report all, or even some of their income in Vancouver. As such the “average income” figure is somewhat meaningless.
Politicians need to realize that expensive services, such as healthcare and education, which gobble up over 2/3 of the provincial budget cannot be based on PST and income taxes alone. Properties need to pay a far FAR higher share as many affluent immigrant, all non-residents and many residents pay low or no income taxes in BC yet consume these services for themselves, their kids and elderly parents !
Let’s not discourage immigration or foreign money here, BUT TAX IT HIGHLY ! MONETIZE IT !
“… the political ground might be ready to shift, seismically and generationally.” That’s hilarious. Do you mean the election of the New Dinosaur Party, but like the rest of us, find it too repugnant to type the words and have that attributed to your name? Look, people would mewl if the BC Gov’t were indifferent, or if they were interventionist. Matters not, because it is the local gov’ts – particularly the City of Vancouver (with some involvement of CUPE) – who are ENABLING unaffordability, and income disparity.
As there was no sign of such ‘shift’ in municipal elections in Nov 2014, there is even less chance of that in the re-election of the BC Liberals in May 2017.