Analyzing BC Hydro data authorities have concluded that only around 1% of Vancouver’s houses sit empty and around 10% of condos. These figures are lower than often feared.
Full Vancouver Sun story here
Meanwhile CMHC also tries to get a handle on foreign ownership data Canada-wide. A core team of analysts at CMHC held several meetings to discuss how best to tackle the data gap. Researchers had initial meetings with agencies including the Canada Revenue Agency and Fintrac, CMHC confirmed. More on this here.
The question remains if we should tax non-Canadian owners more, like in London, or Singapore, or Sydney or Hongkong, on acquisition, while holding and on exit ?
What do you think ?
I suspect that if we try and solve this as a housing issue and not an income inequity issue we will just create another series of complicated rules that do little to solve the problem. Still I also would like better data.
I don’t know what’s really going on but I’m suspecting that this idea that super-wealthy foreign ownership is the explanation for high prices might not be the case, or maybe only one of several factors.
Maybe we need something like SARS to make this place less attractive. Or a program to help other cities become more attractive than they are now so we don’t stand out so much.
I am another who believes foreign ownership is only one of several price-driving elements. Too many people are looking for a scapegoat and tend to issue blame on one group for everything. Like very cheap mortgages don’t amount to a hill of peanuts.
The problem is that the methodology is flawed. A friend pointed out that based on their methodology, his condo would show as empty. A grow-op might also show as occupied, when it isn’t.
I can see a lot of people negatively caught in a poorly structured law. I live in a Condo and we have two units which are vacant. One owner’s father is not well and the owner went back to Hong Kong to help run his business for a couple of years. The other owner was sent overseas by his employer on an assignment for two years. Our condo bylaws permit a limited number of rentals and the maximum has been reached so both units are vacant.
I have a retired friend that now lives in a condo and goes south to Palm Springs for six months each winter.
Where do you draw the line?
Author
You don’t.
But you tax foreign ownership higher, on acquisition, while holding and on sales.
“The richest people in the world like to live in London or Vancouver.” Subheading of a story about how the very wealthy invest, in German national newspaper FAZ.
http://www.faz.net/aktuell/finanzen/meine-finanzen/sparen-und-geld-anlegen/von-alten-autos-und-jungen-frauen-in-der-suedsee-anlegen-wie-die-superreichen-14113342.html
If i had to bet, I think we’re going to find that foreign capital is a smaller factor in Vancouver real estate than everyone seems to assume. The larger, mundane, and far scarier reality will be that Canadians have been taking on increasingly speculative amounts of debt to get in on a housing bubble, mainly driven by an exceptional decrease in borrowing costs and emotionally driven by “now or never” thinking.
When rates eventually normalize, appreciation in the housing market will cool and the terrible opportunity cost of sinking so much of one’s wealth into a single asset will become increasingly apparent as inflation slowly catches up to prices over the course of many years.
There should be an online portal for fan-fiction about the Vancouver housing market.
Totally agree.
We also have artificial constraints on land through poor zoning laws. I’d have to nail the development industry too for design that resulted in the ongoing (but much quieter) leaky condo crisis. This also exposed the flaws in the Strata Title Act, and shenanigans in many strata councils to hide the rot, or to do cosmetic repairs and avoid basic maintenance or socking fees away to build up a replacement reserve.
Architects and developers should work on developing acceptable alternatives to party walls in rowhouses and townhouses (greater sound proofing, independent load bearing capacity …) that will allow people to purchase freehold and avoid strata.
These elements together conspire to create a shortage of housing types that are cheaper than detached homes, and prevent the exploration of ownership alternatives.
Indeed. I believe the absurdly low interest rates are probably the single biggest factor in house prices right now. Just watch what happens to prices when those rates start to rise.
I hear all the time “Why don’t we do what they do in London/Sydney/Wherever?” What I don’t hear is “Why don’t we do what they do in X because when they did that here’s what changed”. People are asking for better data; that’s the data I would like. My impression is that whatever they did in London, it didn’t affect much.
Right on. That’s the first task I’d ask for. I seem to remember a Pete McMartin column a couple of months back that did look into Sydney and found the effects of their anti-foreign ownership legislation wasn’t very effective in lowering housing prices.
Author
Prices indeed did not come down in Sydney
http://catallaxyfiles.com/2016/01/26/australian-house-prices-no-respite-for-new-owners/
despite crackdown on foreign ownership
http://www.theguardian.com/australia-news/2015/may/03/foreign-investors-face-crackdown-on-australian-property-purchases
Gas prices also don’t really change when the prices of oil goes down … price stickiness is a known phenomenon, and also an example of why you have to address housing costs before they jump the shark … after they do so, you can’t unjump.
This is why I think that the parallel market (ala Whistler, Vienna, Hong-King, Singapore, Amsterdam, NYC, etc…) is the best chance left for Vancouver.
Interesting methodology this report uses. In order for a dwelling to be considered unoccupied, it must be unoccupied for at least 25 days in each of June, July, Aug, Sept. The rest of the year doesn’t count.
So, if a dwelling is occupied for 7 days in June, and stands empty the rest of the year, it’s considered occupied…