These purchases aren't usually reflected in the stats. It is more unusual for non-residents to end up owning property with no guarantees they can use it. Same in Australia and Vancouver.
He describes it as a cultural exchange as parents in China want to help him be successful. He also says that in China, corrupt banks make money disappear all the time. So it makes sense to me.
https://ca.finance.yahoo.com/news/immigrants-canadas-highest...
Even without students the numbers are pretty high comparatively. In contrast, "of all the metropolitan areas in the [United States], Miami had the highest rate of immigrant homeownership (26 percent), as well as the largest percentage of immigrants in its population (41 percent)."
https://www.nytimes.com/2018/11/15/realestate/immigrants-and...
And it's an great question why so many cities fail to take these steps. My guess is that inertia wins partly because it becomes politically inexpedient to blame immigrants for anything once cities have a certain percent of non-native residents, and partly because rising home prices make older homeowners happy while pushing the marginalized and disaffected younger voters into other ridings.
Preventing adequate construction is in the financial interest of current homeowners -- it inflates their property values due to artificial scarcity.
This won't change as long as city planners answer to those elected by existing residents.
People just can’t accept there’s a ton of people who want to live downtown than ever before (reverse ‘white flight’) and the housing market is incredibly constrained in supply for a ton of other reasons that can’t be blamed on foreign boogiemen.
Not to mention those small percentage of foreign investors are making regular Canadians wealthier than they ever would be normally which goes right back into the economy which creates jobs and industry for other Canadians. The solution then is increasing supply or not expecting to live in a big place whole living in expensive downtown areas, not whining about demand.
Valuations are set at the margins, so single digits percentage of ownership could easily translate into a huge change in prices if the Chinese have different criteria for buying a house (which they obviously do since the goals - asset protection vs. a place to live - are different).
Vancouver housing prices are falling, largely due to the tax on empty homes and a large retreat in foreign buyers. Whether it was the Chinese or domestic buyers, people buying Vancouver real estate to park assets (as opposed to live in) had a large impact on prices.
It doesn't mean the money's coming from China - it could be coming from the USA or other countries with high incentive for tax evasion. Or it could be coming from money laundering from large scale organized crime. (RCMP did a fairly thorough trace and report on this not too long back)
Speaking as someone who moved away from Vancouver BC as it became unaffordable. And my income is higher than most Canadians.
The "Dirty Money" series breaks this down further, but a not bad link to stories is : https://www.cbc.ca/news/canada/british-columbia/laundered-mo...
For example if you're looking at new condos in Richmond, that was 23% being purchased by non-residents.
https://www.cbc.ca/news/canada/british-columbia/vancouver-no...
Additionally the government only started collecting data around foreign ownership well after the steepest part of the bubble curve was over so who knows what the actual sales numbers were when the prices just started rising.
Do you anticipate housing prices will weather such a recession which many predict is looming on the horizon? That would be a first.
The FED seems ready to drop rates at the first signs of economic bad news and consensus is that it will this year. Party will go on until inflation skyrockets, no idea when though but I doubt it's too soon. (not before elections)
Did it solve the housing issue? Not entirely, but it sure helped a bit.
How healthy and legit is an economy if this is the case? The same can be said of a Ponzi scheme, yes.
It seems that the change of the rules effects the current winners the most. And thus the unsustainable persists...until it doesn't.
Most of the people around here immediately buy something as soon as "they can afford it" - with credit. I find it hard to believe that these same people would suddenly hoard cash.
Wikipedia says
The Great Depression was regarded by some as a deflationary spiral.[35] A deflationary spiral is the modern macroeconomic version of the general glut controversy of the 19th century. Another related idea is Irving Fisher's theory that excess debt can cause a continuing deflation. Whether deflationary spirals can actually occur is controversial, with their possibility being disputed by freshwater economists (including the Chicago school of economics) and Austrian School economists.
It sounds more like a theoretical concern than an immutable law of nature to me.
No, it doesn't. [0]
> There is absolutely zero historic record to support that.
Yes, there is. [1]
> Until economics embraces reality it's foolish for the rest of us to hold a false god so high.
Sorry to be kinda blunt here, but I'd like to appeal to you to try to maintain a higher standard of discourse on HN.
Ironic. Your reply does more to support my point than your own.
Unless you are already rich, it makes sense to get a T1 and head off south to Seattle where the houses are still pricey but the salaries are much higher.
When China's bubble finally pops, it will be Japan 2.0+ for Vancouver.
Increased density allowances continue to prop up lot values on single family homes, which allows homeowners to not be underwater but also increase housing supply when they are torn down and duplexes/condos are built in place.
Overall I feel like most people are happy with the outcome thus far.
At the moment the high price of real estate is putting a lot of strain on almost every other sector of the economy: tourism (cheaper to visit other beautiful places like Banff), tech (it's expensive to attract talent with high cost of living), services (similar deal). It's also driven out a lot of younger families which can have delayed impacts on the economy.
On the other hand, it's been great for the construction industry, tax revenue, and infrastructure investment. The high price of land has also justified investments in density which will result in a lasting increase of land value even if the market cools.
There are also a lot of people who have sold their expensive homes and taken the money to cheaper areas, like Victoria and Nanaimo, distributing the windfall a bit.
Some will win some will lose and I have little sympathy for those who entered the market in the last 5 years expecting it to keep increasing as it has.
https://www.cbc.ca/news/canada/british-columbia/bc-finances-...
That being said, modulo some extreme reconfiguration of Canadian society, workers need someone to pay them. I think we should be _very_ cautious about unduly alienating capitalists in an indiscriminant manner.
So long as population is growing we'll always need more homes, regardless of whether it's a good investment or not.