dbd33

That has to be a ridiculous understatement. Almost everyone in this room owns a house and less than 10% of the people are cradles. I would guess that more than half of the houses sold in Toronto go to people who have a foreign nationality; including most of the posters here.

Engineer_abroad

I believe then they refer to foreign nationals they mean non-Canadian PR/Citizen not necessarily those with other passports/dual citizenship.

http://vancouversun.com/news/local-n...iously-thought

SchnookoLoly

Vancouver Realtor probed for 'how-to' email on avoiding new property transfer tax - British Columbia - CBC News

Shard

Agree with Engineer on this. A balance has to be struck between the needs of city inhabitants (access to housing) and the benefits of foreign investment. Taxing occupation or nationality is a clumsy instrument, no doubt, but permitting a huge asset bubble to build and burst is imprudent.

dave_j

I deleted this because my maths was a bit off.

JonboyE

In BC anyone over 55 can choose to defer their property tax, at a reasonable interest rate, until they sell the house or croak.

dbd33

That's a good idea.

Edo

Yep, but hopefully shortly after a couple of cases of PRs/Citizens screwing up the trust and claiming such properties to be their own would deter the foreign buyer from trying that shortcut again in the future.

dave_j

On the face of it these figures suggest that the impact of foreign national purchases should be quite small, a mere 10%. However, like many statistics, they provide only a limited snapshot into what is actually happening.

We would also like to know:
a. What proportion of these foreign national purchases are from those buyers resident overseas and what from those resident in metro Vancouver.
b. What proportion of these purchases were from foreign buyers with no upward chain to service.
c. What the average chain length was during the snapshot period.
d. How many new builds became available during the period and how many were purchased by foreign nationals.

If we knew these facts, and others, then we could make some reasoned judgements and understand the magnitude of the effect that foreign nationals have.

(a) and (b) are self evident and tell us what proportion of buyers do so for mainly for the purpose of investment and therefore, due to the high rates of self fulfilling price increase, what proportion has the major impact. This is important at the present time as the Loonie is low and some nations, China specifically, has high numbers of wealthy individuals looking for safe havens for their wealth and may be prepared to pay high premiums.
(c) is important because it tells us what actual proportion of transactions involve chains that most likely include just 1 foreign national.

For example, if the average chain length is 4, ie the sale of 4 houses is linked to one chain, then the 9636 transactions involve the sale and purchase of 9636/4=2409 chains and if the chain length is 5 then 9636/5=1928 chains and so on.
Since we are not told what a and b are we must make assumptions. Let us assume that 20% of all foreign nationals buying houses live here in BC and are not super rich and do not buy for investment purposes then this means that 0.8x935=748 transactions are by foreign nationals for investment purposes.
So the real influence of foreign national purchases is not 935 out of 9636 or about 10% but 748 out of 2409 = 31% or more likely 748 out of 1928 = 39%.

However there is a flaw in this argument that the acute reader will have grasped at once. 'Ahh' I hear him say 'Many of the foreign national purchases are of new build property, and these have no chain'.
(d) will tell us what proportion of new builds are taken out of housing stock due to foreign buyers.

In many ways this compounds the problem because it limits the number of new homes available and forces anyone wishing to buy a home to compete at a high level and has a similar effect. In some way this transforms a normal BC resident buying a house into a pseudo foreign resident for our purposes because their purchase prices have to be higher in order to compete with inflated foreign prices.

I would argue that the influence of the 10% foreign buyers affects all 100% of transactions made throughout the metro Vancouver area and anyone who lives in the Fraser Valley will have observed this. 10% doesn't sound very much, but in relation to the housing stock availability it is much too high.

Unfortunately, the information given out is insufficient to make any meaningful deductions, but we can all observe the symptoms of the illness.

JonboyE

I met with some well p*ss*d off realtors today. And I could not get to speak with a lawyer anywhere as they are all madly trying to get deals completed before the tax kicks in.

Yorkiechef

Realtors agreeing to this would be like Turkeys voting for Christmas. They have an interest in the price being higher and turning over regularly, they get paid a % for every sale.

No wonder they are pi55ed off.

Perhaps they need to retire on what they have stacked in the bank.

Davita

Seems this forum is bugging realtors but I suggest it's the BC Real Estate Boards where insults and abuse should be placed.
Even the Provincial Gov't has indicated it may remove their accredation to self-regulate as they are so fragmented.

https://www.recbc.ca/2016/06/governm...te-regulation/

I immigrated to Canada in 1990 as a retiree so never worked. I became bored and needed to stimulate my mind, so I did the on-line realtors course conducted by UBC.
It was a lot harder than I thought as BC realtors are rigorously examined on mortgage rules and real estate law...my brain was sure shaken out of its retirement and I was not even intending to become a realtor.
The other examinees at the final exam at the University thought I was some sort of weirdo for volunteering, and paying out of my own pocket for this course....but I said I did it for an education tax deduction I'd learned of by doing the H.R Block course on Canadian tax law...they then thought I was smart...

dave_j

I think you have to accept that the average canadian buys and sells through realtors for five main reasons.
1. It's how it's alaways been done.
2. They haven't realised that you can approach buyers and sellers quite easily by simply advertising yourself.
3. It's so easy to offload the job to someone else.
4. It's an expected part of life here that you buy services and have to pay for such service, eg tips etc.
5. If you don't then nobody spreads the word that you ahve a house to sell and realtors certainly won't point anyone in your direction.

A flier came through my door the other day offering a free valuation. As it was free I invited the guy around. Of course he was interested in selling the place and all I wanted was his assessment of it's worth. But while he was here I quized him on the system.

Most, or all of you will already know what I'm going to say and will probably feel much the same as I do.
When I sold my house in the UK prior to coming here I commissioned an estate agent to sell it for me. He charged me 1% of the selling price. In return he measured the property, drew up a ground plan, wrote a description, uploaded it to Rightmove and displayed the add in his local and spinoff offices. He responded to queries and showed prospective clients around the house. In addition, since the sale was deferred a few times I received much advice before the final sale went through. In short he did what realtors in this countryu do, except rip me off too much.

The system here charges a great deal more and it's very probably corrupt to the core because humans tend to be greedy. In this case it's in the interest of seller and both realtors that the selling price is as high as possible since both realtors take a % of the selling realtors fee so your buying realtor works against the best interests of the buyer. In addition, where the selling realtor can persuade the seller to sell to a 'mate' for a low selling price, ie rip off the seller because he'll be valuing it anyway, then unscrupulous realtors can flip the property quickly and pocket the profit. They can screw the buyer and the seller depending on whether they're stupid buyer or innocent sellers.
And who polices this system? Which assembly of upright independant citizens ensures that the poor seller or the squeezed buyer isn't taken to the cleaners.. well the the Real Estate Board of Greater Vancouver does, and who is on the Real Estate Board of Greater Vancouver, well REBGV Board of Directors | Real Estate Board of Greater Vancouver will tell you, but you won't be surprised.

I remember prior to the crash of 2008, watching the TV antics of the 'loadsamoney' investment bankers/gamblers and being disgusted by their greed. Enough was apparently never enough. We apparently see similar corruption happening here within BC. The never ending fliers that pour through the post are evidence that the realtor gravy train is up and running and they're all trying to lick up as much as possible before they bring the system down.

And how will they do this? Inflated prices, low interest rates and ever rising property prices... ring a bell? In the US it was selling to people who couldn't repay the debt, in canada it'll happen when interest rates rise. Might not be this year, but it will happen.

withabix

In Metro Vancouver, supply is a long way from meeting demand.

The market might stutter a bit, maybe prices will drop 20% (that would be back to about January 2016 levels), but supply is maybe 2-3 years behind the curve in terms of meeting demand in terms of re-zoning and Permitting timescales, plus build time.

New builds are sold out for occupancy in 12 months' time.

There will be legal challenges to this anyway, as well as reciprocal retaliation.

Davita

If you mean the 15% tax on foreigners purchasing property in Vancouver...what recipricol retaliation did you have in mind?