Originally published at: http://boingboing.net/2017/01/05/chinas-anti-money-laundering.html
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Resident and renter in Burnaby just outside of Vancouver.
And this bubble cannot be deflated fast enough. It SHOULD have been prevented ten years ago. I can only hope we let the air out slowly enough for us to adapt economically and diversify away from real estate and construction and avoid disaster; too much of our local economy depends on it right now.
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Have been traveling regularly to Toronto for the past 7 years and it’s amazing to see one shiny new condo tower after another going up there - all with million dollar penthouses and lake views. All you need to do is look around and see the housing bubble just waiting to burst.
I have a friend who works at a large Canadian bank and around the 2008-2009 subprime crash in the US, he was gloating about how Canadian banks were largely unaffected because they weren’t involved with the shady lending like the US banks were. Ironical…
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It’s a bubble that needs deflating (preferably slowly to keep people from going underwater). Although from what I understand Toronto, while overpriced, hasn’t been impacted by the Chinese foreign buying frenzy like Vancouver has. There will be greater effects from these new rules on west coast North American cities due to proximity for middle- and upper-middle-class Chinese buyers, but it sounds like purchases in New York, Miami, Toronto, Montreal, London and Paris won’t change much since only super-rich Chinese who can afford to fly long distances first-class or by private jet and who can skirt the rules on wire transfers buy in those cities.
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Speaking as someone who just bought a house in Canada two years ago, I have concerns.
On the whole it’s probably a good move, but I still feel super nervous. I’m glad I’m in Montreal and not Vancouver - a fact which is pure good luck and zero actual planning on my part.
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Property assessments in Vancouver’s West Side have gone up 41% since last year.
There’s no way we’ve got a bubble here folks. Move on.
To be realistic though, assessed value usually lags actual value by a few years, and my understanding is that actual value has gone down in the West Side a little bit due to the foreign buyer’s tax implemented this summer.
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Too little, too late for Vancouver and environs, seeing as everyone’s housing assessments just came in…
The West Side, I could see. Mine went up 43% over last year, and I’m in fucking Coquitlam!
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I hope it works in the US as well.
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I wouldn’t be against a clampdown on foreign nationals buying homes in the US… I live in LA and am an average human and basically will never be able buy anything in this state unless my parents lend me $100,000.00. Shit, make it $1,000,000.00.
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Considering that this place in Toronto sold for C$2.68 million*, or more than 1 million over the asking price, anything’s possible.
*or just a smidge over 2 million in USD.
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I hear Bitcoin is the new Canadian real estate, with respect to China’s capital flight.
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You enjoy seeing people lose their homes?
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Stopping the Chinese money laundering will not see people loose their home. It may help both Canadians and Americans buy a home. The problem I have seen in California is that local buyers are always being out bid by Chinese investors bringing in their laundered cash.
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Do you honestly think that a bubble bursting, for whatever reason, won’t result in people losing their homes? It might not be the primary result, but it’s still a likely outcome.
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That is the part that will suck people who lose home as it is now worth way less than their mortgage. Not sure what is worse but as it is in places like Vancouver pretty much only the 1% can afford a house. Then again there will probably be a lot of affordable houses and condos on the market that had been sitting empty for years.
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Which I suspect (unless there are rules against it in Vancouver) will be snapped up by companies that rent or professional flippers, which is generally what happened after the 2008 crash in many places here (though it was a long process, which is still playing out in some places).
Honestly, this will keep happening until housing is considered and treated as a human right instead of a commodity on the open market.
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At the very least, investors who have been renting out their second or third homes will take all that rent money and, well, sorry family of four, you live in a car now even though you’ve been pulling your share of the load.
Seriously, it’s not like we literally didn’t just go through this seven years ago.
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