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CMHC releases report on foreign ownership

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Justin da Rosa | 07 Apr 2016, 11:17 AM Agree 0
The Crown Corporation released its latest Housing Markets Insight Report Thursday, which focuses on the foreign investment
  • James Oberian | 07 Apr 2016, 01:18 PM Agree 0
    ...I'm a YVR realtor and I don't believe that stat for a second. When I attend new-build presale realtor events 90% of the realtors in attendance are Chinese and when I take clients to view presale product 90% of the people there are Chinese also. It's truly massive amounts of Chinese money that is the prime mover fueling this crazy real estate frenzy. Everything trickles down from there (I'm aware there are other factors as well...). And it is also a question of semantics. What is "foreign ownership"? If you're defining it as actual "foreign nationals" then the figures might be that low. However recent landed immigrants or families with "astronaut" breadwinners are making up the overwhelming bulk of the buyers. But where's the money coming from? Was it made in Canada? No, for the most part it wasn't. In some way, shape or form it was 'foreign-derived". I live on the West Side of Vancouver and we have had a steady "demolish/build new 5000 sq. ft. structure" merry-go-round here for the last 4-5 years. And virtually 100% of those have been recent Chinese immigrants (most speak hardly a word of English), many of the homes are not lived in (except for maybe the teenage kids going to school here). So what are they? Are they "Canadian" or are they "foreign"? They're both. "Legally" they're Canadian because they have landed immigrant status. In fact they're foreign, because they've just moved here and the income for their lifestyle is derived from China - and the breadwinner works in China. There is very little interaction between them and the local community other than maybe the kids going to school. Another interesting note: there is a fairly recent trend here in YVR (prob Toronto as well) whereby payment for many expensive items (including cars) is done directly via a Chinese international bank debit card (Union Pay is the big one). There was a recent newspaper story here tracking those expenditures. The average debit card purchase on domestic cards was about $50 - on these Chinese debit cards? About $2500. The amount of Chinese money currently flooding Vancouver and Toronto (and Canada in general) is absolutely staggering - and that's the prime mover of this entire out-of-control real estate situation. How 'clean' is it and will governments do anything about it? Nope, it's helping to keep our economy from tanking...
  • The Hann Group | 07 Apr 2016, 02:06 PM Agree 0
    Hey James. Thanks for your " boots on the ground" perspective. I am surprised that the Fintrac requirements are not more closely scrutinized. We could use a little of that buyer frenzy here on the other coast. St. John's is tanking because of "oil economics". But we are at or close to the bottom, I feel, so there are deals to be realized. Send your buyers my way. Love to help. Larry Hann
  • K. K. | 07 Apr 2016, 02:17 PM Agree 0
    I am a local realtor too. The story above is very true or 90% true. I believe the government should do something about it. It's time for action !
  • Leslie Redburn | 07 Apr 2016, 02:28 PM Agree 0
    We are welcoming immigrants from China here in Canada, How on earth can we tell them what to do with their money.
    The first comment is right, it is a very thin line to discern what constitutes a foreign purchase.
  • | 07 Apr 2016, 02:52 PM Agree 0
    I is to late for our young people to purchase anything in Vancouver or almost in all of the municipalities you now need 1 million plus for a nice home that used to be 350K. there are to many people from other countries that are coming in with a ton of money that has been
    going on since the 1990 and now has reached that momentum that can not be changed, and land is running short and our own folks
    get to move way out or get stuck in a apartment a small one. We are to soft with everything and that large G on the for head is running
    the show so what is the answer let's ask our folks that make the laws and see what they come up with like the mayor of Vancouver
    let's have more bike lanes more towers so that we all ride a bike to down town from Cloverdale in November should be fun right?????
  • | 08 Apr 2016, 08:21 AM Agree 0
    The FINTRAC form certainly falls short of a bonafide screening process for money laundering. I also appreciate the boots on the ground perspective of the Vancouver scene. In London, Ontario we are also seeing a large influx of Chinese investors. We have some of the best deals of any major Canadian city.
  • HK | 08 Apr 2016, 01:48 PM Agree 0
    our govt is so easy on mortgage rules thats what the real estate prices driving crazy honestly any realtor put himself in the shoes of the buyer and go to the bank and see how much mortgage they qualify for not even half of the amount than there clients are getting approved for what is all this fraud the mortgage brokers are making fraudulent documents and getting the mortgages approved. even the foreign investors putting down 35% and getting the rest as mortgage from canadian banks with no income qualification because our system says 35%is enough for non residents does not need to qualify with income HOW ABOUT ON THE OTHER SIDE IF A CANADIAN RETIRED COUPLE GO TO THE BANK AND WANTS TO PUT 35% DOWN PAYMENT WITH NO INCOME I DON'T THINK ANY BANK WANTS TO APPROVE THEM FOR THE MORTGAGE BECAUSE THEY HAVE NO INCOME BUT THAT RULES DOES NOT APPLY FOR FOREIGN INVESTORS WHY? SOMEONE NEEDS TO WAKE UP
  • Carol Borg | 10 Apr 2016, 02:13 PM Agree 0
    James is bang on and CMHC has dropped the ball with the government's blessing
  • | 10 Apr 2016, 04:46 PM Agree 0
    Well said James. I am a Victoria Realtor and we are seeing a marked increase in Vancouver buyers cashing out and buying in Victoria.
    The Asian buyers are also discovering our city. The fear we have in Victoria is seeing the migration of shady Realtor business practises such as the recent story about "New Coast Realty". That can stay across the pond, thanks.
  • | 11 Apr 2016, 11:08 AM Agree 0
    Seconded also! As a 10 year Toronto and York Region realtor, I also see it - and India and Pakistan also doing as the China investors doing, in my experiences.......
  • TorontoRealtor | 12 Apr 2016, 08:22 AM Agree 0
    If we believe the statistics put out by the CMHC and our day to day observations don't match the scenario presented, then there is another explanation for what we are seeing. Namely poor immigration policy. The now defunct 800k investment scheme to buy immigration is gone. Who was watching as we let thousands of so called immigrants in. Watched as they paid low taxes, consumed a high amount of social programs? Used Canadian loopholes to get free education for their young and free medical care for their old. When Hong Kong annexed with China a large amount of cash left the country. It has been the cause of market disruption the world over. Our immigration policy should never had a straight buy-in program. Our Residential purchases should be monitored and foreign investment vehicles should be taxed accordingly to keep the balance in favour of local residents. If locals earning a median wage cannot afford to purchase property then you know somewhere the system is broken. The task is to find it and fix it.
  • | 14 Apr 2016, 08:16 AM Agree 0
    Come to Oakville Ontario. 80% of all transactions in luxury properties are involving Asians.
  • | 15 Apr 2016, 11:20 AM Agree 0
    Too bad we can't export condos to China. In Toronto, if it weren't for housing construction, there would be no jobs. From an economic perspective we have really painted ourselves into a corner. Housing inflation is about the only "wealth" we are able to create. Of course, this prosperity is an illusion. Real estate inflation is not derived from productive activity, but from allowing foreign money to displace ours. We have become a 3rd world country. Foreigners have become our masters. It really is a pitiful situation.

    Some of my clients have gleefully sold to Chinese buyers at outrageous premiums, thinking they will rent for a year or two before getting back in the market. Feeling so rich, they sit back and wait. In a year or two they realize they have become paupers.

    The apparent "prosperity" caused by real estate "wealth" is very dangerous. It fools people into thinking we can close our factories and offshore our jobs, with no negative consequences. As we de-industrialize we are become more like a banana island, dependent on rich foreigners for crumbs, while we live in shanty towns further and further away from the nice resorts.

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