A History of On Reserve Housing
This is a guest post by Dr. Sylvia Olsen. I recently attended a talk organized by Civil Engineering students at UVIc on the topic of housing on First Nations reserves in Canada. Listening to Sylvia’s passionate and insightful summary of her PhD research opened my eyes to the root causes of the current crisis and the appalling history of the system that created it.
Dr. Sylvia Olsen presents a paper on her PhD dissertation titled “Making Poverty: A history of government housing programs on reserves, 1930-1996.”
Sylvia currently teaches on-reserve housing management at Vancouver Island University. She has lived on Tsartlip First Nation for most of her adult life; her children and grandchildren continue to live in the community. She has worked in the field of on-reserve housing for decades in many capacities from housing and construction management, to curriculum development and policy analysis. Sylvia believes there are two fundamental principles involved in finding solutions to any problem: first, you must understand the problem and second, the intensity of the solution must match the intensity of the problem. Her work enables Canadians to understand on-reserve housing in a new way. Her hope is that it will help shift public impressions and influence policy going forward.
Thanks Introvert, very interesting.
JJ, I agree that this doesn’t stop the money laundering problem entirely, but other countries have put limits on foreign capital – Canada needs to do the same. This whole racism claim, though, is insulting to Asian Canadian citizens who live in Vancouver. It’s about Money, not racism. (Thanks Hawk for the link to the Province Wheeler Dealer article)
A lot of the people involved in Housing Affordability for Local Taxpayers (HALT) – who support a focus on taxing foreign investment – are of Asian descent – and they say that people who claim racism are trying to silence the truth.
Listen to their words:
http://www.theglobeandmail.com/real-estate/vancouver/citizens-group-rises-up-for-vancouver-real-estate-reform/article30937362/
“Ms. Sung says people should not be silenced by charges of racism because they take issue with massive inflows of global capital, or question signs of tax evasion or money laundering.”
“I’m kind of surprised, because I thought we had gone beyond [the racism issue],” says Ms. Sung. “People are not really understanding the issue, the ones that are bringing this up.”‘
“This past week, Mr. Fung also addressed media reports that said the blaming of offshore buyers for contributing to the crisis was racially motivated.
The idea that people oppose foreign real estate investment because of racism is based on the premise that those who feel they have the most to lose are of European and British descent. But it disregards the diversity of people who’ve invested lifetimes here, who also feel they have a great deal to lose. They see the situation as an imbalance of power, of government catering to the monied class and ignoring its tax-paying constituents.”
(btw, TripleA, Google Translate can now translate Chinese characters)
Probably not. Florida is looking for investment still. Much of the SE US East Coast and rust belt have not recovered from the 2008 recession. People are renting rather than buying so investors are welcome. Japan is courting foreign investment given its declining population and approach to aging construction/land value. If you study international RE you’ll discover that the conditions for regulation for foreign investment are economy-dependent. BC has a combination of factors that make it both desirable and conducive to government regulation. Australia and NZ are similar imo.
Perhaps the 15% tax on foreign buyers in Vancouver will spur greater foreign interest in Victoria’s real estate market.
You do not seem to realize this tax does not apply to Chinese immigrants, it applies to foreign buyers and corporations no matter where they come from.
Couldn’t this lead to relatilation from other countries? “Want to buy in Florida….15% tax for foreigners” 🙂
JJ – all of BC? Really? When you’ve quoted the Charter and I’ve directed you to section 1? How would an all of BC application stand up to the Charter do you think?
I believe that in Vancouver it has been based on the stats. Of course approval ratings for the BC government are an issue, but that does not mean that the PTT is not going to have an effect. It probably will imo for those who do not wish to become investor class immigrants but want to invest for profit. How many? We’ll see.
I agree that the fact that 90% of Quebec investor class immigrants do not remain in Quebec is an issue. Quebec is definitely gaming the system. Whether the folks ponying up 800,000k for permanent residency in Canada through this program are the same as those driving the market in Vancouver would be good to know – But this is all perfectly legal still. However, if you are a permanent resident I believe you should not be subject to the 15% PTT. The remedy for abuse of the system is in how the Income Tax Act is applied and enforced. Worldwide income needs to be reported and income tax collected.
If you have a better explanation post it rather than Chinese characters that you know most Canadians cannot understand. It does not add to your credibility. I do know how to read enough to understand that you feel that those that believe the PTT will make a difference are media pawns – time will tell.
Study your history…
Actually You don’t get it. Period.
The Liberals are concerned coming into Election Campaign mode that their approval rating is flatlining.
Todays announcement is the cheapest She-Ra band-aid available to make a big splash will absolutely minimal effect. Until the Quebec Backdoor is closed nothing will change.
古老的中国谚语说，如果你相信媒体比你他妈的傻
This is faulty legislation that is designed to be challenged and to fail in court and then BC will have to pay all those investors back the 15%.
It doesn’t solve the money laundering problem. All this does is allow the Liberals time before the next election. I absolutely do not consider a tax as a way to stop black money entering into BC or in this case one city in BC.
I have been very clear that the only way to stop black money is through transparency in transactions for ALL of BC.
Um, no. The message is that houses have appreciated beyond affordability in Vancouver creating a housing crisis for Canadians. This is not targeted at Chinese buyers. This is targeted at protecting Canadians’ access to housing. I agree with it.
It does not matter where the money is coming from, it matters what the impact on citizens is. This type of legislation has been implemented in many countries because the issue is affordability for citizens It doesn’t matter who is buying, the protection of Canadian interests is the “target”. You just have it bass akwards JJ.
Not the ridiculous red herring comparisons. It is embarrassing really. Look, logic is, well, logical. This means you take a concept and really look at it instead of jumping to a hyperbolic weird conclusion that suits the point you are trying to make. This is not a race issue: this is a Canadian issue – one you have complained about endlessly and hyperbolically in fact. And now it is ridiculous, imo, that you are stating it is a race issue.
Here is my take. I don’t care who is buying, there should be rules to will ensure Canadians who earn less and pay taxes here and are citizens are able to continue to afford living in our province without moving or being relegated to a basement suite with their kids for life. Metro Vancouver is priced out of the reach of the average family. Some of that is maybe okay, but the pace is not locally sustainable. You really should be ashamed of yourself for taking the position you have given your past positions on house prices and “hot Asian money”, which, imo, has been used as a discriminatory term.
Fact of the matter is that loads of Canadians of Asian descent are feeling this too. If you are second or third generation Canadian of any ethnicity how can you compete based on Canadian wages and taxes? You cannot and soon there will not be a labour force to run the city. Heck, I think I read that only one staff member at the City of Vancouver actually lives in the City…
JJ how many cups of coffee have you had today? I admire your ability to occasionally take a position on an issue and then just ride it out, no matter where it takes you. All in the name of keeping Totoro busy.
You do realize Totoro that while the government says foreign investor this is a response to target a specific nation. The government hasn’t been speaking about the Greeks or South Africans this legislation is in response to Chinese buyers.
If you’re Chinese and want to buy in Vancouver we are going to charge you another 15%. The message is clear the City of Vancouver doesn’t want Chinese. That’s the message. Now that the thin edge of the wedge has been planted. And this doesn’t work to slow house prices, how about covenants on properties in the City of Vancouver that you can’t sell to Asians. What will be the next step?
Study your history.
Well said Nan. This political correctness BS has to end. Every other country doesn’t have a problem with preventing the pillaging of their communities by imposing foreign investment laws. Neither should we.
non-fungible…great word, had to look it up. I was thinking that given the growth in the damp corners of my rental house, my place is pretty fungible 🙂
thanks for your point of view Nan
I think the new tax is the good first step in the right direction.
Canadian rights are for Canadians. No where in my Canada does the government favor the interests of wealthy non-Canadians (or even care about for that matter) over those of Canadian citizens. Which brings me to my second point:
The system is currently unfair…for Canadians. I have mentioned this many times but in what world is it fair when hard working tax paying Canadians have to compete against completely untaxed money made offshore? 15% isn’t high enough, when it gets close to 50%, we are getting closer (because that is what they would have paid if the money they are importing was actually earned in Canada).
I would even go as far as considering an outright ban on offshore residential real estate ownership altogether. Residential real estate is a non-fungible national resource. It is the governments responsibility to make sure that Canada’s national resources are put to use for the benefit of Canadians and Canadian society. It is not in Canada’s best interests to require that working Canadians compete for shelter so they can go to work everyday and raise their families with millionaire offshore investors chasing speculative gains or even people that just don’t live here. It is patently ridiculous in fact.
I am hopeful that the binary transition from the perception that “rules that discriminate against foreigners are wrong because they are racist” to a new perception that “foreign investment in residential real estate is actually bad and makes life worse for Canadians” in Vancouver will result in a perpetuation of that perception that results in a flood of new laws that regulate foreign investment in residential real estate all over Canada.
Oh god. You do not seem to realize this tax does not apply to Chinese immigrants, it applies to foreign buyers and corporations no matter where they come from. Chinese immigrants, or any immigrants to Canada, are not foreign buyers because they are no longer foreigners – they are permanent residents – or what used to be known as landed immigrants. Permanent residents are exempt from this extra tax only FOREIGN NATIONALS pay it.
I have no clue as to why you complain about Chinese money laundering in Vancouver and wealthy foreigners impacting the market and the lack of regulation on foreign corporations ad nauseam and yet when something is done about it you call it discrimination.
It is not the Vancouver Charter that is amended for the PTT – that is provincial property tax legislation. The Vancouver Charter will be amended for the vacant homes tax which is a municipal property tax.
The province is free to impose an additional property transfer tax where there are valid policy reasons for doing so.
And no JJ, you cannot just ban all Chinese immigration because that would be discriminatory unless there were some valid policy reason for doing so. Hard to imagine one imo – head tax is a red herring argument here. Again – please go read section 1 which provides a limit on rights where there is a justifiable purpose and the law is proportional to the purpose.
There is, imo, a valid policy reason to try to curb astronomical appreciation pricing Canadians out of Metro Vancouver where it has been clearly linked to foreign ownership – as the recent stats demonstrate. If it happens in other cities like Victoria they’ll have a reason to impose it here too and they’ll know because the government is now collecting stats.
This type of tax is nothing new. In PEI if you are not a resident you pay double the property tax – that applies to Canadians – and that stands up because of the impact of outside ownership of “cheap” PEI land on PEI residents ability to own a home or have an affordable rental. See where I’m going there with section 1?
Kelowna and rest of Okanogan would be way better deal for foreigners than here and only an hour flight from Van.
The ability to easily adjust the legislation to cover Victoria would be a big caveat for agents to have to tell their foreign money smugglers that it could happen any time of the process. This might scare them all off of BC and push them elsewhere.
As Christy says more laws are coming as she doesn’t want NDP to have any leverage heading into the election. This may well be known in the history books as the Christy Crash.
Good question. The answers are here: http://www2.gov.bc.ca/gov/content/taxes/property-taxes/property-transfer-tax
And, unfortunately, imo, it applies to ALL properties registered after August 2 so a foreign entity (individual or foreign corporation) with a current accepted offer that closes after this date will pay a huge penalty they were not expecting. That seems unfair to me.
A lot of the loopholes have been closed:
The additional tax applies on the foreign entity’s proportionate share of any applicable residential property transfer, even when the transaction may normally be exempt from property transfer tax. This includes transactions such as: • a transfer between related individuals • a transfer resulting from an amalgamation • a transfer to a surviving joint tenant • a transfer where the transferee is or becomes a trustee in relation to the property, even if the trust does not change.
It is administered through an additional property transfer tax return. Very difficult to avoid as the transfer documents require Canadian identity verification through a third party of the names of the owners – usually by a lawyer. Canadians now have to provide their SINs for the PTT process.
Failure to pay the additional tax as required or purposely completing the general or additional property transfer tax return with incorrect or misleading information may result in a penalty of the unpaid tax plus interest and a fine of $200,000 for corporations or $100,000 for individuals and/or up to two years in prison. The penalties apply to anyone who participates in tax avoidance.
Then Totoro you could ban all Chinese immigration under your interpretation of our Charter. Unlike you, I don’t consider all Chinese immigrants as criminals that should be economically penalized so that they can not live in one city of our country.
Or how about we just bring back the Chinese Head Tax.
“Responding to anti-immigration sentiment in British Columbia, the federal parliament passed in 1885 the Chinese Immigration Act,[4] which stipulated that all Chinese entering Canada must first pay a $50 fee,[5][6] later referred to as a head tax. This was amended in 1887,[7] 1892,[8] and 1900,[9] with the fee increasing to its maximum of $500 in 1904.[6] Not all Chinese arrivals had to pay the head tax, however; some were presumed to return to China after from Canada because of their transitory occupation or background”
Most so called experts in the news believe Victoria will see an increase in foreign buyers. Helps has been told if this happens. The legislation will be added to other areas. See seems happy with this. She is happy to see what the impact is in Vancouver first.
totoro, maybe you can help me understand. Is this government going to amend the PPT Act with some kind of statement like “Oh, and if you’re not a citizen or a permanent resident (or a landed immigrant?), Vancouver will collect an addition tax of 15% on your purchase price”.
doesn’t this set up a dangerous precedent that would essentially allow the province to decide who lives and dies in real estate as in “Oh and if you live in Tofino, you will now pay a tax on the sand between your toes (it’s property and it’s transferring )”. How do they enact a provincial law that only applies to one city?
Marko pointed out the Vancouver Charter, thanks. So will they amend the PPT to say that they can direct, from time to time, any municipality to collect extra taxes and amend the Vancouver Charter to reflect council’s duty to comply with provincial directives? i don’t really see how all this can be done by August 2.
You have a poor understanding of the Charter. Read section 1. The recent stats on foreign ownership do, imo, provides some justification for the tax. To be blunt, differential treatment of non-Canadians is the bedrock of our immigration system.. Not everyone is treated equally as laws balance rights.
There could be a lot of money laundering deals as well as other foreign buyers not completed that will end up back on the market if they only smuggled just enough money to complete. There is no grandfather clause. All deals in the works now are subject to the tax.
Metro Vancouver covers North Shore and out to Coquitlam as well as Surrey. Don’t see how it’s great news for them.
They`re not necessarily standing in Canada.
So now we can discriminate against foreign purchasers in one city in Canada.
Equality rights are at the core of the Canadian Charter. They are intended to ensure that everyone is treated with the same respect, dignity and consideration (i.e. without discrimination), regardless of personal characteristics such as race, national or ethnic origin, colour, religion, sex, age, or mental or physical disability, sexual orientation, marital status or citizenship.
In my Canada, once you’re standing on Canadian soil you are protected under our charter of rights. One set of rules for all. Because that’s what a democratic and civilized nation does. It extends the umbrella of protection to all. It’s what makes us Canadian.
I think I’ll jump on that Central Saanich sale right away.
The home was purchased in August 2008 at $599,000. Yet the agents under listed the property at $569,900.
The home was listed for 4 days with this caveat “Offers if any, will be reviewed Saturday at 4”
Under priced and under exposed to the market to entice as many offers as possible in 4 days and sold to an out of town buyer. However the last sale of a similar home to sell in the neighborhood went for $710,000 after being exposed to the market for 28 days. So maybe it was the vendors who lost out this time.
The delayed offer/blind auction doesn’t always garner the highest price. I think it would be difficult to build up excitement for any property outside of the core to make a delayed offer / blind auction successful.
I’ve spoken with several agents who have been selling for a long time and none of them would suggest the delayed offer to their clients. They would only do a delayed offer if their client insisted on it.
There are so many ways that agents can find themselves in court years after the sale because of imperfect advice that they may have given their clients. Unless your client insisted on this shortened market exposure, why would you do it?
Also, what kind of provincial legislation can only apply to a municipality?
Vancouver Charter.
This is good news for the North Shore, Surrey, and everyone outside of Vancouver proper.
We’ll probably end up with a few extra foreign buyers as well in Victoria.
I hate to be so cynical, but does anyone besides me think that this government would only take action that would have a minimal impact on the real estate market? If it really is only 5% of the market going to foreign buyers then the added 15% tax would have a minimal effect of prices. I just think that a government is only motivated by one thing and that is getting into and holding power, so they won’t make decisions that would put people’s equity at stake and furthermore they can’t really afford to deflate the market that drives a huge percentage of their GDP.
Also, what kind of provincial legislation can only apply to a municipality? Are they declaring it an economic disaster zone?
Also, if people are motivated to get their money out of China or wherever, then they could just as easily buy something somewhere else to park their bucks. this will probably only stop people who are wagging the real estate market dog in Vancouver.
Also, will this apply to numbered companies? How will they figure all this out on the PTT form? Will it apply to commercial property? Lots of questions about this. If it seems too good to be true…..
My initial feeling is that another 15% isn’t going to stop the flow of black money into Vancouver. It’s just a cost of doing business. The mob bosses just want another 15% kick back.
What stops money laundering is transparency. Our privacy act protects the identity of these people and that has to be changed. We need to finger print and ID all purchasers of real estate in BC and that information should be shared with their country of origination. In that way if these people are convicted of money laundering in their home country, the property in Canada may be seized and sold immediately. The same with drug dealers and prostitution ring leaders in Canada.
If you’re a criminal in Canada, don’t buy real estate in BC it will get you put behind bars.
I’ve been watching the market in the Central Saanich area, and I am noticing that homes seem to be selling for over asking more than they were several weeks ago. In one example, 900 Clarke Rd just went for $680,000, which is $110,000 over asking and $171,000 over 2015 A/V.
That seems to be an extreme example though. Flight from the core perhaps?
http://www.remax.ca/bc/central-saanich-real-estate/na-900-clarke-rd-na-wp_id149531187-lst/
B.C. to target foreign real estate buyers with new tax
http://www.theglobeandmail.com/news/british-columbia/bc-to-target-foreign-real-estate-buyers-with-new-tax/article31096550/
I’d like to optimistic, but given how overtly and shamelessly sleazy this government is, I wouldn’t be surprised if the measure were castrated from the get go. The regional restriction is already curious. It’ll be interesting to see what loopholes come with it.
Didn’t think our government would do anything as robust as the 15% tax. They must have felt vulnerable on this issue. Hopefully they do a good job at closing most of the obvious loopholes to this. May well cause pressure elsewhere in BC.
For me an extra 15% is a lot when prices are also up 30% in other alternative investment markets like TO – and maybe some areas of Victoria. My view is any reasonable foreign investor would not make this choice if they are investing primarily for ROI rather than lifestyle, relocation or family reasons.
Or they are willing to pay the 15%. Prices are up 30% in a year in Vancouver. What’s an extra 15%?
Good thing De Jong’s places are just outside the GVRD boundaries! Could be a benefit as capital moves outside the tax zone. Lucky guy…
Aug and Sept numbers shall be very interesting.
If nothing happens than the Gov is right. Foreign investors did little to drive up prices. Than what?
Apologies for the long post.
The topic of colonialism is important to me, and I’m glad that it is for some others here too. Thanks, Leo, for shedding some light on this.
I often hear people say, “But what can we do? The problems are too complex and no one knows how to fix them.” The truth is that most of the best solutions have already been determined, but have yet to be implemented.
Why have they not been implemented? Because their implementation would radically change how Canada functions … and many people, politicians, and big business interests would freak out. But a radical change is what is eventually required.
After the Oka Crisis in 1990, the federal government needed to do something to prevent such skirmishes from growing in frequency, so it convened a Royal Commission to study and arrive at enduring solutions. Five years later, and after all parties at the table reached consensus, the report of the Royal Commission on Aboriginal Peoples (RCAP) was released in 1996.
RCAP is basically a blueprint for a 20-year plan to make things right — and this includes, among countless other things, giving back to Indigenous peoples a lot of power, influence and — crucially — land that was stolen.
Here are the highlights of RCAP, if anyone cares to learn more:
https://www.aadnc-aandc.gc.ca/eng/1100100014597/1100100014637
And it’s worth noting that the Truth and Reconciliation Commission’s recommendations overlap in many cases with the recommendations of RCAP.
“The risk now is as JJ says, the setup doesn’t compare to the past and if events do unwind Van it could also get ugly which has to go hand in hand with credit drying up. This is what scares me. The inadvertent casualties of credit tightening.”
Exactly what I’ve been saying all along Dasmo. When the shit hits the fan the banks freeze up for everyone and we already know Scotia has been tightening for months now. The rest of them just won’t admit it.
I can imagine how many deals are turned down or more money down is required when that scenario is happening. We don’t hear about those.
Not saying there weren’t deals back then but they were not the norm like in a real crash, that was a blip.
Something had to be done. We will see how this plays out in the different markets in BC.
Exactly Jack, Davidoff refers to $5 million places, not average homes or slumlord crack shacks. You can’t flip those mansions in Victoria like they have been in Van, you’re stuck here for a long time.
The new build mansion on Nottingham that dropped it’s price over 20%/ $1 million is still for sale after almost a year. Dream on.
“Imagine buying a $5-million, paying a $750,000 transfer tax. People don’t get rich by paying $750,000 to buy a home on top of the purchase price. The question is whether foreign buyers will find a way to get money into the local housing market, other than being a foreign buyer.”
It could cause foreign buyers to target areas outside of Vancouver. It will decrease the resale market in Richmond and some areas of Vancouver significantly given the foreign buyer stats which will probably affect those seeking to cash out of these markets and those then buying with this money in Victoria.
I’d choose somewhere else myself if I were a foreign buyer. We’ll see how it plays out – maybe any drop in Victoria will be compensated for by additional foreign investment money but there seems to be a coordinated movement by many governments, including in China, to curtail foreign buyers.
Well I bought a house in the beginning of 2012 (crappiest house in Fairfield) and had it assessesed to draw money out of it for the house build. It was assessed at 51% more than we paid so depending on what and where I think 30% off is conservative. It feels like the market in the core has spiked 30% just this year. This isn’t a pump Hawk. Just my fact. I feel the market is at its most dangerous time myself. If the climb was orderly and Van wasn’t totally insane it would feel logical after being flat and rates being so low so long. The risk now is as JJ says, the setup doesn’t compare to the past and if events do unwind Van it could also get ugly which has to go hand in hand with credit drying up. This is what scares me. The inadvertent casualties of credit tightening. I am prepared to spend my life savings to build my house since I am a young man and life matters but would prefer to do it with borrowed money….. So I hate this straight up hyper inflation happening in the market right now….
Michael, how big do you think Victoria is?
There is no way that Victoria could handle that kind of influx of laundered money. A starter home in Oaklands would be several million dollars. You don’t seem to realize that this is billions of dollars.
What might be the more likely situation is that they will just launder more heavily in Seattle or any other major city along the US coastline.
We are not the only places to launder money. We were just the cheapest.
So I guess you’re buying Mike ? What’s an easy 15% right ? It’s been 50% cheaper or more already here for how long and the stats show they aren’t moving here in any big way.
I highly doubt it will have the hyped effect. Victoria isn’t Vancouver with the large Chinese community and the lack of shady agents to flip their money laundered deals.
Totoro
Curious how this will not send more money to Victoria. Should have been made province wide. Not against the tax but come on do not cause issues in other places to try to fix Vancouver.
Housing economist Tom Davidoff:
I expected something like the PTT tax for foreign buyers to come into effect given that this is what other countries have done but that was without warning. Hopefully the rule applies only to new deals and not existing as this could cause significant issues for those with accepted offers that close after August 1.
I do believe this, in conjunction with the other measures to stop money from leaving China, will affect the Victoria market eventually. How much, I don’t know.
I sense an increase in listings coming. Interesting comment on twitter from former trial lawyer/journo/editor:
Sandy Garossino @Garossino 33m33 minutes ago
Just had a call from a major west/side realtor–this WILL slow the market down. But watch for manipulation by local opportunists.
I think a few realters just shit their pants in Vancouver
Helps will push to get it here too. She is already pushing for the empty homes tax. Money launderers don’t live in their houses.
http://www.timescolonist.com/news/local/victoria-mayor-to-push-province-for-ability-to-tax-vacant-properties-1.2302838
If BC is a good place to launder/invest money for foreigners this will just cause them to operate outside of GVRD, no?
This is election driven. Problem maybe that it could take BC economy down with it.
What does this do to Victoria. Are they going to come here instead or Toronto.
This is not well thought out.
gwac,
It is adjustable to 20% if needed. Didn’t think Clark had it in her to go that high with all her Asian business buddies. Hypocritical part is she just told us several times that she didn’t want anyone to lose their lottery winnings. Ah, the joy of politics, talk out of both sides of their mouths to appease the masses.
Too bad it’s 10 years too late but will be interesting to see if it chases away some of the foreign money launderers and so called “corporations” who know they are now getting scrutinized where a month ago there was nothing.
That is a huge tax. That may kill Vancouver very quickly.
If you’re money laundering you want BIG numbers. These people are laundering hundreds of millions. They want high priced sales to move bigger sums of money.
To you and me it doesn’t make sense. Why buy a 2 million dollar property at 3 or 4 million? It’s because money launderers want to move lots of money and not small amounts. That’s why Vancouver is attractive to money launderers and not places like Victoria unless it is the high end water front properties. A place to buy and then re-sell to another money launderer. You find a lot of the same houses selling over and over and over again. At least when the ownership is transferred through land titles. But you can re-sell the home a half dozen times in Guondong before registering a change in ownership at land titles.
I think it is time for a change in the capital gains exemption. These high end properties should be independently appraised and the capital gains exemption only applicable to the smaller of the difference between the original purchase price and final sale price or the appraised values.
We have the means but do we have the will?
300K is no chump change. Victoria will push for this ASAP.
With declining sales and foreign cash flows this could get interesting if this is the push over the cliff or just step one of many to come. Don’t recall seeing those laws in 1986.
BC brings in 15% property tax for foreign buyers
The new tax will take effect on August 2nd and will apply to foreign nationals or foreign-controlled corporations that buy homes in BC. This would mean a $300,000 tax on a home worth $2 million.
Mike likes to exaggerate the truth as we know, few places went for 30% off unless so desperate to avoid the big B on their credit score or it was in a very scummy area of town with crackheads for neighbors.
Therefore it is the buyers only calculation wether it is 30% or just what that ghetto hood goes for making it no big deal.
Then again Mike did say he prefers “transitional” housing with low income tenants he can boot to the curb AKA slumlord.
Michael that wouldn’t have been a low. The market in 2013 was still balanced.
A low would be a buyers market with months of inventory in excess of 8 months, new listings being added at a rate in excess of 2.5 new listings to everyone one that sold and the days on market to be over 90.
Hence no 150% increase. Now let’s be clear only parts of Victoria’s core and types of properties had a 30% increase. And most of that increase happened in one or two months near the beginning of the year.
That’s too broad of a question gwac.
Maybe you should be more specific and give a location and what type of property you’re interested in? Because it is a different market just 8 kilometers outside of the downtown core.
When it comes to the city, one has to be selective in comparing houses in different hoods. Sales of homes that are more than half a kilometer from what your looking to buy are not good comparable sales.
For example, Oaklands is hot but if you were to compare a house in Fairfield to Oaklands you would conclude that either Oaklands is overpriced or Fairfield is under priced. Two different types of buyers looking for different types of properties for different reasons. The real estate market is not homogeneous. It isn’t just one market but many sub markets.
Throw another $200 million (Mayfair expansion) on top of the billions planned for Vic.
To put the cost in perspective Hillside was only $80 million.
http://victoria.citified.ca/news/mayfair-shopping-centre-expansion-plans-revealed/
Agreed, it was nice to buy @ 30% off at the lows of the cycle in 2013. What were you laddies doing, hibernating? 🙂 I see LeoS even rang the bell for you guys Spring 2013 when he bought.
Marko
How are things out there? Slowing/same?
“That’s far from being exactly the same as today. It is easier for prices to rise when you are starting at the low point of the real estate cycle right after a bust.”
Bang on Jack, what the perma pumpers don’t want to admit is people are tapped out now due to a decade of free money and affordability limits have been maxed. You don’t have the beginning of cycle rise when the personal debt levels are at historic highs. Even a failed economist should get that.
We’re an accident waiting to happen and latest Van declining sales numbers and foreign cash inflow show that.
Mike, you’re getting desperate comparing oil to Victoria. What’s next the price of pork bellies ?
Interesting comments from an international lawyer involved in major money laundering cases and representing the China banks that got scammed from BC foreigners:
“Christine Duhaime @cduhaime 19h19 hours ago
If I had liberty of telling you how much money has been scammed from Chinese banks & parked in Canadian real estate, Canadians would riot.”
I know that we had just had a major recession and prices had declined substantially since 1982/1984. It may have been more of a lower interest rate environment coupled with low priced housing. When houses were only $125,000 in the core and the interest rate was down from 18 to 10%. Back then a single parent with a job in the government was able to buy a starter home in a starter neighborhood like Esquimalt without being maxed out on their debt service ratio.
That’s far from being exactly the same as today. It is easier for prices to rise when you are starting at the low point of the real estate cycle right after a bust.
Mon Jul 25, 2016:
Jul Jul
2016 2015
Net Unconditional Sales: 744 796
New Listings: 930 1,235
Active Listings: 2,219 3,942
The exact same 70% crash in oil of ’86 helped Vic prices achieve 150% gains in the following 8 years.
Maybe it’s all those itinerant Alberta workers that are to blame? Those that had a home here but worked in the oil patch that were flying back to Victoria on weekends. The kids returning back to their parents home. Or those looking to spend a pleasant summer in a mild climate using their unemployment insurance checks.
That would have an effect on our vacancy rate, push up rents and get some thinking of buying a rental property.
I would think if this is a significant factor, we should see the excesses in the market reverse themselves as the wave of unemployed workers abates or until their insurance runs out.
This may have just been a pogey summer for Victoria.
I thought the developers went bankrupt and so now are likely trying to recoup costs. http://www.timescolonist.com/business/mariner-s-village-in-sooke-in-receivership-tenants-face-eviction-1.2135009
Sooke is lovely area and place but were a little too ambitious housing project.
“New pricing!” Is written boldly in red on the Mariners Village billboard.
I took a 40 minute drive out to Sooke this weekend to look at some town house and condominums in Mariner’s Village.
The units seem to be well built, but while many have views, all water views are not the same. Still I would likely buy one if I were retiring soon. Originally the town homes were flogged by the developer, four years ago, to those that thought this was the new paradigm for Sooke, for prices upwards of $550,000. The thought was that rich Vancouverites would retire here. Today you can have one for $350,000. Sound familiar to anyone?
I knew back in 2012, the prices being paid were not reasonable to the point that I declined mortgage assignments in the complex. And time has proven me, once more, as correct. Better that some other schmuck appraiser have hundreds of thousands of claims against her errors and omission insurance than me. I’ll make my money when most go into foreclosure.
But today, they’re a more reasonable price.
Wow, an ex-economist draws a chart with an arrow to the moon with zero reasoning other than just the gold standard ??
Maybe you should put in there “Old people from Ontario” to sustain an unsustainable price chart…which is the most pathetic chart I’ve ever seen drawn.
Wake up time Mikey, it’s game over. 30% drops on high end Vancouver houses asking prices is the fire alarm on top of a suddenly dead detached market over there. Oh right, Ross Kay lied about those numbers and addresses. Maybe you should message him and tell him so. 😉
It’s not like it’s the economics of rocket science to figure out 🙂
Note below what happened when we severed all ties to the gold standard in 1971.
Re: JJ/Hawk/LeoM’s comparison to ’80/81… laddies, you’re at least 5yrs off the mark!
1986 is the comparison. For instance, I bought property here in 2013 for 30% off 2010’s peak, same as people did in ~83/84. Note also how things like gold peaked in 80/81 and 10/11. ( For clarification, I didn’t call you ladies, I called you laddies.)
http://i.imgur.com/eGCYjMW.png
Poor Mike can’t handle reality that the top is in and prices are showing major weakness and has to resort to digging up old articles from years past.
It’s 3 more years of bloated buying since then, did you not see the chart or is your arrogance and leverage blinding you from reality ?
Please tell us how this parabolic blow off is sustainable Mike ? You are an ex-economist pro right ?
http://www.news1130.com/wp-content/blogs.dir/sites/9/2016/02/02/rebgv.jpg
Let’s see what this genius realtor Ross Kay was saying in May 2013…
The poor saps who listen to these doomer hoodwinks (Rabidoux, Macbeth, G, Maclean’s magazine…..) should consider lawsuits.
This about sums up the real situation in BC for those naive enough to think it doesn’t happen, it’s just a few bad apples, and the “authorities” will take care of them if it were for real. This is out of control and has been for over last two decades with our government turning a blind eye.
“An associate of Sun told Postmedia: “In Vancouver, it is not just Kevin, though. There is hundreds of people similar to him.”
The belief that there are hundreds of real estate investors in Vancouver who are under suspicion in China is shared by Canadian law enforcement sources.
“Sometimes we ask ourselves if we’ve already lost the battle,” one such source said. “I think this guy is just part of a large network.””
More massive Vancouver money laundering, this is the tip of the iceberg.
Mysterious wheeler-dealer is at centre of a web of B.C. real estate deals
“A Chinese property tycoon linked to a massive banking scandal in China’s industrial north is at the centre of more than $500 million in B.C. property deals, a joint investigation by Postmedia and global due diligence firm IPSA International shows.
Chinese real estate magnate Kevin Sun — also known as Hong Sun, Kevin Lin, Hong Wei Sun and Sun Hongwei — founded Sun Commercial Real Estate in 2013. In addition to buying and selling hundreds of millions in B.C. property, the B.C. company, which focuses on immigrant investors, has raised over $200 million from investors.
The banking scandal, at Industrial and Commercial Bank of China, started with a $500-million loan fraud audit in Jilin, a corruption-plagued northeastern province.”
http://theprovince.com/business/real-estate/mysterious-wheeler-dealer-is-at-centre-of-a-web-of-b-c-real-estate-deals
Interesting comments by realtor Ross Kay on twitter that asking prices on high end Vancouver homes are dropping bigtime.
When you go from $4 billion foreign cash inflow in early part of the year to half a billion in June, the result explains the declining sales numbers and these major price reductions which eventually have that “trickle down effect”. 😉
Ross Kay @rosskay Jul 21
#VanRE Nice to see some of those 30% price reductions now taking place on Vancouvers most expensive homes.
Ross Kay @rosskay Jul 22
@vincearvidson 2230 SW Marine Drive (dwn $3.2million), 3851 Marguerite (dwn 1.9M), PH 15581 Marine Dr (dwn 3.4M), etc etc
The Indian Act is a national disgrace. thanks for posting on this important topic.
And on the topic of shoddy housing, I went to the open house on Granite. A one-hour open house packed with families with young kids and pregnant moms and quite a few families/groups from Asia speaking Chinese.
The house is what I would consider to be a tear down – except at the price it will go for it is difficult to see how that makes any sense.
The back two bedrooms (and suite below) are built as part of an enclosed porch – clearly without permits. The only decent room was the small living room where you could see the original coved ceilings. Bathrooms were mouldy, kitchen terrible, bad landscaping, broken deck, sloped towards house at the front.. etc.
It will be interesting to see what it sells for. I do not envy the family or person who buys it.
This topic is near and dear to my heart Leo. Thank you for posting and thanks to Dr. Olsen for getting the word out. The absolutely ridiculous, illogical and inhumane on-Reserve housing system is an issue that needs to be addressed. The impact this has on keeping people stuck in poverty and ill health is avoidable at less cost than is spent now in my opinion. Always too poor to move and never getting ahead because you are paying for a depreciating shoddy house … The intergenerational transfer of poverty through lack of access to financing to buy appreciating land is poorly understood.
I never really understood how it all started, thank you for posting this and I agree with your comment everyone should watch this video.