(6 days ago)
The government of the Province of Ontario announced a laundry list of measures to prick the crazy house price bubble in Toronto and surrounding areas. This includes a 15% transfer tax imposed on home sales to non-resident foreign investors, including corporations. It’s aimed at Chinese investors in China that buy homes in Canada to diversify their assets and get them out of harm’s way in their own country.
For them, homes in Toronto (or anywhere outside China) are an asset class denominated in a foreign currency. But these homes also confer other benefits in the event some untoward mishaps occur in China, as these investors appear to half-expect.
The Province of British Columbia imposed a similar measure last August to get a grip on the housing bubble in Vancouver that had long ago spiraled out of control. It had the effect of freezing the market, with home sales volume plunging.
Why now in Toronto? It appears that the attention of Chinese investors has pivoted from Vancouver to Toronto: In March, year-over year, the average price for all types of homes in Toronto soared 33%! It doesn’t take a genius to figure out that this is simply ludicrous.
Vancouver's Bubble versus the Non-bubble cities - what differences?
David and Goliath: a priceless Vancouver academic retires, after 45 years grappling with unaffordability
UBC geography professor David Ley has had a front-row seat to the epic transformation of a city
He arrived in the city in 1972, a bearded Briton in flared jeans, armed with an Oxford degree and an activist streak that had already taken him to Philadelphia. There he had both studied and sought to alleviate the stressed conditions of African American residents of poor neighbourhoods, where vacant homes struggled to find buyers for US$1. The former was conducted through his PhD work at Pennsylvania State University, the latter through volunteer work at a Presbyterian church.
He lived in the urban landscape he studied. The same would be true in Vancouver.
He landed here when the city was undergoing the first throes of gentrification, in contrast to the decay he had seen in Philadelphia. But he noticed victims here too - residents evicted from rooming houses to make way for the first condo developments. He could never have guessed that he was securing a ringside seat for one of the world’s most remarkable urban transformations, turning modest Vancouver into one of the planet’s most unaffordable cities, its residents alternately enriched and overwhelmed by waves of foreign capital. A global test case and basket case.
Is huge loophole being opened in Vancouver’s foreign buyer tax?
His benchmark work, the peer-reviewed 2010 book Millionaire Migrants, lays out the case that Vancouver’s unaffordability woes are products of policy, international capital and wealth migration, and Goliath-like pro-development forces pushing the notion that answers lie in market-driven supply. Ley argues instead that market-driven condo development and on-the-ground unaffordability have gone hand in glove.
Now Ley, 69, perhaps the most significant academic voice in the unaffordability debate, is retiring from UBC; the former head of the geography department taught his last class this month and he officially retires at the end of the year after a research sabbatical. He continues to study real estate bubbles around the world, and there will likely be another book at the end of it, examining and comparing Vancouver, Hong Kong, Singapore, Sydney and London.
> more: http://www.scmp.com/news/world/united-states-canada/article/2089031/david-and-goliath-priceless-vancouver-academic
(1 day ago)
If Mortgage Rates Tick Up Even a Little, What’ll Happen to Canada’s House Price Bubble?