The market for Vancouver real estate has gone global in a big way. The first wave of rich Chinese buyers came in the 80s and 90s as the impending transfer of Hong Kong to mainland rule approached, and the demolition of modest homes on the west side in favour of mega-houses transformed the city. But now China itself has spawned an even bigger reservoir of affluence that is looking for an investment outlet and finding it in Vancouver property. This will complete the process of dispossession that began three decades ago. Even higher density and higher property taxes and rents will combine to make life in this city---a city frequently held up as a model of sensible planning in Australia---tenuous and stressful at best. But stayed tuned. The property bubble will burst, and these investors and the realtors who cater to them will take a well-deserved beating.
A "SUCCESS" Story That Is A Prelude To Catastrophe
Global TV BC carried a story tonight (February 9, 2011) about Vancouver real estate agents taking rich Chinese clients on a helicopter tour of Greater Vancouver in an effort to sell them on real estate investment. Apparently, they love White Rock and the fact that property in Canada is 'free hold', unlike China, where is ownership is more like a lease. Chinese millionaires can no longer buy up 10 condos in China--they are now limited to two. So BC and its prices look very good to them. And here immigration lawyer Stephen Green assured a TVO audience some weeks ago that immigrants have no significant impact on the real estate market! Oh really? And God didn't make little Green apples and it never rains in Minneapolis in the summer time.
Immigrant investors drive the property market here
In fact, in Vancouver at least, immigrant investors drive the property market. Asian buyers are recruited to prop up a Vancouver real estate market that manages to be hot in the admist of a recession which is hurting ordinary people who fall even further behind in their vain attempt to gain a foothold in the housing market. A 60 foot property in Dunbar (on the West side) with a derelict house sold for more than the asking price at $1.9 million recently, while a 450 square foot condo sold for $302,000--also above the asking price. No wonder the CEO of the Royal Bank of Canada (RBC) wants the government to raise the immigration quota by 50%! No wonder Canadian bank branches are sprouting up like mushrooms all over South Asia! No wonder they send hush money to environmental NGOs like the David Suzuki Foundation to ensure their silence about the ecological consequences of mass immigration! It's good for business. But how good is it for Canadians? Canadian financial analyst Nicole Foss--unique for her understanding of peak oil---predicts a crash in the housing market of epic proportions, most especially in Vancouver where people spend 70% of their income on mortgage payments. She told me last week in a one hour conversation that if you own real estate in Vancouver, or worse, carry a mortgage on it, get out while the getting is still good. In fact, that advice applies country-wide, where Canadians spend 50% of their income on servicing their mortgage debt---but Vancouverites risk the greatest loss.
Web of interest paralyses democracy
Does the labour movement or the social democratic NDP make any noise about the big-money Asian invasion? No, because an inflated housing market has many backward and forwarding linkages. It encourages more housing construction and renovation, which is a boon for lumber yards, hardware stores, carpet stores, furniture stores, alarm companies, financial institutions, interior decoratoring consultants--to name but a few at the trough--- and most especially for construction unions and hardhats of various descriptions. Debt-fuelled real estate is the very centrepiece of the whole Ponzi scheme. No wonder politicians, economists and financial reports make mention of "housing starts" as the guage by which to judge the health of the economy and the performance of an incumbent government, civic or national. Unfortunately, when housing starts are up, food security and the environment is down---but Mother Nature is not listed on either the Vancouver or Toronto stock exchange. No matter. Even if Vancouverites are foreclosed, rendered homeless and queued up at food banks, they can eat "cultural diversity".
Precious Democracy sacrificed for transient commercial advantage
Imagine if there was a 100% capital gains tax on real estate transactions. Imagine if buying property could never be seen as a speculative investment. Imagine if foreign millionaires were not able to buy their way to a Canadian passport. Imagine if we lived in a sane and just jurisdiction! It wouldn't save us from $150/barrel oil or rising food prices, but at least we wouldn't get to hell so quickly.
Vancouver post petroleum - a town of expensive tombs?
Nicole Foss says that bubbles are inherently self-limiting. We won't need a spike in oil prices to bring this fantasy world crashing down. But on the other hand, if the people in Vancouver Peak Oil are right, "alpha" cities like Vancouver will become corrals of death, misery and starvation, and eventually, ghost towns. Strategic planner and architect Rick Belfour predicts that viable post-carbon cities in Canada will be lucky to number 20,000 citizens. Condos like that $302,000 box in a high-rise will become very expensive tombs. Maybe we can plant terra cotta Chinese millionaires in them for posterity.
February 9, 2011
PS For those who do not know, "SUCCESS" is an organization---aided by federal grants--- ostensibly to help immigrant Chinese integrate into Canadian society, but in the process has become an aggressive lobbyist for more Chinese immigration. Using the money of Canadian taxpayers to promote causes dedicated to their colonization is now par for the course. Perhaps, eventually, SUCCESS will help Canadians successfully assimilate into a Chinese Canada. As the late Lillian To, former head of SUCCESS, once confided, a Chinese Canada would "improve the gene pool". Unquote. And what was UBC's Professor Henry Yu saying about rampant racism in the Euro-Canadian community? I guess racism is in our genes. We are so racist that our government awarded a massive grant to Yu to spread that message.