When I see two people write similar opinion columns in a week, I have to ask what prompted the articles? Both The Vancouver Sun and Vancouver Courier published opinion pieces asserting that race or racism is behind the concern about offshore buyers driving up the price of Vancouver real estate.
As I wrote to both Pete McMartin and Alan Garr last week, I think trotting out the racism line is a cheap shot on both their parts and on the part of people like former Vancouver city planner Larry Beasley. No denying racism exists but Larry's assertion that peoples' concern about Chinese foreign buyers being "bullshit", is bullshit itself. People have a right to be concerned when the playing field is not level. My own concern is that people coming from countries where they pay no tax or low tax (or hide their incomes), and as a result are capable of saving much larger amounts of net income compounded at higher rates, are competing with people like me who have to earn much higher incomes to compete on a level field. Do I support market controls? Not really. Do I have a solution? Actually no I don't. Former councillor Peter Ladner was on CKNW Monday morning and I liked his approach a lot better. He said the issue is a concern and needs to be looked at without calling people names or accusing them of racism. He also cited a number of examples of regulations in countries like Austria and Switzerland which are designed to curb speculation and keep affordability. I think we can see what concerns the spin doctors within the R/E lobby.
Garr asserts people concerned about realtors catering to wealthy Chinese are living in a fictional world and quotes Beasley suggesting it's racism. McMartin suggests the issue driving it is race also. He (Martin) does make a good point though, in that governments should track the numbers and have the facts in order to act. Anecdotal, fantasy... call it what you want... offshore money (Chinese and otherwise) has had, and does have, a significant impact on RE prices in Vancouver. What do I base my assertion on? Talk to any realtor in town and ask them who's showing up with the big money. I've got a number of friends in the business who will talk candidly about it and they have no reason to lie to me. In fact, one of my friends (a West Side realtor) asked me for referrals a few months ago. My response to him was that I found it rather odd, that in a white hot R/E market, he would bother asking. Afterall, wasn't business for him better than ever? He told me business on the West Side was dead if you did not speak Mandarin or Cantonese.
Notwithstanding the fact that money has been made cheap, and this (nosebleed priced real estate) is essentially an interest rate driven phenomenon, exacerbated in Vancouver by good old fashioned lack of supply, and whether the number is 1.2 % or 3% that are offshore buyers; the price of real estate is ultimately determined by one thing, and that is how much the last house in the neighborhood sold for... period. If one guy, from China or elsewhere, shows up at 888 Whatever St. and bids $200k over asking, that becomes the baseline and he could be .00001% of the market for all I care. Canada Line, Maple Ridge.... Parksville, for that matter, mostly rise in relative terms following that. The ripples begin in the middle of the pond when you throw the rock in it. And by the way, when the price trend reverses, it starts from the outside and moves back in.
By the way, on a related note, when the issue is clearly lack of supply and too much demand, what is the wisdom of a provincial government creating tax incentives for first time home buyers which can only enhance demand? Just sayin'.
Having said all this, I question the 3% number that Garr quotes coming from the Vancouver Real Estate Board President Eugene Klein (actually I question just about anything that comes from them) . What does that 3% cover? Does it include recent immigrants, people that live here part time, people that have a spouse or other relative living here (with house in his or her name) while they continue to live overseas and commute, students? Hopefully you get the picture.
And again, I have to ask what prompted the article? We know where Larry's coming from and we know where the Vancouver R/E Board's bread is buttered... so who's pushing the racism theme?
