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Mortgage Broker News | 20 Apr 2016, 08:15 AM Agree 0
Relative ease of purchasing, low interest, and generous exchange rates make Canada an incredibly attractive choice for Chinese real estate buyers
  • Brian | 20 Apr 2016, 09:57 AM Agree 0
    When is the government going to step in and stop this type of foriegn investment . Providing mortgages to foriegn investors that I could not qualify for myself
  • Paul Therien - CENTUM | 20 Apr 2016, 10:44 AM Agree 0
    I am about to share what is considered purely anecdotal information, but... think it is worth sharing. I know seven people/couples that are currently looking for a home to purchase in Vancouver. The properties that they are looking at range from a one bedroom condo to a 3+ one bedroom house, so a wide range of properties. Some have been looking for only a month, other for as long as six+ months. Here is what they told me and what has been confirmed thus far.

    One couple is looking for a condo, one bedroom – first time home owners. 400 is their max mortgage and they have 60K down. They have looked at over 50 properties and have made offers on 7 so far. On all they were outbid. On all but two of those (5 remaining), the people making the purchase were nonresidents, four of the five were from China.

    The second is a single male, looking for a loft style place, budget in and around 900k (this should be easier right?) – He has found four that he likes, made offers on them all, and was outbid on all of them, all by foreign buyers – no idea if from China. The last place was listed at 700K, his initial bid was 750k, it sold for 975K.

    Third. A couple. Currently own. Looking to move to a condo or townhome. Budget 750K. Three offers made. Outbid on all three, in most cases by hundreds of thousands, and all of them by Chinese Nationals.

    Fourth. Older couple, two kids in their mid-teens. Currently homeowners. Current house valued at 3.5 million, been there 15 years, roughly 3 million equity… this should be a super easy one… yes? Nope. They have made offers on over 10 properties and were outbid on every single one, all of them by foreign nationals. They have been averaging 800K on the amount they are being over bid on. Decided too stressful, they are staying in their home and doing an ETO to renovate instead.

    These last three are all first time home owners, all of them were trying to buy a one bedroom in Vancouver. All three of them ended up moving to New Westminster because all three of them were outbid on every single property that they made an offer on. Total combined offers made were over 15. They do not know on every single one, but between the three people the properties sold to foreign nationals of the 15 were 8, their realtors suspect it was higher.

    Of the 7 people/couples (total person is 10 – not including kids), all of them were born in Canada. 4 are Chinese, 1 Middle Eastern, 1 East Indian, 1 Greek, 2 Caucasian, 1 Japanese.

    All but the two that are current owners have the financial means to buy, all of them gainfully employed and earning reasonable incomes. It should not be this hard for them to find homes. The 5 first time buyers… all are getting $ from their parents to help, are all now looking at leaving Vancouver and going to the suburbs because they have no choice if they want to own a home. One has just found a great job, in L.A. and is moving there because even though he will earn slightly less money, his ability to own a home is far greater. They are all under 40 years of age.

    Some would say it is OK for them to move to the burbs, and I do not necessarily disagree. BUT… if they have the means to purchase, how can they compete with being outbid (in some cases almost double the asking price) and by people who are paying cash for the homes? I am in full support of having a strong and vibrant real estate market, but this is ridicules. At what cost to people who live and work and contribute to our communities? S A foreign buyer pays only property tax, but what of other taxes and contributions to our country?

    It’s complicated sure, but what happens if Canada becomes an unattractive investment or they suddenly need to "withdraw" on the asset?
  • John Woods | 20 Apr 2016, 11:25 AM Agree 0
    @Paul Therien Very well said. Here in Nanaimo we are starting to see the effects from Vancouver with more and more people moving to Nanaimo because they can afford to purchase here. Last night in discussions with a very seasoned and respected Nanaimo realtor he said almost every offer is now multiple. A lot of the offers are coming from Vancouver residents wanting out. We agreed this is good for business but at the same time asked if it was really good for the community at large. These buyers are purchasing because they either can't in Vancouver or have decided to cash out in Vancouver and move somewhere cheaper but still and easy commute because they still rely on their jobs in the lower mainland. So I ask is this good for our community? These people are really economic migrants.They have not chosen Nanaimo because they want to work , live and raise their families here but rather because it looks like a good deal. What stake besides an economic one do they have in this community ? The realtor agreed the question is worth asking.
  • Paul Therien - CENTUM | 20 Apr 2016, 11:39 AM Agree 0
    @John Woods - Thank you John, after re-reading I did cringe at the number of typos however!

    One person asked me a very valid question that I think we need to seriously look at.

    The consistent influx of foreign investors is great for short term financial gain, but how sustainable is it? Are we letting short term greed for wealth overshadow the building of a sustainable community?

    It's a very valid question and concern. One that I think needs to be looked at. If our market is being driven by foreign investment, what happens when that investment dries up or worse... if those investors decide to pull out? Have we created the potential scenario where we are at the mercy of people who do not have an vested interest in our communities?
  • Dan | 20 Apr 2016, 11:55 AM Agree 0
    Begin rant...

    Our budget: 750-800k. We have 50% down
    We've put in 3 offers on homes, here's what's happened so far:
    - First: We bid 15% over asking, we lost and it went for 42% over.
    - Second, 15+% over and we were told the other bidders would "pay whatever it takes" to get the home, so we stopped the useless bidding.
    - Third, 20% over.
    A fourth we were considering was listed for 625k (hey, lets go for the crappy old complex that has lots of deferred maintenance, nobody will want that! We could afford and live in a construction zone I guess...) .... it sold for 860k

    Our realtor has said all sold to non-residents.

    So I ask Mayor Rainbow: How are your own residents, taxpayers and supporters of our communities, supposed to find, afford and compete for a home in this market?

    I know there's no easy answer, just venting #Vancouver

    End rant....
  • Christina | 20 Apr 2016, 12:23 PM Agree 0
    The long term effects of this trend are important. If shelter costs are high, then it is more difficult for local business to be successful. Eventually this trend chokes the economy. Fewer new businesses is bad. More business failures is bad. How can this "investment" money into our real estate be good?
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