Vancouver has been wracked by a white-hot property bubble driven primarily by offshore speculators, mostly Chinese, who have driven up the price of housing beyond the means of working Vancouverites, crippling the city's daily life as workers, students and families struggle to find somewhere -- anywhere -- to live.
It's hard to overstate the absurdity of the Vancouver property market. Houses that are literal tear-downs, on tiny lots in remote neighbourhoods, are priced in the million-dollar range. The market was so hyperinflationary that realtors engaged in "shadow flipping" -- pretending to have found buyers for the houses they listed, while secretly buying those houses themselves and then selling them on immediately at a huge markup, pocketing both the profit from the sale and a commission from the original seller.
In July, the British Columbia government imposed a 15% tax on foreign ownership of properties, which had the not-accidental side-effect of making the ownership of those properties more transparent. Since many of the speculators gambling on Vancouver properties have broken their home countries' laws by moving capital across the border (and because much of that capital was stolen money), the Vancouver market immediately became a no-go zone for offshore crooks.
But there may be other forces at work. It may be that the world's autocracies have run out of national wealth to loot and bubbles to exploit. After all, Manhattan property speculation plunged by 20% in Q3/16 relative the Q3/15.
1016 East 7th Ave, Vancouver
MLS® Number V930461
Listing Price: $899,000
Description: “Opportunity knocks! Builders and investors need look no further if they desire a view property with multi-family zoning (RM-4). This property overlooks China Creek Park, with amazing views of the North Shore mountains and close to Commercial Drive and two skytrain stations. Priced at lot value, the property is being sold ‘As Is, Where Is.’”
Congratulations to those who guessed the “opportunity knocks” price of $899,000 for this “As Is, Where Is” bargain complete with “amazing views”, presumably through the opening where one would normally expect to find a workable door as opposed to the windows that are all boarded up.
B.C. Imposed 15% Foreign Tax in July, Vancouver September Home Sales Plunged 33%
(via Naked Capitalism)