High cost of housing in Canada and the question is, why?
Not a day goes by you don’t hear something about the high cost of housing in Canada. So what can be done about it and what’s causing it. In Vancouver BC Canada it was always thought and rightfully so, that foreign entities were buying up the Canadian real state at an alarming rate. And most well-to-do buyers not really caring what they pay. In buying that property for an over-inflated price “They just drove up the price of all the property around that area.” Click hear for moving to Canada link
And yes some people do have that kind of cash.
Many years back my partner in crime was a Real Estate Broker and manager for a local company. Fascinated by her choice of career, I followed her courses and her work with the utmost of interest. As the season rolls around, spring is once again upon us and at one of the company general meetings, it was mentioned that it’s that time of year again. “It’s the mail-out time!”
That’s one of those seasonal periods the office has mail-outs to perspective clients. All the agents would take a separate region and send a reminder out by mail to the people in the area of their choice. The letter wasn’t much really, and it would read something like this, if you decide to downsize or move up to a bigger home please consider ME AS YOUR real estate agent. Blah, blah, blah.
But my point would be when they go to the public records office for the property owner’s name and address; we could not believe the number of owners from outside of the country. We would look at each other because the paperwork would read . . . not in Canada, this owner not in Canada … not in Canada……not……
Could rising house costs in Canada be contributed by people outside our country and maybe that’s the answer to the why question.
I could not believe to what extent our community was owned by people living in a different country. Now you have to wonder why. Were they Canadian citizens that moved away for job reasons or were the wealthy people from around the world just wanting to invest in a safe haven, or for future relocation of their families? There are many good reasons Canadian property is owned by people not living in Canada, some legal and some … not.
So as you continuously hear that real estate has gone sky high to the point most ordinary Canadian citizens could only dream of owning a house. You ask yourself why? There should be no way houses and properties go up from $40,000 dollars 30 years ago, to $500,000. dollars today unless there are other factors at play.
- When Hong Kong was transferred back to China on July 1, 1997, as per agreement between the Chinese and the British Commonwealth (England), the wealthy citizens of Hong Kong were left in limbo. The question that circulated with these elites was, would they lose their wealth, would communist mainland China seize all their equity, their property, their hard-earned money? These are the same people that would phone a prominent real estate company in Canada and say, “I don’t care what we pay, invest my money.” The thinking being, they were going to lose their fortune anyway due to the take-back of communist China.
- Around the year 2011 when the US was at war with Libya and the wealthy realized that in fact the Americans were serious and they are winning that war to oust Gaddafi, it was not uncommon to get a phone call from that war-torn country saying, would you hide our money from the advancing Americans for a sum of $$$ reward for your trouble? Did they buy property in Canada to hide their money? “Possibly.” At the expense of Canadians no less.
We, I mean my wife is now retired from real estate but I would still guess, as we speak, it’s still happening today and probably a little more creatively.
The wealthy from unstable countries are investing in Canadian properties, business. And they say “I don’t care what we pay” Am I answering some of the why questions of the rising house costs in Canada?
But surely our political leaders see this and could curb this trend for the health and welfare of the people of Canada. Eh. My suggestion is, “Close that loophole.”
So as this topic arises the politicians would all say, “I don’t know what is driving up the prices?” Our government-watch dogs must see this type of transaction and they must know this has been happening forever and, “They just don’t understand the problem.” Why are there so many foreign entities owning Canadian property? Are these owners even traceable with numbered companies?
- “Who owns that house “One realtor would say to the other,” a company called #XYD 123937 numbered company from 25-da-DDD Country. Oh, that’s ok. As long as they pay their taxes and commission on that property”
Here is another perspective.
On a nice sunny day, we decide to go down some older sections of town. We spot this house with lots of curb appeal in a nice old section of town. We then spotted our dream home, a big 3 car garage for you know who, 4 car driveways, and I think it had a kitchen? What’s not to like? Nowadays in Canada, we all know the cost would be far from being a normal price, so you and I know, you have to dig really deep into your pockets to buy a house.
- But the first thing that would come out of our mouths would be, “If we won any money, we would walk up to those people, knock on their door and say, How much money would it take to buy this house?” and. . . “WHEN COULD YOU MOVE?”
So now put into the equation of the rising housing costs, lottery winners, and ones that win millions of dollars weekly. The wealthier citizens of this country do not play lotteries, they’re smart. The chance of winning is next to impossible, and most just don’t play with those terrible odds.
So the only people that do play and sometimes win are people like you and me. And if you do come into a major win-fall, you would do what I previously said. Walk up to that owner in that old section of town and buy that dream home. “I don’t care what I pay.” This is un-found money anyway.
Am I any different than the Hong Kong resident?
So now you’re paying a stupid ridiculous price like that person from Hong Kong. You just drove up the price of all property around that area. The people in the area notice and say, if my neighbor got that price for their house, I should be able to get it too.
I’m sure, but I think the lottery corporation’s top secret is to how many millionaires lottery winners there are on a weekly basis. But would they do what we would do? Walk up to that dream home door and say the same. And indirectly you just drove up the market for your fellow Canadians.
How many millionaires are being produced weekly due to lotteries and do they contribute to high cost of housing in Canada by saying, “I don’t care what I pay.”
As our leaders try to figure out why house prices are going up in your community, consider, they, our Government run Lottery Corporation contributes indirectly to the problem with the newfound millionaires every week.
But as the story goes, just follow the money. House Transfer tax on a $1 million dollar home is surely more than a $40,000 home. I’m just saying!
But our leaders come to the rescue for the home buyer. “We have a solution to the problem they say,” They will lock your mortgage in at 0% over 30 years keep your payments low, but, “You still have to pay that over-inflated house price.”
And that’s, “How the problem is fixed.”
Today I’m not sure how the housing dilemma could be handled. I personally think real estate in this country is out of control and, has been for a long time.