"Some feel that the Chinese are to blame for the hefty price tags on Vancouver homes. Recent economic prosperity in China has led to the emergence of a huge class of ‘new rich’ and they are buying up Canadian real estate, sight unseen, to the chagrin of many.
And yet, Canadians are doing the exact same thing in the States, in places like Las Vegas, Florida and Arizona. The economic fallout from the sub-prime mortgage crisis combined with the overall tightening of US credit markets has led to a dramatic drop in real estate prices. The bottom line: American real estate is an accessible and potentially lucrative investment and many Canadians are already taking advantage of the opportunity.
If a house is for sale, whether it be in Arizona or Vancouver, and somebody has the money to buy it, should it matter where they come from?"
My response is simple.
Two wrongs do not make a right. If Canadians are buying in Arizona and Florida, and pricing out the local people who work and pay taxes and are policemen and nurses and firemen all the other professions whom we rely on for a civilized society- better still they are not even corrupt- then yes it is a bad thing.
However the prices in those areas have been in free-fall and the economy stinks so our money is actually benefitting everyone. Not so here. The short term benefit of a massive transfer of wealth to a few people, while the rest are under significant housing pressure is not welcome.
There are many desirable countries who DO limit foreign or investor ownership of their housing stock and somehow manage to make a big profit on those who still insist on coming.
Look at Singapore. A small industrious tax-haven with limited land, where many wealthy (especially Chinese and Europeans) want to own and live. They have set aside certain areas where investors from off-shore can buy lots and build. The price of buying is MANY time the costs of lots in the local area and the homes built must be of a certain size and cost. I believe the land is even sold with long leases and not freehold, and yet they are selling.
No extra benefits come with this land ownership like free healthcare or education or passports. It is a simple investment.
Now lets look at the us: for the price of a home, we allow all the above benefits and allow our city to be socially destabilized. Who is going to change the regulations here? No one.
Are we doing this in Arizona? Of course not, they would love us to go down there buy and get sick, and spend many thousands on the hospital bill, and forget passports- the border guard may not like the look of you and you cannot even go to your new investment.
If Mr Good had spent a bit more time researching, he would find a better example to compare to the Chinese buying everything here. Costa Rica. I was down there 6 years ago and the Americans and Canadians owned nearly every piece of waterfront. The locals just could not compete with our money. Blue collar workers were outbidding local Doctors and Lawyers. There were no regulations to prevent this.
The result was that even though everyone knew the foreign money brought lots of jobs with the new developments (mostly low paying) - I heard a lot of resentment towards the new land-owning class.