Vancouver's Chinese property investors

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Batman

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#1763412 12-Apr-2017 20:52

mismanagement of $.

they have high debt (who knows why they all need a 2 new utes each, probably on a $200 business mobile plan, a new galaxy s7, etc etc etc), and need high cash flow to feed their "business" - pay staff who are months behind schedule, lease office, etc etc

when the bank pulls the plug in servicing their debt = bust

alliao

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#1763492 12-Apr-2017 23:00

If I'm not mistaken I'd wager there's a monopoly power in the housing cost side of equation moping up all profits. Capitals win, those builders are just muscles scrapping for scrapes.

mattwnz

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#1763494 12-Apr-2017 23:28

tdgeek:

mattwnz:

NZ is in a very difficult situation with housing, which has effectively created two separate classes of people. The government has allowed this to get worse, as National called this a housing crisis when Labour were still in power. Nearly a decade later, they don't call it a housing crisis, even though everyone else does, and even though it has only gotten worse.

I don't think any of labours new policies will fix the problems with the housing crisis, they are simply a band aid and potentially could create ghettos. National looks to have trumped them on those polices anyway. The real solutions will hurt people. So what the government appear to be hoping for is that the problem will inflate away over time, and they will just put a few policies in place to mop up the people at the bottom. They aren't going to want to alienate their voter bases, as so many people have self interests in housing in NZ. But I think that the cheap overseas money is going to dry up(if it hasn't already), and we may see a building bust next year as a result.

Its a hard one. While on the one hand, free country, supply and demand, or regulate everything.

What I cant get is builders go broke. Yet there is a housing crisis, so they should be on a high.

And no one is on the streets, so I need a clarification on a housing crisis as when I read we bring in x number of people every year and dont build enough houses, where are all these new people sleeping? Is it a housing crisis or an owner crisis?

It is not generally the ones coming in that aren't housed. The government are apparently paying for motel rooms as temporarily accommodation. Some others appear to be living out of cars. There was a story last night of a family of 5 sleeping in their people mover vehicle by the sea.

As reported the The Economist, NZ has some of the most unaffordable houses in the world . Read http://www.radionz.co.nz/news/national/326391/nz-outpacing-developed-world-in-house-prices-economist , and that graph shows how bad it is. I can't see it being a soft landing

Building companies can go broke if cheap money dries up. If banks aren't lending cheap money, then it will affect the ability to do new builds.

NZ is a country that needs some regulation, due to the small size of the market, and there is much needed regulation in some industries. eg Areas of telco industry. I believe for essentials like food and housing, there should be a certain level of regulation in NZ.

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#1763510 13-Apr-2017 01:00

mattwnz: Also P contamination is a huge risk for anyone renting out a house. Even someone just using it in a house can create a positive test result.

I presume that this problem is not unique to NZ? How is it dealt with elsewhere?

tdgeek

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#1763519 13-Apr-2017 06:37

mattwnz:

tdgeek:

mattwnz:

NZ is in a very difficult situation with housing, which has effectively created two separate classes of people. The government has allowed this to get worse, as National called this a housing crisis when Labour were still in power. Nearly a decade later, they don't call it a housing crisis, even though everyone else does, and even though it has only gotten worse.

I don't think any of labours new policies will fix the problems with the housing crisis, they are simply a band aid and potentially could create ghettos. National looks to have trumped them on those polices anyway. The real solutions will hurt people. So what the government appear to be hoping for is that the problem will inflate away over time, and they will just put a few policies in place to mop up the people at the bottom. They aren't going to want to alienate their voter bases, as so many people have self interests in housing in NZ. But I think that the cheap overseas money is going to dry up(if it hasn't already), and we may see a building bust next year as a result.

Its a hard one. While on the one hand, free country, supply and demand, or regulate everything.

What I cant get is builders go broke. Yet there is a housing crisis, so they should be on a high.

And no one is on the streets, so I need a clarification on a housing crisis as when I read we bring in x number of people every year and dont build enough houses, where are all these new people sleeping? Is it a housing crisis or an owner crisis?

It is not generally the ones coming in that aren't housed. The government are apparently paying for motel rooms as temporarily accommodation. Some others appear to be living out of cars. There was a story last night of a family of 5 sleeping in their people mover vehicle by the sea.

As reported the The Economist, NZ has some of the most unaffordable houses in the world . Read http://www.radionz.co.nz/news/national/326391/nz-outpacing-developed-world-in-house-prices-economist , and that graph shows how bad it is. I can't see it being a soft landing

Building companies can go broke if cheap money dries up. If banks aren't lending cheap money, then it will affect the ability to do new builds.

NZ is a country that needs some regulation, due to the small size of the market, and there is much needed regulation in some industries. eg Areas of telco industry. I believe for essentials like food and housing, there should be a certain level of regulation in NZ.

Regulation in housing would be tough, IMHO. But they can somehow out a lid on land prices, by getting rid of all these extra costs. Buy up trans of land, and get houses on them at a decent land price. Tax second homes more with CGT. Give incentives to build, such as underwriting a no deposit. Underwrite a mortgage advance of a first home purchase that is a do up. New residents with PR have to rent or build, not buy.

BinaryLimited

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#1763573 13-Apr-2017 09:00

UHD:

When foreign investment is less than 10% of the issue and Auckland is already as bad as it is then you know we'll never be like Vancouver. The existing Kiwi investors will never permit it.

i didnt realise we (kiwi investors) actually have a say in anything?

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#1763615 13-Apr-2017 09:56

BinaryLimited:

UHD:

When foreign investment is less than 10% of the issue and Auckland is already as bad as it is then you know we'll never be like Vancouver. The existing Kiwi investors will never permit it.

i didnt realise we (kiwi investors) actually have a say in anything?

Given the state of the market, Kiwi investors have managed to keep a lot of foreign money out of residential property investment and as long as the capital gains continue as they have been they likely will continue to do so by mopping up the vast majority of investment opportunity.

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Batman

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#1763775 13-Apr-2017 12:57

I read here everybody is still talking about Auckland property crash - I'm not so sure ... D Trump and co are selling condos for tens of millions more than a few years ago. If only 0.1% of the world's rich buy in NZ, you have a problem with further price rises.

mattwnz

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#1763796 13-Apr-2017 13:33

UHD:

BinaryLimited:

UHD:

When foreign investment is less than 10% of the issue and Auckland is already as bad as it is then you know we'll never be like Vancouver. The existing Kiwi investors will never permit it.

i didnt realise we (kiwi investors) actually have a say in anything?

Given the state of the market, Kiwi investors have managed to keep a lot of foreign money out of residential property investment and as long as the capital gains continue as they have been they likely will continue to do so by mopping up the vast majority of investment opportunity.

We don't really know how much foreign money is in the residential market as the government hasn't been keeping any statistics on excactly who is buying NZ houses. The new recent stats being recorded are only measuring certain things. Apparently though there are a lot of zombie houses in Auckland that are not being lived in, as apparently they are more hassle to rent out, than leave empty. Anyone up there noticed a lot of empty houses?

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#1763804 13-Apr-2017 13:36

From the article mattwnz that pointed out

http://www.economist.com/blogs/graphicdetail/2017/03/daily-chart-6

"... In America, Chinese investors bought some 29,000 homes in the 12 months to March 2016 with a total value of $27bn, according to the National Association of Realtors.

Much of this money is focused on a handful of cities: Seattle, San Francisco, New York and Miami. Foreign money has helped propel skyrocketing prices in other places, too.

In Vancouver, home values have risen by 47% in four years; in London they have risen by 54%.

In Auckland the rise has been a whopping 75%.

The influence of foreign capital flows on housing markets is being scrutinised, particularly as affordability becomes ever more stretched ..."

mattwnz

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#1763987 13-Apr-2017 18:01

I think NZ is somewhat in denial about the problem, and think that the problem with house price inflation will just go away over time. But the knock on effects, including increasing rent is already causing problems, as it needs wages to rise signifincantly more. Wages can't just magically rise if NZ isn't increasing productivity to match the house price rise.

kingdragonfly

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#1777056 7-May-2017 10:03

http://money.cnn.com/2017/05/06/news/jared-kushner-nicole-family-event/index.html

It worked in Vancouver ;)

"The Kushner family hopes to lure investments from wealthy business owners in China with the promise of American visas.

Nicole Kushner Meyer, the sister of White House adviser and President Trump's son-in-law Jared Kushner, spoke at an event in Beijing on Saturday. She was marketing a Kushner-owned property in New Jersey -- invest in the development and get into the United States on a so-called EB-5 visa.

The EB-5 visa allows immigrants a path to a green card if they invest more than $500,000 in a project that creates jobs in the United States.

An ad for the event, held at a Ritz-Carlton hotel, said 'Invest $500,000 and immigrate to the United States.'

The EB-5 visa has been used by the Trump and Kushner family businesses. Foreigners, particularly wealthy Chinese nationals, have used the EB-5 program as a ticket into the states. And that promise has helped attract foreign investments for U.S. real estate projects.

President Trump has taken an anti-immigration stance and vowed to severely tighten the use of work visas. The EB-5 program has come under fire by members of Congress on both sides of the aisle.

Lawmakers say the program essentially sells citizenship to high-income foreigners. "

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