Wednesday, November 30, 2011

Is it a myth?

Some bear blogs are having a discussion as to whether the HAM buyers are driving our market or not.

My opinion is simple, in some areas they ARE they market. In others, like Pitt Meadows or Langley they are not much of a factor.

Take the North Shore. here is my anecdotal info. This year, I have had 3 friends sell their places. One bought smaller and banked the difference, one is renting and one moved to the Island with his family. ALL 3 sold to mainland Chinese buyers for MUCH higher than they had ever hoped for and in two cases for higher than their listing price as a HAM bidding war broke out.

Over the week-end I carried out my own unscientific experiment. I called up 5 newly listed rental homes in West Van on craigslist. 3 had Chinese agents who quickly admitted that their clients had just bought the homes and in fact two of them didn't even have possession yet. The other two were professionals agents- one volunteered that their client was from the Mainland and had just purchased it as an investment and had no intention of occupying for now. the last one would not reveal the ownership.

Based on my experience therefore it would seem that in some parts of Vancouver, the HAM money ARE the buyers PERIOD. The likelihood of being able to compete in the higher end market after 40% taxes unless you run a goldmine or are the CEO of Lululemon is zero...

Remember Landcor said that they estimate 74% of buyers in certain areas of Vancouver to be from off-shore. That is an astounding number and were it anywhere else in the world, there would be an outcry to legislate and regulate, but not here where we are the keepers of Hot money!

The only up-side I can see is that some people are making out like bandits, like my friends who sold, and some realtors who will hopefully be paying some taxes, and the Province will be getting the property transfer tax. It is btw desperate for any money it can get it's hands on with the deficit soaring, so if you think they are about to kill this golden goose, think again.