[aminok]

Billionaires buying houses does not increase housing costs. You do not need to purchase a Single Family House in Vancouver to have housing. You can buy a condo, the prices of which are totally uncoupled from SFHs, or rent. If foreign investors were leaving the houses they buy empty, and thus removing units from the housing stock, you might be able to make a case for foreign investment negatively impacting Vancouver housing costs, but that's not what's happening. The percentage of homes in the Vancouver West Side, where foreign investors are exceptionally active, (edit to add: 'that are unoccupied') is only 3 percent, which is below the typical rate for major cities.

What this means is that foreigners are not leaving houses that they buy in Vancouver empty. They are being rented out. The rental cost in Vancouver are below Seattle's when you compare it to the median wage so then couver housing as far as rentals is actually more affordable than neighbouring Seattle.

[kohanz]

> You can buy a condo, the prices of which are totally uncoupled from SFHs

If domestic buyers can't afford SFH's and shift their attention to condos, this increases demand for condos, thus raising the price. It is practically impossible for the two to be "totally uncoupled".

[aianus]

> this increases demand for condos, thus raising the price

Condos are not supply-constrained. You can tear down like 6 detached houses and build 240 condos in that space.

In Toronto they're making over 100,000 new units a year: http://business.financialpost.com/personal-finance/mortgages...

[kohanz]

Toronto and Vancouver is an apples and oranges comparison when it comes to having space/land to build new structures.

[aianus]

Why's that? They're still building them in the downtown core, which is already way more developed than Vancouver's. There's probably some stupid NIMBY 'I need to keep my mountain views' stuff going on if they can't do the same in Vancouver.

[seanmcdirmid]

Are they renting them out? I've heard speculators buying housing and then just sitting on them are turning some Vancouver neighborhoods into host towns. Is there anywhere we can get occupancy numbers? Also, aren't Vancouver rents higher than Seattle?

[aminok]

The city of Vancouver did a very rigorous study, and found unoccupancy in the West Side, where much of the foreign investment has been going, at only 3 percent:

http://vancouver.ca/news-calendar/city-releases-comprehensiv...

Which is below the average for other major cities.

[seanmcdirmid]

Eh. But aren't they biased? They were going through a lot of effort to show that there wasn't a bubble, or that the market wasn't being targeted by the Chinese.

[aminok]

I put the possibility of them massaging the data in some way at very remote. This study had a lot of eyeballs on it so risk of getting caught would be too high for them to entertain. Moreoever, the CoV grunts who do the actual work, like doing studies, seem both competent and of high integrity, and I don't think they'd be willing to betray their duty to the public and try to create a false impression of the unoccupancy rate.

[allengeorge]

I'm also puzzled by some of the numbers they post.

They point out that non-occupancy in many other housing types is incredibly low (0% - 1%).

They then estimate condo non-occupancy as ~ 12.5% (I'd say that's a big deal, since most new housing stock is in condo form).

And finally point out that short-term-non-occupancy (aka. two months of the 4 they're counting) sits at ~ 10% across all housing types - without breaking out the numbers for condos alone, or clarifying whether this short-term-non-occupancy is on top of the non-occupancy numbers above.

Clarification welcome.

[seanmcdirmid]

They've been willfully ignorant to the numbers for some time. What is to say they aren't misinterpreting the data, fudging it, or ingoring factors like "more houses" or "more energy usage" while the number of people are dropping? This kind of thing goes on all the time here in Beijing, the only reliable way to determine vacancy is to count the lights that come on at night. All the other metrics, including energy consumption, are so gamed that they are useless.

[aminok]

They explain their methodology:

http://council.vancouver.ca/20160308/documents/rr1presentati...

Does not look easily gameable, and the authors don't strike me as being disingenuous.

[allengeorge]

So...I looked at their methodology, and I noticed one thing right off the bat:

They define a home as "unoccupied for the year" if its electricity usage is low during the non-heating months - aka. summer. This strikes me as flawed: summer is when you're most likely to be in Vancouver!

[lpaone]

I think you are naïve if you believe that a government wouldn't fudge a study to support their best interests (best interests in this case being that most of their top campaign contributors are in the real estate business (1)). Let me give you an example of this happening recently in regards to the Vancouver real estate market.

The provincial government released a study on July 7th, stating that only 3% of real estate transactions across BC were from foreign buyers (2). Nobody believed this number, and plenty of people called foul (3). Every single person I talked to involved in the market laughed at those numbers (it is hard not to know someone involved in the market here). The government used these numbers as proof that foreign buyers were not an issue in BC.

Only 3 weeks later on July 26th, the exact same ministry in the government released new data that said that foreign buyers accounted for more than 10% of the value of real estate transactions in Metro Vancouver, which is by far the largest real estate market in BC (4). They used this as proof that foreign buyers were indeed a problem.

This is a prime example of the ridiculous politics that are at play here.

Also of note, if you look at (4), you will see that foreign buyers aren't just buying houses in the exclusive and expensive West Side Vancouver neighbourhoods. According to the data, Burnaby and Richmond, both had 18% foreign buyers.

(1) - http://www.cbc.ca/news/canada/british-columbia/campaign-dono...

(2) - http://www.theglobeandmail.com/news/bc-government-releases-p...

(3) - https://www.biv.com/article/2016/7/asian-real-estate-confere...

(4) - http://www.cbc.ca/news/canada/british-columbia/vancouver-rea...

*Edit - formatting

[aminok]

The data fluctuates month to month. The data for both months was accurate. They may get political in how they present the data, but the way the collect and generate the data appears sound.