This is not like the Bay Area. Vancouver has grown upwards and increased density aggressively for the last 20 years. But the housing market in Toronto and Vancouver didn't go through a correction like the US did in 2008. Constantly low interest rates, high immigration rates, and high foreign investment has led to astronomical housing prices and an unaffordable market.
To be fair, there are a lot of areas of Vancouver holding on to suburbanity far longer than they should. When you have rail transit stops surrounded by low-density bungalows, you can tell NIMBYism is winning.
There has actually been a massive amount of high rise development - its just questionable if the "type" of high rise inventory coming online is inline with the type of places people want to love. The bigger issue is a non significant number of people are buying the new construction inventory as well as pre-existing inventory and not moving in / not renting them out...
Arguably, the main driver of the problem is foreign purchase of investment properties which aren't rented. Speculation drives this further, as lots of people have made high returns on a market that 'can only go up'.
Another point that is not often raised is the crazy increases are mainly in detached houses. Condos and attached properties have increased a lot, but not nearly as frothy as detached houses. Suggests the type of purchase that is driving the increases.
http://www.news1130.com/2016/02/02/vancouver-house-price-new...
Although the first headline is not good news I'm afraid it adds to and is a product of the hysteria in Vancouver. Sadly, blaming foreign buyers is a foregone conclusion. Realize too that David Eby, the guy behind the report in the first headline, is a politician (of the opposition party) getting ready for a provincial election that's coming soon. The ruling Liberal party has already put ads on the tv.
I must be missing some part of the equation here. How is it possible that these properties are not being rented out? Even if the price of the homes are over-inflated, the owners should still be able to get some extra money out of such a capital asset?
Is there something that is tilting the balance the other way? I.e. Making renting out for some amount not worth it?
> How is it possible that these properties are not being rented out?
Maybe they are, and it's just all being conducted on a cash basis. Or if a Chinese owner is renting to another Chinese expat, they could be handling the rent payments in China (advantageous as it avoids moving the money outside China, which I am led to believe can be difficult and is one reason for the complex real-estate-based 'money parking' schemes in the first place).
The tax on "vacant" properties should probably be set equivalent to the income tax that one would pay on the average rent that you could extract from the property if it were fully rented. That would discourage actual vacancy and eliminate much of the incentive to have under-the-table renters.
One possible reason is that house prices have gone up so much in the past few years that people can sell quickly and make a huge profit. If you have people renting, you can't just kick them out immediately if you want to sell. Renters would be a liability in this case.
I don't know about Canada, but in California you can evict people in 30 days... If you (the tenant) really work the court system, maybe it'll take up to 50 days. 50 days should be enough time to kick someone out and put the house for sale.
Can't do that in Canada so quickly. In Toronto at least, the landlord is not allowed to evict the tenant even if they have stopped paying rent. It can take months and months of court visits.
One reasoning I heard is because our winters are so brutal, it would be inhumane to kick people out in the cold.
While I don't discount the possibility of the live-there-someday option, my understanding of it has always been that purchasing overseas real estate opens up some of the few opportunities for a Chinese national to move money out of the country and convert it into a foreign currency.
The ability for people to speculate on rising land values basically ensures that a large portion of prime land will be underused, or held out of use entirely.
If we shifted taxes away from production and onto land use in general, regardless of whether it is vacant or not, we would no longer see this underutilization of land, and also end the perverse incentives of taxes on productive activity.
This is nonsense. Have you been to Vancouver? It is adding new housing extremely aggressively. Anywhere you turn, you'll see a good dozen high-rises under construction. Five years ago, you'd have seen a different set of high-rises under construction. Five years before that, same story.
There's no question Vancouver is building, but it is not building enough of the right kind of housing (i.e. rental, non-luxury, and > 1 bedroom units).