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The most basic economic principle is, when there is a rise in demand, the invisible force of supply will kick in, and this is how economic growth is generated. For those who want to blame the housing crisis on immigrants, let's think about how our economy would look like if B.C. or Canada did not have the intake and growth brought by immigrants.
Sotheby's Int'l Realty
There's lots of talk these about how "terrible" it is that "the Chinese are driving up housing prices" in Canada, especially in B.C.'s Lower Mainland. As usual, when people jump on a bandwagon or take hold of a hot button issue, some perspective is a good idea.
The fact that the Home Price Index has obscured the extreme and unusual volatility in average detached home prices may itself be a problem. Few home buyers or sellers are likely aware that it is even occurring. It certainly hasn't been widely reported. Since early 2011, average house prices have changed direction by a factor of 10 per cent or more five times. Such volatility had never happened before, and the swings are getting wilder.
While China's policy change has impacted investors' cash flow in the short term, it hasn't curbed their enthusiasm for Vancouver real estate. The sudden rise and fall in real estate prices that we're seeing now in China, as well as fluctuations in the overall economy, mean that people view investing there as no less risky than placing bets on a baccarat table. For many Chinese investors, parking money in Vancouver feels as safe as investing in treasury bills.
With all the doom and gloom stories about Vancouver’s housing bubble bursting, some industry experts shed some light on the Chinese entrepreneurs who continue to invest in the city’s properties. Most...