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When students speculate in real estate, Canadian commentators say “very impressive”.
David Eby, a housing commentator for the New Democratic Party of Canada (NDP), presented an asset document for the party’s study of residential sales in Point Gray in Vancouver (Point Grey) at a press conference on Wednesday, the Vancouver Sun reported.
The documents show that in Cape Gray, there are nine buyers of luxury homes with a total value of C $57 million, all marked as “students”. Moreover, as the names of the owners of luxury houses are all Hanyu Pinyin, these nine students are likely to be Chinese!
David Eby also specifically mentioned a mansion on West 8th Avenue. In April last year, the mansion was bought by a Chinese student for 7.19 million Canadian dollars (36.4 million yuan). In May, the classmate “Xuan Kai Huang” sold the house for 8.35 million Canadian dollars, making a full net profit of 1.16 million Canadian dollars (5.85 million yuan).
From this point of view, Zhou students can be regarded as the first of the “Gray Point Nine Young people” (just kidding). At a press conference on Wednesday, David Eby also cited the party’s study of 172 residential transactions in the Cape Gray area. The data show that the owners of nine high-priced properties in the Wenxigai area are students, of which six are registered owners, and the other three are dual owners, which are jointly owned by businessmen and students, businesswomen and students, unmarked professionals and students.
In addition, the above documents also show that about C $40 million of the properties owned by the nine owners come from bank loans.
Since the beginning of this year, the saying that “Chinese speculators drive up Canadian house prices” has been circulating in Canada.
Although there is no convincing evidence from Canadian officials on how much role Chinese buyers have played, Canadian officials said in a central bank report that demand from foreigners “does drive up house prices. This has led to a rise in home loans”; but Canadian house prices are indeed rising at a rate visible to the naked eye.
Vancouver is the sixth most expensive city in the world, according to a ranking based on the “price-to-income ratio” released by US economic consulting firm Longview Economics on Sept. 15, foreign media CNBC reported.
If you take a closer look at the trend in recent years, you will find that house prices in Vancouver always had ups and downs and remained roughly stable until 2016, but suddenly began to soar since 2016!
The government has to step in to control. Since Aug. 2, Canada’s BC province has imposed an additional 15 per cent housing transfer tax (property transfer tax) on overseas real estate investors, which is limited to the Greater Vancouver area, which has the largest number of foreign investors in BC province and Canada as a whole.
The effect of the “exclusion tax” was immediate. According to previous reports on Wall Street, house prices in Vancouver, which had risen for the 18th month in a row (2.3% in July), fell 20.7% in mid-August, according to Wall Street. In the first two weeks of August, property sales in the greater Vancouver area fell 85%.
The average house price in Vancouver fell to 1.47 million Canadian dollars (US $1.13 million) two weeks ago, the lowest level since September 2015, Phoenix New Media reported Monday.
As mentioned earlier, David Eby raised questions at the press conference. He said there was no sign that the students had declared their income to support the loans, so how could Canadian banks provide such high loans to students?
“is it the policy of the Bank of Canada that allows international students to speculate on real estate in Cape Gray?”
“I think the problem of bank lending is the main reason for the surge in house prices in Canada.” He called on the authorities to strengthen the supervision and management of real estate transactions, and special buyers should prove the source of their purchase funds.
In fact, when I heard about Tian Yu Zhou, I had a lot of doubts about the fact that students without a formal job could borrow millions of Canadian dollars to buy a house. At that time, every editor (WeChat: nbdnews) noticed that Imperial Commercial Bank of Canada had the following requirements for applying for housing mortgage loans: income and work proof; income level must be able to pay installments; at least 5% down payment.
In addition, if the applicant is not eligible for the loan, the guarantor is required to guarantee it; at the same time, to apply for a loan in British Columbia, the applicant must be at least 19 years of age.
According to internal documents from Scotiabank and Bank of Montreal, BMO, the bank instructed its loan staff not to identify the source of income for foreign customers as long as the down payment reached 50 per cent.
However, several banks have been penalized by Canadian federal regulators for lack of proof of income from foreign customers. Because if they cannot confirm that these customers have the ability to repay their loans for a long time, and that the customers have obtained the purchase money through legal means, the risks to the banks can be imagined.