It doesn’t matter where you look these days, property prices are skyrocketing everywhere.
Even the big banks in Canada are saying it’s a problem, asking the feds last week to step in and cool off the market.
Just this past weekend Mayor Robertson was calling once again for a speculation tax.
And now the problem has stretched into the suburbs, which have traditionally been affordable places for families to settle.
West says he started to hear from people in his community awhile ago about the high prices they were being asked to pay for modest homes.
“People were being outbid, homes started going for more than a hundred thousands dollars over asking. So you were getting modest homes in Port Coquitlam of 2100 square feet that were going for over a million dollars.”
Are affordable family neighbourhoods going to the way of the Dodo bird?
He says Port Coquitlam has traditionally been the affordable place that people have moved to when they expect to have a young family and need to get something bigger and to raise their kids in a nice community.
“That’s what my parents did. They moved from North Burnaby to Poco in the eighties, to be able to have a small house with a back yard to raise my sister and I. And we’re losing that. And our community unfortunately is being inflicted with what’s happening all over the region and people are being priced out of their own communities.”
He says not that long ago a home on his mom’s street sold for $1.3 million dollars. These are homes that were purchased in the early 90s for $150,000-$200,000.
Agents buying up entire blocks of houses, only to leave them sitting empty
West says he recently got a call from a resident who told him about a real estate agent buying homes up on his block. The agent knocked on the homeowners door just before Christmas and offered him $800,000 for his home, cash offer, no saying he was buying up homes on the block.
“He first knocked on his door just before Christmas and he said, “We’re buying up this whole block, I’ve bought a bunch of your neighbour’s homes, I’ll give you $800K for your home.” And the guy said “well, my home’s not for sale”. Guy went away and sure enough he’s been buying up homes on that block in our community, and this guy (homeowner) is the last holdout. He’s bought other homes on that block, all cash offers, no subjects, doesn’t even want to look in the home to see what it looks it.”
West says the resident called him last week after the realtor showed up at his door again, this time offering $1.3 million for the home.
“So that’s what we’re seeing, and unfortunately what’s happened is it’s priced people out of our community and it means now on that block some of those homes are sitting vacant.”
LISTEN to the full interview here:
The off-shore debate
West says he thinks a lot of the money is coming from off-shore.
“The simple fact is when you look at the capital outpour from China, you know that money is going somewhere.”
He thinks enough data and statistics has been gathered to confirm that there’s a significant amount of off-shore money pouring into our real estate market and driving up prices.
“And it’s for purely investment speculative purposes, and that is certainly the case in terms of the Port Coquitlam example that the fellow told me about.”
But according to Finance Minister Mike de Jong, we only have anecdotal stories, but we don’t have the hard facts and data to say for sure that it’s foreign money.
Are municipalities part of the problem?
The provincial government also says the municipal governments are part of the problem because they aren’t moving quickly enough to get a greater supply on the market.
West says that is definitely not the case in Poco, a community that has “exploded in size” over the past ten years.
“The amount of building and housing that is going on is tremendous. Those development are going up as fast as developers can get them up. You come drive through town and you’ll see new housing, new townhomes, new condos being put all over the place.”
But it doesn’t make a dent, says West, because when a realtor representing someone with a lot of money can go and buy a whole townhouse block, that’s half a dozen units gone and unavailable to other families.
How Australia is tackling the problem
West says in Australia, not only have they put in a tax on off-shore speculation, but they’ve also placed restrictions on the type of real estate that can be purchased by off-shore buyers.
“They’ve placed some restrictions in Australia that says if you’re an off-shore buyer you can’t go in and buy up ten townhouses in a new development…or ten condos in a new building.”
West says similar restrictions in B.C. could be part of the solution to solving the growing housing crisis.