gary17

It's not. It's a very small sample of the high end market. "Routledge compiled the data by extrapolating from a Financial Times survey of 77 high-end buyers and data from the U.S. National Association of Realtors." Wow, 77 high-end buyers turns into media articles about the Chinese taking over all of Vancouver. There's a constant flow of these. Once the idea has taken root, confirmation bias does the rest. Every time someone who looks asian is seen, it only confirms what people think (even if they're Canadian). Reminds me of the fake asian buyers from news stories not that long ago. Realtors rented a yellow helicopter and had Canadians of asian heritage (one who works as a condo promoters, iirc) pose as rich chinese buyers for TV cameras.. http://www.greaterfool.ca/2015/05/12/the-frauds/ http://www.greaterfool.ca/2013/02/14/the-myth-of-ham/ Liberty - I take it you are not from Vancouver.... If you go to the only two high schools in West Vancouver; pretty much all the high schools in Vancouver West side and the two universities - SFU & UBC and the local colleges.... Then you might find the 33% is not unrealistic. Let's hope the federal government find a way to measure this more reliably. But you don't need hard scientific data to know it is the Chinese that's driving up real estate in Vancouver - Gary

I doubt this "back of the envelope" is anything by myth. Victoria's real-estate board tracks these things, unlike vancouver, and in 2013 only 1.64% of buyers were foreign (most from the USA). Now that's not vancouver, but pretty unlikely that Vancouver next door is orders of magnitude different. http://origin.library.constantcontact.com/download/get/file/1116729122123-37/Buyers+Origins+20130101+to+20131231.pdf Victoria is a 2h ferry ride away. that's very different.

NB estimates 1/3 of Vancouver homes bought by Chinese http://www.bloomberg.com/news/articles/2016-03-23/chinese-buy-one-third-of-vancouver-homes-national-bank-estimate

It will be interesting if any of this will lead to some break on the rapidly accelerating bubble lol http://www.theglobeandmail.com/news/british-columbia/bc-premier-vows-to-end-shadow-flipping/article29289313/

I'm renting. Would you ever buy? Under what condition in this country would you enter the RE market?

Asians use leverage because the bank deposit rates in China / Taiwan / Hong Kong are higher than the mortgage rates in Canada HSBC would lend you X based on deposits in GIC in their Asian branches. and they just pay the mortgage - but the funds are secured. Further , this practice also demands higher down payment - I believe 30% or more - my concern with this is if the Chinese economy has a hard landing , our banks will be repossessing some of these Properties. will they be worth what they are now ?

the best way to invest in Canadian real estate, however, is to be a resident for income purposes. this is because the principal residence is completely tax free. so what I've often seen is the husband is a non resident - working somewhere in Asia - and the house is in the child or wife 's name - who are residents - and enjoy tax free gains

i know from this webiste we can look at statistics about inventory http://www.rebgv.org/home-price-index the 'active' listing is at all time low - very few "asking"; and many "bids" if rich people don't spend money in vancouver real estate; what else should they do? rich people like buying real estates together. they also like 2nd citizenship (no diff than Conrad Black liked a British citizenship) - for most in Asia , Canada is the most easy to get; and close enough to the US but not in the US.

How much money do you think a Chinese immigrant net worth is - buying a $3M house + $800K for the government ? They probably also know they won't be able to earn the same kind of living in Canada - their lifestyle in Asia is probably costing the family $100K ~ $200K / year. Do the math - they have to have well over $500K earnings and a lot of money saved up before committing to moving to another country for the next 10 or 15 years or whatever for the length of the children's study.

Source? don't need one - just look around in my own family, their friends, high school friends, university classmates and you can confirm what everybody knows here. mom and dad are in a group of oversea chinese - there are a few exceptions but most are extremely wealthy. we are the poor ones... i don't see asian taxi drivers , do you?

http://www.bcstats.gov.bc.ca/Publications/Infoline/15-11-10/Issue_15-74.aspx Most foreigners have no income in BC or Canada - yet they are minting well over $500K at 15% tax rate in Asia.

Also - most of the prices appreciation that's gone up is since last summer (2015 April) - I believe since then there's max 30 year amortization; and 10% down payment for homes over $700K - (i don't think there's any house under $700K in metro vancouver).

Sort of in the industry - We are actively in the market looking and making low ball offers lol

Liberty & Wisdom are you guys from Vancouver? I think most of these purchases are just ordinary people looking to grow the family - we have a few luxury real estates sold to Chinese newcomers - ($3 ~ 10M) baby boomers are therefore cashing out to find a cheaper place - such as a large condo or a house outside of Metro Vancouver (~ 1.5M); keep the change for travelling / medical needs (~1M) and anything left goes towards helping the kids to buy their first house (~0.5 ~ 1M). The kids who got help can buy a $1.5M ~ 2M house with parent's downpayment, savings, and a $800K mortgage?

So didn't HK have a real estate crash before? Didn't Londo , Paris , New York , etc do too? But why do they continue to be the most expensive places on the planet? So if Vancouver has a 20% correction - and then over the next 10 years go up another 50% - what's the risk here ?

another thought I had was why haven't we heard the real estate meltdown in Calgary and Edminton amid the worst oil crisis in recent history - if Edmonton is down 5% is jt something we should expect to see in Vancouver when we see the eventual correction ?

So how do we explain the phenomenon that many listings in Vancouver are now getting multiple offers - so for each one accepted offer there are 4 or 5 or even more groups that have not found a "home". I made an offer for a duplex a few weeks ago - I went $100k over asking but was the bottom 3 of 12 offers - the accepted offer was $221k over asking. I am and many of those making The offer are not developers speculating. we are simply trying to find a place to live ! I wonder if there is data from census or whatever that would allow us to look at the demand side of the market more scientifically.

Both of these are true where I live as well. I hear both arguments a lot. Here houses are primarily overvalued due to taxation rules by the government (you can subtract mortgage payment from income taxes) but that will change eventually. No way I'll buy a house for these ridiculous prices. I'll start to slowly consider it after the prices drop by at least 50% from here (which I doubt they will). Another thing that most people don't realize: If you have a huge mortgage, you are renting, even if you don't realize it. Rather than renting a house or an apartment, you are renting a big pile of money from the bank, which you then turned around and bought house with. If the cost of paying interests on that pile of money plus maintenance and taxes (all the thing you don't pay as a renter) are higher than the rent on the equivalent property, why buy it? By saving the difference (and more) I can build equity faster, with less hassle, and if I wait for a less overheated market to buy, I can save on that side too (and all the saved interest over time). Except renting has no upside; owning does ! That's what the RE-owners will tell you LOL.

I'd argue that your endpoint for the U.S. is skewing the data. The housing market in the U.S. is not functioning properly. So you can say that Canada is overvalued, relative to the U.S. But it might be more accurate to say the U.S. is undervalued, relative to Canada. Both are probably true but using the U.S. as your measuring stick exaggerates the overvaluation. You don't agree that the US was in a housing bubble in 2007 and that Canada is now way way higher than that point? Other indicators are also pretty high, like the 165% debt-to-income level, rents-to-buying ratios, inflation has been low and house prices usually track inflation, etc. Liberty I agree that Canada's housing market - especially in Vancouver , where I am, has gone nuts and a correction is overdue. However, I do not believe we have the same issue as that of the US bubble experience in 2007 /08 though --

i personally know of quite a few family friends and relatives just buying up lots and holding... not developing. many Asians would save money in land rather than in a savings account lol

homes aren't trading above replacement value - it's the lots - the dirt - that's worth a fortune. a house of $1.5M is $1.45M in the price of the lot; not the house!

Does anyone know if the prefer shares can be bought using margin ? (From Interactive brokers?) TIA

Hi Racemize Very nicely written and informative study as always ! I think one point to add would be that for these high growth companies that will do well over the long term (even if an investor pays a higher price) --- is that they have a sustained competitive advantage over the investor's time horizon. Perhaps this is why Buffett insists on high quality businesses with a moat; such that it would be okay to pay a 'reasonable price' for a wonderful business. For me I like to think of high ROE as a measure of a business with a moat. Gary

Merry Christmas everybody ! hope 2016 will be a very profitable year for all :))

hi Lance what's your thesis on Lancashire ? why did it have a large 25% correction over last few days , aside from the nice dividend it just sent out ? am i reading correctly it paid about 1 pound of dividends in 2015 alone ?