After I wrote this week’s post about Chinese homebuyers in Vancouver, I was surprised to learn about the racism debate that flared up in the city / on Twitter. I guess this really is a touchy subject. (See: #donthave1million)
My reaction to the research was: Great to see someone (Andy Yan) putting in the time to try and better understand a market phenomenon. It’s painful how opaque real estate markets can be. Let’s get even more data so that we can make even better policy decisions. I didn’t read it as: let’s deliberately single out a race.
Because the reality is that we all knew this was happening.
Bloomberg recently published an interesting and related article that talks about China’s money exodus and how the Chinese logistically get their money out of the country. There are restrictions in place.
But first, here are two snippets from Bloomberg that describe the order of magnitude we’re talking about:
This flood of cash is being felt around the world, driving up real estate prices in Sydney, New York, Hong Kong and Vancouver. The Chinese spent almost $30 billion on U.S. homes in the year ending last March, making them the biggest foreign buyers of real estate. Their average purchase price: about $832,000.
In total, UBS Group estimated that $324 billion moved out last year. While this year’s numbers aren’t yet in, during the three weeks in August after China devalued its currency, Goldman Sachs calculated that another $200 billion may have left.
Now here’s how it is being done:
It works like this: Chinese come to Hong Kong and open a bank account. Then they go to a money-change shop, which provides a mainland bank account number for the customer to make a domestic transfer from his or her account inside China. As soon as that transaction is confirmed, typically in just two hours, the Hong Kong money changer then transfers the equivalent in Hong Kong or U.S. dollars or any other foreign currency into the client’s Hong Kong account. Technically, no money crosses the border – both transactions are completed by domestic transfers.
And here’s a snippet that stood out for me because it shows how easy this has become:
While the first exchange has to be set up face-to-face, customers can place future orders via instant-messaging services such as WhatsApp or WeChat, and money changers set no limit on how much money they can move.
Given the scale and complexity of this issue – housing affordability – I have to believe that cities and policy makers would be far better off with more, rather than less, information. I hope we can work towards that.
“The wisdom of life consists in the elimination of non-essentials.” – Lin Yutang
Yesterday I posted the above photo on social media with the caption:
“This year I decided to go ALL OUT for Halloween.”
A friend then responded and said:
“A minimalist does Halloween. Love it.”
I’ve been called a minimalist many times before. And it is certainly something that I think about. Oftentimes I feel like life is a constant battle against physical and mental clutter. But that the more you can rid yourself of that clutter, the happier and freer you will feel.
It’s why I scan most of my paperwork into Evernote and then throw out the hard copies. It’s why I tend to wear a lot of white dress shirts and black t-shirts – it keeps life simple and reduces decision making. And it’s one of the reasons I’m so attracted to laneway houses and small spaces. I don’t think most of us need as much home as we think we do.
If this is something that also interests you, I recommend checking out a blog called The Minimalists. I just recently subscribed to them.
I was speaking with a friend this morning and he told me that he had a Pavlovian association between me and laneways. That made me happy.
If you’re a regular reader of this blog, you’ve heard me go on and on about the great potential of laneways and laneway housing (accessory dwelling units) in Toronto, as well as in other cities around the world.
So I won’t do that today. Instead, I’m going to link to a report that was just released by the Pembina Institute called Make Way for Laneway: Providing more housing options for the Greater Toronto Area.
The report is obviously about Toronto, but there’s no reason that the lessons and ideas won’t also apply to your city. So I would encourage you to give it a read.
For those of you who have emailed me about my own laneway house, the project is still on hold. And it will likely remain that way until the city becomes a bit more accepting of this housing typology. Hopefully that will happen soon.