Opinion Column

China syndrome paralyzing B.C.’s politicians

By Bill Tieleman, News, Views, and Attitude – 24 hours

GETTY IMAGES

GETTY IMAGES

“One simple conclusion — a massive amount of money from China entered the Vancouver real estate market.” — Josh Gordon, SFU

 

Call it the “China Syndrome” — an unfortunate paralysis afflicting Canadian politicians — stopping them from speaking the truth about what is happening to B.C.’s housing market.

The reality is an enormous amount of Chinese capital, estimated by the National Bank of Canada at $12.7 billion, was spent in Vancouver alone in 2015 on real estate — that’s one-third of all sales.

An estimated US$1 trillion left China in the last 18 months seeking safe investments — and much of it came to B.C.

And there’s much evidence of what most people in Metro Vancouver already believe based on what they see — that buyers from China are scooping up vast swaths of the available residential homes and driving prices sky high and out of reach of ordinary Canadians.

University of B.C. business professor Tom Davidoff agrees.

“I believe a flood of cash looking to get out of — this year it’s China, who knows next time — rich people who want to go to a low-tax, low-regulation, high-safety environment, great physical space, are going to want to come to Vancouver,” Davidoff said.

But federal, municipal and — especially — provincial politicians are all scared witless to say out loud what everyone else knows. We are letting ultra-wealthy Chinese and other investors make housing in not just Metro Vancouver, but Victoria and other regions completely unaffordable.

Last week, I proposed the B.C. government ban sales of residential property to foreigners for six months — to create a cooling-off period and find longer-term solutions.

While some thought that was xenophobic, SFU professor Josh Gordon has released a detailed study that says stating the facts about Chinese buyers is not racism.

“The problem is that the money is foreign, and that it is sufficient to seriously distort the housing market, not that it is Chinese money,” Gordon writes.

Exactly.

And as Davidoff says: “As long as money floods in, in the long run this is going to be a global playground for the elite, and not a place to live and work, a place to have money and not to make money.”

Bill Tieleman is a former NDP strategist. Read his blog at http://billtieleman.blogspot.com or Email: weststar@telus.net Twitter: @BillTieleman 

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