They Just Have Tons Of Free Capital
A report from Mansion Global. “Canadians have bought significantly more expensive homes in the United States over the past year, as they look to their southern neighbor for sunny, high-end vacation spots in places like Florida, Arizona and California, according to the National Association of Realtors. Between April 2016 and March 2017, Canadians doubled the amount spent in the U.S., a sum of $19 billion on mostly vacation homes and residential investment properties, according to a report the association released Tuesday. Canada’s burning hot housing market, particularly in Toronto and Vancouver, has fueled purchases in the U.S., as baby boomers cash out on their long-time family homes in Canada and use the spoils to pick up amenity-rich second homes in the U.S.”
“‘We’ve had such a dial up in prices,’ said Toronto-based broker Janice Fox of Hazelton Real Estate. ‘Canadians are are selling homes for prices they never could have imagined and that’s allowing them to buy vacation homes for prices they never could have imagined. They just have tons of free capital.’”
From North Shore News in Canada. “A West Vancouver woman says she was shocked and saddened to see an anti-Chinese slur spray-painted on the West Vancouver Community Centre on Monday. The graffiti included a racist epithet followed by the phrase: Deserve To Die scrawled on a wall near a playing field. ‘Since Trump came into power, it just seems people are more outspoken,’ noted Lillian Salchner, who reported the graffiti.”
“North Shore Multicultural Society community connections manager Meharoona Ghani has led conversations with North Shore residents from a variety of backgrounds and found the common theme was fear. Much of that fear is based on the housing crisis, where many speakers uttered the phrase: ‘I don’t want to sound racist, but …’ during discussions about high real estate prices and vacant homes.”
From Quartz on China. “An online essay titled ‘Beijing Has 20 Million People Pretending to Have a Life Here’ by Chinese writer and blogger Zhang Wumao became a viral hit on WeChat and Weibo after it was published on the author’s WeChat account on July 23. The essay argues that Beijing has been overrun by migrant workers or waidiren ‘people from outside the city’, and that these ‘outsiders’ have turned China’s capital into a place with staggering house prices and heavy traffic that lacks soul. The essay describes how Beijing has become so big, so full, and so expensive, that life has virtually become unsustainable. The result of Beijing’s transformation, according to the post, is that its residents, both locals and immigrants, just ‘pretend to live there,’ leading ‘fake lives.’”
“He goes on to mock the old residents of Beijing, who still have the upper hand in the real-estate market despite the flood of new immigrants, all owning ‘five-room houses.’ The old Beijingers lead very different lives from the migrant workers, who are caught in a negative spiral of hard work, no social life, and finding a place to settle down.”
“He concludes his article by highlighting the recent demolishment of old Beijing shops and restaurants, saying that the city is being renovated but is becoming less livable. ‘Those who chase their dreams of success are now escaping [Beijing]. They’re off to Australia, New Zealand, Canada, or the west coast of the United States.’”
“Zhang’s online essay about Beijing spread like wildfire on WeChat and Weibo on July 23. It was viewed over 5 million times within an evening and soon became a trending article on WeChat. It triggered wide debate across Chinese social media on the lives of people in Beijing.”
“But on July 25, the full text was removed from all social media accounts and Chinese online news sites. Its hashtag on Weibo is now no longer accessible. The article also disappeared from Zhang’s WeChat account.”
The Miami Herald in Florida. “A federal program that has help fund dozens of big new South Florida business projects over the past decade by swapping U.S. visas and green cards for foreign investment dollars is teetering on the brink of political extinction, according to its supporters. The EB-5 visa program, which by the estimate of the investment community has funneled more than $18 billion in overseas cash into U.S. business development since 2008 — including hundreds of millions of dollars in Florida — will expire on Sept. 30 unless Congress renews it.”
“‘I think Sept. 30 is the drop-dead for renewal,’ said Miami immigration attorney Tammy Fox-Issicoff, who frequently works with EB-5 investors. ‘And I mean that’s the drop-dead date for a full renewal. We’ve had a number of short extensions. That’s killing the program’s credibility with foreign investors who might like to join. Nobody wants to put half a million bucks into something that might be gone in three months.’”
“EB-5s didn’t really take off until 2009, when the Great Recession dried up commercial lending around the United States. As banks and other traditional credit sources retrenched, businesses started using EB-5 investment to patch the holes they left. Developers of the 60-story Paramount condo tower at the Miami Worldcenter mixed-use project under construction in downtown Miami say that EB-5 visas have been not a key element in their financing more than $50 million of it — but they say they have become an unexpected marketing tool for the project.”
“‘Four of the 10 units we sold in June went to someone who came to the sales center intending to buy an EB-5 and bought a condo instead,’ said Peggy Fucci, CEO of the real estate firm OneWorld Properties, the exclusive broker on the Paramount tower. Potential EB-5 investors have pockets deep enough to buy a condo at the tower, where prices start at $700,000.”
