I hesitate to write about this topic since I do not want to look like a whiner complaining about city council once again but it is too hard to ignore. Ward three councillor Nrinder Nann says wealthy buyers spend millions of dollars for homes in Hamilton and never live in them. What? Excuse me? Say again? The worst part is that other councillors were all ready to jump on the bandwagon until they realized it was a conflict of interest since some of them are landlords. Seriously this stuff has got to stop.
All it takes is some headline from somewhere else in the country for our councillors to jump on the bandwagon and put forth some out right bullshit that we have a problem or we also should be jumping on the bandwagons of small houses, alleyway housing, container housing whatever some millennial’s little mind can think up to solve a problem that doesn’t exist here. The headline reads “More than Half of Vancouver houses are back on the Market” so obviously here in Hamilton we have a problem with wealthy people buying properties and sitting on them to speculate. That’s right — wealthy people have so much money that they will buy a property — in HAMILTON — and leave it empty until the market soars so they make millions. Sound about right councillors?
Let’s get real and call out what is really happening. People buy properties and rent them out and since rents are high enough to cover the costs of the property they will break even, lose a little or make a little to carry the property and one day realize a profit since they invested in real estate and created a rental in a market that needs rentals. Then Sam Merulla states developers are buying in blocks, “They’ll buy two, three, four condominiums and they’ll flip them later,” he said. “They are buying in bulk.” I personally do not consider that buying in blocks unless you were buying 50 or plus units and a bank will lend up to six “doors” to the average person who qualifies so bulk would need to be a dozen or more but the point is this is not driving up the cost of properties and if Sam is so concerned as a landlord he can buy properties and rent them under value to help out his voters since he is a career politician being paid by us so why not help out your ward with affordable housing from your own pocket?
As for the properties sitting empty ask your boss, the mayor, since the LRT has bought a bunch of properties boarded up soon to be demolished for a train going nowhere and these empty lots are the only properties where wealthy people are sitting on properties and doing nothing with them today and for the next decade or so. Clean up your own house first before calling on a mysterious fictional wealthy person who is sitting on properties, and if there are any, they just might be waiting for the city to issue permits so they can develop and better the neighbourhoods they are investing in! V
Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at firstname.lastname@example.org.