On October 30, 2023, IAAO Past President Wayne Llewellyn CAE AACI helped share your knowledge on Politics and the Effects on Real Estate Value via zoom. This event was organized by FIABCI World Council of Experts where Dr.Sopon Pornchokchai, President, Agency for Real Estate Affairs was the Council President. The following is his interview:
Thank you for the support and interest from Thailand and your ongoing efforts in promoting awareness of real estate issues around the world. Dr, Sopon is a true leader and I consider it a great honor to know him and be invited to speak with you today.
The last time Dr.Sopon and I met in person was in 2013 in Xiamen, China at an event just before I returned to Canada. At that time I was as impressed as the first time I met him about ten years earlier and found his interests to be compatible with mine. It is for those reasons I agreed to do a presentation on the economic, social, political and culture impacts on property values.
1. May you kindly introduce about yourself and your background
In terms of an introduction I must say that the comments I am about to make are in no way to be taken as comments on behalf of, or to officially represent the policies, standards or practices of the International Association of Assessing Officers. Yes, I was president in 2004/2005 and around 2018 I retired the use of the Certified Assessment Valuator designation and about a decade earlier had retired professional designations with both the Appraisal Institute of Canada and the Alberta Assessors Association. I have also held Senior Instructor certifications with the AIC and the IAAO and was one of only two Canadian instructors of the Uniform Standards of Professional Appraisal Practice promulgated by the United States Appraisal Foundation.
But my experiences have led me to look at larger issues surrounding property values and my training has also helped me take a view that is much larger than just local factors affecting supply and demand.
2. As I know you in 2005 you were the President of IAAO. Kindly tell us about the IAAO.
When I was president, the organization was focused on the three pillars – namely property appraisal, assessment administration and property tax policies. I believe those pillars are still alive today and are supported by a broad range of educational offerings, an annual international conference and regional seminars, textbooks, assessment administration standards and award programs. The organization is largely volunteer based with supporting professional staff that take direction from committees composed of volunteers in areas such as education, professional designations, strategic and operational planning, member services and so on.
Overall policy is established by an executive board and there are regular election cycles that result in changes of leadership to ensure new ideas are brought forward. Each year a new president appoints new volunteers to the various committees to ensure the infusion of new ideas while at the same time retaining members that ensure continuity in programs.
Similarly there is only a few members of the executive board that change every few years to also ensure continuity in programs. For example, to be the president involves a four-year commitment where one is elected as Vice President and then moves to President elect, then to president and then a year as Immediate Past President.
The organization is governed by a constitution, bylaws and a procedural manual to guide the direction of committees and the activities and processes they undertake.
3. In the case of Canada, what are the country economy and the trend in 2024?
Canada’s economy is now largely driven by federal government policy and the whole scenario changed dramatically in 2020 with the declaration of a pandemic. The federal government had a balanced budget in 2015 with a projected surplus of approximately $1 billion and an annual budget totaling about $350 billion. With the election of Justin Trudeau in 2015 that all changed and he ran deficits that were at least three times his promise of about $10 billion.
Also there is very little true transparency in the Trudeau government fiscal policies. One glaring example is the contracts with pharmaceutical companies like Pfizer that were made without any public tendering or bidding process and were negotiated in secret and remain secret today except for a committee of Members of Parliament that were sworn to secrecy to review them.
Today the federal debt has grown from about $500 billion in 2015 and now stands at about $1.3 trillion. The money supply has been increased by 260% and it has impacted the cost of everything from a loaf of bread to clothing to energy.
Our inflation rate has been about 7-8% over the last two years and many basics such as food and fuel have increase by over 50%.
When you double or triple the supply of money you will dramatically (sometimes double) the cost of everything else except for wages and salaries. I may be corrected on that but it has actually happened in my home city of Penticton British Columbia.
4. What do you perceive the property markets or housing markets in particular in Canada in 2024?
My family’s first house purchase at $81,500 in 1981 was at a multiple of 3 times our household income.
We purchased a home in Penticton for $415,000 in 2014, which is a year before Justin Trudeau was elected. It is an average home and is not an estate or any of the other outliers in terms of property value. Today, our home is valued at about $900,000 which is an increase of 216%. In 2016 the median household income was about $50,000 and by 2021 it had risen to only about $65,000 which is only an increase of 30% compared to housing prices that have been risen over seven times that much in Penticton, BC.
That means that a house costing $415 was purchased at a multiple of 8 times a household income. Today, a $900,000 house with a median income of $65,000 is 14 times as much …
Similarly, property taxes have risen at about 7% per annum over the last few years and so have utility and other costs. Our local council just increases electrical rates by just under 9% …
Similar trends are happening in the industrial, commercial and institutional property classes too and it is unsustainable.
5. I heard that right now in Canada, your government did not allow foreigners to buy houses in Canada. What are the rules?
The rules vary by province but foreign ownership has been an issue. A few years ago it was a major issue and the province of BC looked at it closely and in cities like Vancouver special taxes were being levied. Many citizens believe that foreign ownership needs to stop and that there needs to be stronger policies in place but they change frequently.
The best thing to do is to do your own homework and look into and read carefully any agreement for sale or purchase.
6. In sum, what are the negative impact of foreign buying of properties in Canada?
One of the most glaring negative impacts are that prices can be driven up by wealthy foreign investors without even understanding the local market. Another impact is that the supply of land available to citizens and residents is decreased which means that prices will increase.
7. in general what is your idea about the impact of politics and on country's economy.
There’s just so much to cover in a question like that it is difficult to know where to begin and end … but I will try to break it down into climate, technology and propaganda. I have already discussed some of the basic economic issues earlier.
The political environment has been devastating with the introduction of what I believe are nothing but virtue signaling climate change/environmental policies, socialism and indoctrination that have no scientific basis at all. A great example of that is what is referred to as the Impact Assessment Act adopted by Justin Trudeau when he took office and has been justifiably called the “no pipelines act” by opponents to that public policy. In the week ending October 14 that bill was deemed unconstitutional by the Supreme Court of Canada. That means that provinces like Alberta and BC can begin to grow economically again.
In the area of climate change a gentleman by the name of Patrick Moore is a Canadian and one of the founders of Greenpeace … an environmental activist organization.
He has made numerous videos that are now banned/censored on various media and paid ‘fact checkers’ that do not really do any serious fact checking try to discredit him. The ‘google’ algorithms are working hard to be sure that people do not get reliable information and I have personally gotten away from using search engines like Google as much as possible. I was using DUCKDUCKGO but it too has been purchased by large technocratic companies and now use mostly BRAVE for searches …
A Canadian media company called Rebel News tried to put together a seminar for him in a smaller city in Saskatchewan in and around 2019/2020 and there were so many ‘climate change’ hysterical people calling the theatre where he was to speak that the venue decided to cancel their contract.
Mr. Moore also says that climate change is not happening. My take on it is that it is nothing but a tax grab by a global cabal that are trying to take over countries. They are also trying to destroy the sovereignty of countries too with International Health Regulations that give power to the World Health Organization.
Each day more people know that our prime minister and many members of the federal liberal party are graduates of Klaus Schwab’s World Economic Forum’s Young Global Leaders Program and they are doing everything they can to subvert our local Constitution and Charter of Rights and Freedoms.
Similar things are happening in the United States too under the direction of Joe Biden.
8. In particular, do you have any example on the impact of politics and property value in particular.
As mentioned earlier federal government debt is an example of how property values and the price of all other commodities can be driven up. What occurs to me is that even with inflation there is very little return on investment for the typical person if their incomes do not keep up with the increasing costs.
This is most noticeable with people that have retired where their incomes are held to the rate of inflation or most times a fraction of the rate of inflation. Even those that might invest in commodities like gold and silver and other precious metals might have an advantage but it still does not keep up.
A more recent example is my two sons who like many others have purchased properties and their incomes have not kept up with the rising prices of real estate. The same has happened with many friends as well.
Having said that, property ownership remains one of the greatest hedges against inflation and one of my favorite sayings when it comes to real estate is ‘always buy-never sell’ like precious metals and even what are now referred to as non-renewable resources; real, tangible property are better choices.
9. In local politics in Canada, how can an assessor be elected?
Assessors in Canada are not elected like they are in many jurisdictions in the United States. I personally believe that assessors should be elected every bit as much as judges and sheriffs and local attorney generals too. I am aware that in the US that there has been a trend to remove locally elected officials like assessors and have them appointed by other elected officials which I believe is a mistake because it removes accountability to the public they are to serve.
One of the primary purposes of electing officials from the electorate at large is so that they can be held accountable for their actions. If they are appointed by someone else that is elected then it can create a situation where no one is truly held accountable and it has happened with the declaration of a pandemic in British Columbia by our appointed Provincial Health Officer.
In March 2020 Bonnie Henry basically declared a health emergency and there was and still is legislation in place that required her to be independent of government. But she stood in front of cameras for about two years along with the elected Minister of Health that appointed her and basically said everything he wanted her to say. The same thing happened in the Province of Alberta too.
But there was recently a court case in Alberta called the Ingram decision where it was discovered that the provincial health officer there was not making decisions independent of the politicians. The judge ruled that was wrong and now all the charges that were made during the pandemic have been withdrawn and new lawsuits are being filed to claim damages.
One of the cases is a class action suit and so far several thousand people have joined it. In one case alone by a lady by the name of Kary Sakamoto that experienced severe facial paralysis and other matters has filed a suit for $10.5 million.
10. In summary, please give us an example of ample political environment which would be beneficial for people and the economy.
Our democracy is based on elected officials representing the views of the citizens they want to serve. But the problem here has been that once elected our elected officials serve the party they belong to and that is called a partocracy. It is where an elected official becomes more loyal to a party and ignores the citizens that voted for them.
One of the best things that ever happened in Canada was the Freedom Convoy that landed in Ottawa at the end of January 2022 and inspired other nations throughout the world to do similar convoys such as the Dutch Farmer’s protest and more. It truly woke people up to the biased media, the lack of truth from our government and more. There was a three month commission held that was called the Public Order Emergency Commission but it has been proven that the judge there was biased and actually an old friend of the current prime minister. He issued a report but many people have ignored it.
What is being more successful though is an inquiry that was recently called the “National Citizens Inquiry” and while it is not perfect it has done some amazing work. It is totally citizen funded and citizen led and independent of the government and the concept can work in any country.
The NCI held three-day hearings in eight Canadian cities and received testimony from people that have been vaccine injured and suffered other harms due to lockdown measures. Three hundred hours of testimony has been given under oath and includes evidence from almost 300 people and 94 experts.
Government representatives were invited from every province but all of them did not attend because they, in my opinion, are scared of the truth. They know that they have done significant economic, social, political and cultural damage to our country.
I would encourage everyone to watch the hearings and hear from the witnesses.
I would also encourage everyone to pay attention to what the United Nations and other non-governmental organizations like the World Economic Forum, the World Health Organization, UNESCO and similar organizations are doing. They are not working in the best interests of the people at large are trying to subvert democracy and shatter the constitutions of countries around the world.
One of my heroes is a Thai gentleman by the name of Sucharit Bhakdi. You can watch a video of him with a lawyer from Germany who is also licensed to practice in the United States at: