Vision Capital CEO Jeffrey Olin describes the real estate market in Canada and how to find investment value
The decision last month by the government of British Colombia to increase property tax for foreign investors has proven divisive. While some welcome the move as a necessary step to temper one of the world’s hottest markets, others believe the tax hike will do little to limit international speculators.
Jeffrey Olin, president and CEO of Vision Capital Corporation, places himself firmly in the latter camp, as he explains to Wealth Professional.
“I think it is the wrong decision and will have a marginal if not negligible impact,” he says. “It is basic economics. You have excess demand, but rather than constraining demand with initiatives that are not going to work, the more appropriate thing to do is increase supply.”
Vision Capital specializes in real estate investment through its Vision Opportunity Funds. The funds have emphasis on corporations and REITs in the North American market that offer value on the equity markets. The firm’s CEO describes how the business has been able to thrive.
“Our mantra is to buy real estate cheaper on the stock market than it is on the property market,” says Olin. “If you look at the underlying value of real estate, collectively we can find property that is trading at a discount to what it is worth. You can’t do that in the property market. We focus on those entities that are best on REIT management, corporate governance, transparency and liquidity.”
As it stands, Vision does the majority of its business in the US rather than Canada. Olin details why south of the border provides much better opportunities for Vision and consequently, the investors it does business with.
“The US fundamentals are much better,” he says. ”The office market in Canada is terrible – every market is overbuilt. I think the key factor for real estate growth is jobs. In the US it’s strong and in Canada it’s tepid and as a result we have 70 per cent of our net exposure in the United States.”
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