Some have said that the influence of offshore buyers, notably from China, in Vancouver’s housing market has been overstated, except in a few locations like the west side. Others believe it is the reason for the unrealistically high valuations of property, with spillover into the market generally.
We may soon find out.
An increase in growth in China’s gross domestic product (GDP) would have a positive impact on the housing market in Vancouver, argues a Conference Board of Canada report released March 24.
The influence of China’s economic state on the city’s housing market should not be underestimated; the report argues that the Chinese economy is one of the biggest drivers behind housing sales activity in the area. It “rivals” not only the city’s population growth but also the employment environment and mortgage interest rates in terms of what determines the state of the market.
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ULI BC has a well-timed panel to explore the subject tomorrow:
ULI BC: Immigration Policy and the Real Estate Marketing – Changes Ahead
When: Tuesday, March 25, 2014
Time: 7:45am to 9:30am
Where: Terminal City Club
Join ULI BC and our panel when we look further into the announcement made by the Federal Government on February 11 regarding the immediate cancellation of the Investor Immigrant Program. An estimated 15,000 wealthy applicants and their family members (the vast majority of which were Chinese looking to relocate to Vancouver or Toronto) had their applications involuntarily cancelled.
Michael Ferreira – Urban Analytics
Jeffrey Lowe – Lowe and Company Immigration & Business Lawyers
Lily Korstanje – Magnum Projects Ltd.
Mark Lester – JLL
Registration is open to both members and non-members. To register, call 604.761.8060 before the end of today!
For registration fees and full details of this morning event, please visit our website here.
until somebody shows me data that proves it, i don’t believe chinese people have any greater impact on vancouver real estate than americans, germans, british people, russians or any other foreign group!
Any person moving here has an impact .. and we certainly have a lot of Chinese people in certain parts of MetroVancouver .. of course they have an influence. many know that Vancouver real estate, especially in good locations and/or with oceanview is not overpriced on a world scale, contrary to popular local belief.
really, are you confusing canadians of chinese heritage with chinese foreign nationals who are not canadian citizens? honest question! i doubt you personally are but a lot of other people seem to be! (and i am canadian of filipino heritage if that makes any difference!) I don’t really have any interest in this other than a desire for truth backed up by facts and data!
For starters, you might want to read Donald Gutstein’s (SFU professor’s) book New Landlords.
thanks susan smith! for starters i don’t think a 13 year old book is relevant, but i’ll try and get a copy and read it. perhaps there’s a 2nd edition? or a sequel coming up?
Gutstein’s book examines the wave of off-shore immigration post Expo-’86 in Vancouver and subsequent to the purchase of the Expo lands by billionaire businessman Li Ka Shing. I assure you the the wave of immigration post-Expo and pre-1997 was highly “relevant” to Vancouver’s escalating housing prices. It was the beginning of successive waves.
hi susan: we’ll have to agree to disagree. I still see no data that suggests that the Chinese migration from Hong Kong has caused Vancouver’s “escalating housing prices”. And I am not sure that in world without Chinese migration that Vancouver housing prices wouldn’t have gone up anyway because Vancouver was and is cheap to rich Filipinos, Russians, Germans, Americans, etc. Anyhow I’ve ordered a copy of the book to educate myself. Thanks for referring it to me.
Chinese immigration to Vancouver is not the sole reason for escalating housing prices; however, it has been one of the greatest contributing factors from 1990 onwards. Most notably, Hong Kong immigrants flocked to Vancouver on the heels of Li Ka Shing’s purchase of the Expo lands and his son’s, Victor Li’s, purchase of Air Canada. More recently, Chinese immigration from China to Canada has been fast-tracked. Wealthy Asian investors have heavily purchased, developed and populated Richmond, Point Grey, West Vancouver, and many other areas of the city in the past 25 years. Those of us who have lived here for the extent of that time are well aware of these facts; they are not under dispute and are well-supported by existing data, such as immigants’ countries of origin, real estate purchases in the city by off-shore owners, the changing demographics over the past two decades, etc. You may choose to disagree with the facts if you like, but it is illogical to do so until you have acquired them (ie. done your research).
I think Roland may be a bit naive to think there is no influence on prices by Chinese buyers. They have the money and they use it. He’s right in saying Vancouver’s prices (excluding the west side) seem relatively cheap compared to some other Pacific Rim cities, despite the hyperbole to the contrary.
A couple of other factors not mentioned on Chinese price influence is the “magical thinking” influence of feng shui and numerology. A recent report from the Vancouver School of Economics says in areas with higher Chinese populations (ie. Richmond), houses with an address ending in a 4 (death) sell at a 2.2% discount, and ending in an 8 (prosperity) sell at a 2.5% premium. With a benchmark price of $935,000, this can mean a swing of nearly $45,000 based on the numbers alone.
We can disagree there is an influence, but actual evidence is hard to ignore.
Yes, exactly. Roland seems to be a recent addition to the city, so he is a wee bit out of touch with his environment. No offense Roland.
“An increase in growth in China’s gross domestic product (GDP) would have a positive impact on the housing market in Vancouver, argues a Conference Board of Canada report released March 24.”
I guess we’ll never know, given that China’s GDP growth rate is unlikely to exceed it’s current levels at any point during our lifetimes (due to aging population, slowing population growth, decline in rate of migration to cities, need to start mitigating rather than creating pollution, need to deflate credit/property bubble, and maturation of economy after ‘catch-up’ phase).
I guess the more relevant question will be whether the inevitable *slow down* in Chinese growth has a *negative* impact on the housing market in Vancouver.
For starters, see the recent news stories on the ‘fire sale’ of Hong Kong properties by Chinese investors who are squeezed for cash at home due to the current China credit crunch.
Yes, if we see a boom and bust in Asia, there is no doubt that fewer houses will be purchased here by Asian buyers in the future. However, with Vancouver’s livability rate and reputation of attracting the wealthy from overseas, I do not believe Vancouver will suffer any or see a decline in house prices any time soon.
Declan – we certainly experienced a brief decline in prices for new condos here in the city
c. 1996 when the Hong Kong exodus from Vancouver was gaining steam. Concord Pacific junior (aka Henderson Developments) had to mark down the prices on the first phase of International Village a wopping amount when that happened. This allowed many local people like me to buy into this development, and a nearly empty building sold out almost overnight.
Before that time, all of Concord and Henderson’s projects were offered for sale “off-shore” first, angering many people who didn’t have access. To think that this process didn’t have an effect on prices is ostrich-like in its wishfulness.
Frank, at that time (1996), housing prices were over-inflated, so what you saw was a normal and minor adjustment. The continued escalation of housing prices in Vancouver confirms that fact.
The problem is with not having a suitable non-resident property tax for BC. Regardless of where the owner is from, the higher rate property tax should be applicable to those that do not actually reside here in BC but own property here. BC is a place for non-residents to drop their money into BC real estate the way speculators drop their money into the stock market. This un-controlled speculation wreaks havoc on locals that actually live and work here earning BC wages but competing with foreign-earned money that wasn’t earned under the same economic conditions. Roland sounds like the big tobacco lobbyists that make “there is no conclusive evidence” claims about the harmful effects of 2nd hand smoke while the politicians have been wide asleep.