According to a recent release by BNN "the average price of a single-family home in Vancouver (is) around $1.2-million"

 

 

One of the largest real estate companies in British Columbia says that more than one-third of all the single-family detached homes it sold last year went to people with ties to mainland China.

 

Macdonald Realty Ltd., which has over 1,000 agents and staff in B.C., said 33.5 per cent of the 531 single family homes sold by its Vancouver offices in 2013 went to people who the company said were a mix of recent immigrants and Canadian citizens.

 

Those buyers, the company added, tended to spend more money, too, with the average cost of a house sold to these clients topping $2-million, compared to $1.4-million on average overall.

 

The figures did not include Macdonald’s sales in suburban areas such as Richmond, Burnaby or North Vancouver.

 

“This is our snapshot of Vancouver,” says Dan Scarrow, vice-president of corporate strategy at Macdonald Realty.

 

The information is based on reports from the firm’s sales, anecdotes from its agents and Mr. Scarrow’s own experience working with mainland Chinese clients, and it’s a glimpse into the influence of mainland Chinese money on Vancouver’s real estate market, which is considered among the most expensive in North America.

 

Vancouver has been flooded in recent years by tens of thousands of investor-class immigrants from mainland China, who have seen the west coast city as a stable – and picturesque – place to park their capital in luxury property.

 

That has helped drive up the average price of a single-family home in Vancouver to around $1.2-million.

 

Mr. Scarrow, who noted the firm does not query buyers about immigration status, believes that investment flowing from mainland China into Vancouver real estate is a quantifiable phenomenon, but has not personally seen much of the more controversial type of buyer: Those from abroad who buy for investment purposes but never live in the city. “We still see very few pure investors from China who have no connection to Vancouver,” he says.

 

Getting a handle on foreign buyers is difficult and Macdonald’s survey is far from exact – though one major property developer in Richmond said “that sounds about right.” The federal government does not collect

 

meaningful data on the number of foreign buyers purchasing Canadian real estate, leaving industry participants to debate the impact of foreign capital on the local market. And that debate has gotten heated recently, with some developers accusing others of racism and criticizing those who want to slap curbs on foreign investment. The issue is complicated by the fact that some of Vancouver’s ethnically Chinese Canadian citizens with ties to Hong Kong view newer immigrants from mainland China with a degree of suspicion, assuming their wealth might have been accumulated in part by proximity to China’s Communist Party, rather than in a free market with the rule of law like Hong Kong.

 

The lack of hard data has also complicated discussions about the city’s affordability crisis and fuelled a local cottage industry where analysts attempt to decipher the scope of foreign money by looking at things like electricity usage in downtown neighbourhoods where some suspect foreign buyers have bought condos in which they never live.

 

“People always say there are no stats. Well, here are the stats,” says Mr. Scarrow. “This is actual evidence.”

 

There have been some reports and statistics about the scale of foreign money in Vancouver real estate before, but few have been conclusive – and none have settled the debate. One Sotheby’s report based on a survey of its agents found that 40 per cent of the luxury properties it sold in Vancouver were to foreign buyers – but not all of them were from China. Many developers trying to downplay fears about Chinese investment cite a statistic showing that only 1 to 3 per cent of Vancouver real estate purchases are “foreign” buyers – but, as is the case with Macdonald’s sales, many more expensive homes are still sold to people based here but who have come, at some point, from mainland China. A 2011 study by Landcor Data showed that 74 per cent of luxury purchases in Richmond and Vancouver’s expensive west side were by buyers with mainland Chinese names.

 

Mr. Scarrow says his company is “indicative of the overall market,” since his firm has some real estate agents who target overseas Chinese buyers, but is also firmly oriented toward domestic sales, unlike other real estate firms that deliberately target Chinese buyers.

 

At the same time, Mr. Scarrow and Macdonald are so bullish on the potential for Chinese investment that he is spearheading the company’s efforts to open an office in China. “While there is very little data about foreign investors in Vancouver real estate, our own internal data is enough for us to commit to investing in a representative office in Shanghai,” said Mr. Scarrow, whose mother Lynn Hsu, who came from Taiwan in 1979, is the majority owner and president of Macdonald.

 

Others remain unconvinced – not about whether there is an influx of Chinese money, but whether the flow of foreign capital will continue unabated.

 

Richard Kurland, a Vancouver immigration lawyer who works with wealthy Chinese immigrants, believes Vancouver may see a slowdown in foreign investment. He said some wealthy Chinese buyers might get anxious and sell off second properties because of the current crackdown on corruption in China.

 

In meetings with top real estate agents earlier this year, Mr. Kurland predicted that luxury residential real estate could drop in value by as much as 25 per cent as foreign investment dips. As evidence, he points to July real estate figures that showed 106 homes for sale on the west side in the $3-million to $3.5-million price bracket, and just nine sales, compared to 73 active listings and seven sales during July of 2013.

Because YOU Deserve the Best ...

 

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Real-estate sales are up, housing starts are up, and experts believe the era of $599,000 homes in Vancouver is probably over.

 

 

A flurry of publicity arose when a 600-square-foot renovated home at 2622 Clark Dr. was recently listed for $599,000 — Vancouver’s cheapest detached home — with a pending offer now in place.

 

Next in line in the affordability sweepstakes was a $628,000 listing at 3447 William St.

 

But you’re also too late for that 700-sq.-ft., two-bedroom, one-bathroom home on a 33-foot lot just off the Trans-Canada Highway — it sold for $609,000.

 

“I got a lot of calls on it,” saidRe/Max Select realtor Ron Basra. “A builder bought it. It’s a teardown. “He’s going to build a house with a legal suite, and a coach house. He can live there, and get income from renting the suite and the coach house.”

 

Basra said low carrying costs are attracting buyers at the lower end of Vancouver’s real-estate market.

 

“Interest rates are low, and no one knows how long that will last,” said Basra, a realtor for 17 years. “Anything under $1 million is selling right now.”

 

From those two properties there’s a significant jump to 823 McLean Dr., where a sizable 1,750-sq.-ft. home with two suites is listed at $668,000.

 

It’s not for everyone — just off busy Venables Street on an alley connecting nearby businesses — but it has easy access to downtown Vancouver.

 

Right now it’s a healthy market,” said Sumal Inde, vice-president of residential mortgages with RBC. “More houses have been sold this year, housings starts are up.”

 

Read the full article here.

 

Till next time ...

 

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Re-posted from an article in the GlobeandMail.com:

 

“Buying a Vancouver house is not even close to affordable for us,” said Mr. Kebede, 28, a graduate student who rents a two-bedroom suite with his brother for a total of $1,300 a month. Mr. Kebede, Ms. McDonald and Mr. Thomas are each renting modest places on the East side, where accommodation is more affordable than on the West side.

 

 

The three friends want to stay in Vancouver, but don’t want to buy condos. All three have university degrees, and while they might one day land jobs with decent salaries, they have already shifted their attention to some form of communal living or other shared accommodation while they wait for a chance to buy into Vancouver’s real estate market.

 

Their situation highlights an important shift in attitude that is being felt in Vancouver and to a lesser degree in other parts of Canada.

 

You can read the entire article here.

 

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