As "global super-rich" buy sweet security of Vancouver homes, outrage over rising prices and accusations of racism
“We’re an immigrant nation. So to say that immigrants are somehow impacting the marketplace is beginning to sound suspiciously awkward to me,” Cameron Muir, chief economist with the BC Real Estate Association says. Others, like Hong Kong's Ian Young, of the South China Morning Post, beg to disagree.
Chinese real estate ad for Vancouver property
Cashing in on this, Vancouver realtors use global real estate websites like juwai.com to market high end properties to wealthy investors in Asia.
Take, for example, 1328 W.15th Avenue in Shaughnessy. It's for sale on juwai.com for almost $4 million. The 3,100 square foot view home boasts of an elevator to luxurious ensuites, a wine cellar, and underground parking.
Young says homes like these cater to wealthy Chinese who may use the property for their families or, simply as an investment.
“Certainly the real estate board and some of the more official figures don’t really want to address it. They don’t want to talk about it loudly. However, privately they tell me that this is a very important sector of the high end market for detached homes. If you go to the open houses on the west side (of Vancouver), you see a lot of mainland Chinese buyers and they are being catered to, which is all well and proper for the real estate agents.”
There is little data to prove who is buying what in Vancouver and where they are from. In the US, the National Association of Realtors publishes an annual profile of residential real estate sales to foreigners. The 2013 survey of 3,300 US realtors reveals that foreign buyers spent $68.2 billion on residential properties in 2013. That adds up to 6.3 per cent of the total US home sales market of $1.08 trillion for 2013. The report also breaks down the top five buyers by country (Canada is number one, followed by China), types of properties and financing. The NAR publishes the report online, but similar data is simply not available in Canada.
“In terms of a planning tool and data as a whole, I think it would be beneficial to have this type of information available publicly,” says Brian Yu, an economist with Central 1 Credit Union in Vancouver. “Obviously on the real estate side, more data is better. There is a lack of data in terms of buyer profiles and the degree of how much off-shore purchases there are. It would definitely provide some clarity in the market.”
Cameron Muir, Chief Economist, BC Real Estate Association
“We would love to have additional data,” says Cameron Muir, chief economist with the BC Real Estate Association. “We would love to know exactly how many and from where. That would be very good information, particularly when we hear a lot of talk around making policy today around international investors in housing in Vancouver. It’s hard to make policy if you don’t have really good data to base your policy off of. But unfortunately we really don’t have very good data.”
Muir says evidence from BC realtors is that only a small number of sales are going to individuals from overseas. However, if these buyers are only looking at one particular neighbourhood then it’s natural that house prices in that area will rise.
“Certain areas of Vancouver have benefited from foreign investment in real estate,” says Muir. “Particularly when we look at Vancouver being a global gateway city, an international safe haven, a hedge city but saying that is driving up real estate so nobody can afford it is stretching the truth a little bit.”
“We’re an immigrant nation. So to say that immigrants are somehow impacting the marketplace is beginning to sound suspiciously awkward to me.”
The National Association of Realtors in the US says it collects and distributes data on foreign home buyers to help realtors better understand the marketplace and better serve domestic and foreign clients. A spokesperson with the association says providing as much information as possible about the niche foreign market is a vital part of the real estate industry.
Something the Canadian government and the Canadian Real Estate Association have yet to do.
And until that data is made available, Cameron Muir of the BC Real Estate Association says there is no need to develop any new policies that would thwart foreign investment in Vancouver.
“I see it as an important market segment in Vancouver, as it is in any kind of global gateway city, but I don’t see enough evidence to date to warrant any kind of significant policy direction, and I think that the vast majority of Vancouver is unaffected by it.”