Chinese-Canadians and immigrants, not investors from China, largely driving market, experts say

Aerial view of Simon Fraser University in Burn...Image via WikipediaBY BRIAN MORTON, VANCOUVER SUN

A growing belief that Metro Vancouver's hot housing market is being driven by Asian investment, primarily from mainland China, is a misconception, according to experts in the real estate field.
In fact, they say, evidence suggests buyers are mainly Canadian citizens, immigrants or new residents in Canada -many with strong links to mainland China and many residing and working in China while their families establish roots in B.C.
Most purchases are also being made as long-term holdings - in some cases for children attending local universities -with little of the quick "flipping" prevalent in previous hot markets.
"From what we've seen from most of the major launches, it's a different buying habit than previous runs on the market," Jennifer Podmore, real estate advisory leader for accounting giant Deloite, said in an interview Friday. "Generally, we're not seeing the investor as the main drivers of the market. There are certainly a lot more Asian purchasers, but not Asian investors coming to purchase a condo and then leaving.
"Most [buyers] have strong ties to Vancouver, meaning they're Canadians, immigrants or live here," added Podmore.
Daryl Simpson, Bosa Properties' vice-president of sales and marketing, agreed, citing their 202-unit Sovereign tower in Metrotown that recently sold out in one day, largely to ethnic Chinese buyers.
However, it's incorrect to identify the buyers as mainland Chinese, he said, because most came from other parts of Metro Vancouver. Some may have connections with mainland China, but no more than "half a dozen buyers" had addresses outside Canada.
In 2010 B.C. received about 47 per cent of Canada's investor-class immigrants, who must show a net worth of at least $1.6 million and are required to make an $800,000 investment in Canada, Podmore added.
While Chinese immigrants to B.C. represented about 19 per cent of the total immigration, Chinese and Taiwanese investor-class immigrants represented 79 per cent of the investor category.
Podmore's and Simpson's comments follow a surge in investment, largely by ethnic Asian buyers with links to mainland China, that's branching out from Richmond and Vancouver's west side as buyers look to other communities.
Several condominium towers in Burnaby, including Sovereign, sold out quickly in recent weeks, mainly to Asian buyers.
"If you see the type of demand that we've seen on the west side of Vancouver and Richmond spread elsewhere, it will push up prices, but it's unlikely to have the same dramatic effect on prices because there's much more of a supply of units elsewhere," Tsur Somerville, director of the centre for urban economics and real estate at Sauder School of Business at the University of B.C., said, adding that it's hard to conclude mainland Chinese buyers are behind the sales.
Robert Dominick, vice-president of sales and acquisitions for WestStone Properties, said Asian buyers are fuelling sales at his 393-unit Surrey City Centre highrise, Ultra.
"We opened the door for [our most recent] sales two weeks ago. We didn't advertise and simply through phone calls to Asian realtors in our first week we generated 23 sales."
Dominick said some buyers showed up on buying trips organized by Chinese-based tour operators, but that most aren't interested in "flipping."
He said many buyers involve China-based husbands with family in Metro Vancouver, while some want a condo for their children attending the nearby Simon Fraser University campus.
Polygon Homes president Neil Chrystal said it's difficult to say how many buyers are mainland Chinese investors, adding that "we see a lot of people speaking Mandarin, which is an indication." He noted that south Surrey, north Delta and West Vancouver are becoming more popular with Asian buyers.
Chrystal said that while their Chancellor highrise and two other Burnaby towers experienced lineups of predominantly Asian buyers, "a lot of the people were locals looking to downsize."
Meanwhile, a recent Landcor Data Corp. report said many of today's Chinese immigrants arrive "with fortunes intact, especially in the Lower Mainland, eagerly buying their own bits of the good life and helping buoy up real estate prices."
The report looked at luxury home sales in Richmond and Vancouver, matching new owners' Chinese surnames to see how many purchasers were Chinese, with 74 per cent fitting the criteria in 2010.
A recent China Daily report said Chinese home buyers have become the second-largest group of international buyers of U.S. homes -after Canadians.

Read more:


No comments:

Post a Comment

Subscribe to our newsletter

Recommended Books