Mainland Chinese buyers driving up luxury home prices

[SpongeG]

Mainland Chinese buyers driving up luxury home prices

By John Bermingham, The Province


This is the most expensive home on market for sale in Vancouver, B.C. on April 26, 2010. It is at 3489 Osler and priced at $22 million dollars.
Photograph by: Ian Smith , PNG

Staff Reporter

Luxury living is getting more expensive as the high-end hot housing market surges.

Metro Vancouver now holds the title for the most expensive home sold through MLS listings in the first quarter in Canada — a $10.06-million, 11,600-square-foot home on three-quarters of an acre on Vancouver’s westside.

A $22-million mansion on Osler Street in Shaughnessy is Vancouver’s most expensive listing.

The top price for a condo topped out at a whopping $5.69 million.

In fact, Vancouver tops the entry-level luxury market for high-end homes at $2 million.

Toronto and Montreal Island come in second, at $1.5 million.

The Lower Mainland’s hot market for luxury homes is mainly being driven by buyers from Mainland China, realtors say.

They’re snapping up $2-million-plus homes on Vancouver’s tony westside, and in West Vancouver’s upper levels, starting at $3 million.

It’s helped fuel a record first quarter of luxury home sales, with 227 luxury homes sold in Metro Vancouver, an 184-per-cent spike over the same period last year.

“Recovery in the upper end has been nothing short of remarkable,” said Elton Ash, regional executive vice-president of Re/Max of Western Canada, on Monday.

Ash said the majority are “move-up” buyers, trading up into bigger homes, after selling for between $900,000 and $1.4 million. “There was just this domino effect,” he said. “It’s pushing prices back up.”

A phone-around of Re/Max offices shows that Asian demand is a strong driver for high-priced homes:

■ Wayne Ryan of Re/Max Crest Realty says new Chinese immigrants and other offshore buyers are fuelling strong demand for $3-million-plus homes on Vancouver’s westside.

“It’s the Mainland Chinese that are definitely driving this market,” said Ryan. “I don’t see anything out there that is going to stop it.”

Point Grey, Shaughnessy, South Granville, Kerrisdale and Dunbar are the preferred neighbourhoods.

■ In West Vancouver, Mainland Chinese buyers are snapping up new and view homes over $2 million, said Keith Finney of Re/Max Masters Realty.

■ In White Rock/South Surrey, Re/Max Colonial Pacific realtor Linda Pierce said demand for luxury homes, priced at a minimum

$1.3 million, is being driven by people selling in Vancouver and Richmond, and buying into luxury homes that cost $2 million to $4 million less than Vancouver’s westside. “It’s people with families. It’s people who want good schools,” said Pierce.

Tsur Somerville, real-estate economist at the University of B.C.’s Sauder School of Business, said rich foreigners are not driving up the rest of the market.

...

http://www.theprovince.com/business/Main...ng+luxury+home+prices/2954286/story.html

[whatnext]

"Tsur Somerville, real-estate economist at the University of B.C.’s Sauder School of Business, said rich foreigners are not driving up the rest of the market."

Rrrriight. Not a very sound grasp of a ripple effect in regional housing markets.

Glad to see the mainstream media finally covering the housing market story which dare not speak its name.

[trofirhen]

Originally Posted by whatnext

"Tsur Somerville, real-estate economist at the University of B.C.’s Sauder School of Business, said rich foreigners are not driving up the rest of the market."

Rrrriight. Not a very sound grasp of a ripple effect in regional housing markets.

Glad to see the mainstream media finally covering the housing market story which dare not speak its name.

Here's a point I agree with you on 100%. I don't know whether to laugh or get angry.

[jlousa]

Yes let's not let statistics ruin a good conspiracy theory. We all know if you keep repeating a story it becomes true. I mean there couldn't be another reason a bunch of bears can't afford to buy a luxury home on the westside.

[trofirhen]

Excuse me, but I think this scenario breaks with the usual (and also engrained) "we're Canadians; we're tolerant; we accept everything without a whimper; never mind that we'll never be able to afford a place of our own due to the overbloated real-estate prices; we have to FAIR, and accept everybody and everything......"

I pride myself on being a Canadian, and this IS a land of immigrants, but this skewed, artificially maintained real-estate scene has gone far enough.

Peoples "tolerance" is beginning to wear thin. And I think I speak for many.

Excuse me for sounding acerbic, but everyone has their load limit.

[jlousa]

If you believe that real estate prices are too high, then blame your fellow Canadians who have bid up prices, and not the mythical foreign millionaire.
Regina's home prices have climbed over 100% in the last boomas well, guess they are being overrun by rich foreigners too.

[deasine]

This is hilarious. The Province and the sun is back again, pointing the fingers on foreigners on driving up price of homes and stealing jobs away! They did it in the 1990s, I guess it makes sense of them to do it again.

[nova9]

I could care less. Let them scapegoat - just another iteration of the same moral mistake mankind makes again and again.

They can keep complaining and fingerpointing, the Chinese are busy making money to buy up your family home. Oooohh, the great yellow peril. Puhlease, this isn't 1940.

[Pinion]

Originally Posted by jlousa

If you believe that real estate prices are too high, then blame your fellow Canadians who have bid up prices, and not the mythical foreign millionaire.
Regina's home prices have climbed over 100% in the last boomas well, guess they are being overrun by rich foreigners too.

How do so many Vancouverites afford $2 million homes then? (serious question) It doesn't seem like that many people could make millions in this town.

Also, I own a 40 year old one bedroom condo worth $300,000, which is ridiculous, but I can't see how that affects the luxury market.

[jlousa]

The vast majority of units that are sold are under $700K, as to who is buying the $2Million dollar houses, there are always people trading up with substantial built up equity. Heck I could swing it if I needed to and I certainly am not a rich foreigner nor even rich.

Heck with a 50% downpayment it'll leave a $1,000,000 mortgage at current rates on a 35yr mortgage is only ~$3800 month. There are people renting 2bds in coal harbour paying that much. There is a lot of people that make enough money to swing that comfortably.

I'm not justifying our current prices, just stating that it's not rich foreigners that are doing this, it's locals. Blame your neighbour instead.

[whatnext]

Originally Posted by jlousa

Yes let's not let statistics ruin a good conspiracy theory. We all know if you keep repeating a story it becomes true. I mean there couldn't be another reason a bunch of bears can't afford to buy a luxury home on the westside.

So your thesis is that the Re/Max agents interviewed by the Province for their article really don't have a clue who they're selling to?

It is as trofirhen mentioned, and Ujjal Dosanjh alluded to regarding the Vaisakhi parade, Canadians have become so cowed by political correctness that we dare not mention anything remotely controversial regarding ethnicity.

Is it racist to note that there have been huge inflows of capital into China, and that logically the Chinese are looking for safe places to park that capital? Australia has taken note and has re-implemented stricter controls on foreign purchases of real estate.
http://www.businessweek.com/news/2010-04...n-property-ownership-rules-update3-.html
But the issue would be the same whether the capital inflow is coming from Seattle, Stockholm or Shanghai: it distorts the local market.

The real question is why some people get so defensive and vehement that this can't possibly be one of the factors in Vancouver's overheated housing market.

[jlousa]

And just two weeks ago there was a report that Vancouver investors were responsible for the housing bubble in China, yes that's right measly Vancouver was responsibly for creating a housing bubble in all of China. Just goes to show you that fear mongering isn't a local phenomena. Guess it's easier to blame others then to assume responsibility.

[nova9]

Originally Posted by whatnext

The real question is why some people get so defensive and vehement that this can't possibly be one of the factors in Vancouver's overheated housing market.

The real question could also be why some people are so quick to believe/support a position that focuses on racial reasons?

[deasine]

Originally Posted by whatnext

The real question is why some people get so defensive and vehement that this can't possibly be one of the factors in Vancouver's overheated housing market.

No one's saying it's not one of the many factors involved. But this is not the root cause of the "problem" (quotes, since it's about luxury homes).

[Yume-sama]

Originally Posted by jlousa

Regina's home prices have climbed over 100% in the last boomas well, guess they are being overrun by rich foreigners too.

I blame rich Siberians! Regina would be like home to them!

[SpongeG]

ah well someone has to buy the stuff

[red-paladin]

I think the more rich immigrants we can get the better. They are spending money here and paying property tax. Let a bunch of rich people bid up the high end market, cause then the property tax goes up too.

[Distill3d]

What I would love to know is how does 4 walls and a roof with some indoor plumbing get to be such a large amount of money?

[whatnext]

Originally Posted by jlousa

And just two weeks ago there was a report that Vancouver investors were responsible for the housing bubble in China, yes that's right measly Vancouver was responsibly for creating a housing bubble in all of China. Just goes to show you that fear mongering isn't a local phenomena. Guess it's easier to blame others then to assume responsibility.

Cite?

Funny how virtually everything west of Cambie (Main) has become a "luxury home".

Show of hands how many are in favour of Australian style laws. After all they do not discriminate against any one group. Any foreign buyer is subject to the same scrutiny. Of course, we all know none of Canada's political parties have the gumption to enact them, just as they backed down over taxing offshore income.

[trofirhen]

Originally Posted by Distill3d

What I would love to know is how does 4 walls and a roof with some indoor plumbing get to be such a large amount of money?

It's the old law of supply and demand. Right now demand exceeds supply, so if you can't pay the price, find a cozy alleyway and sleep in it. After all, what's more important, money and proprty taxes, or the rights to basic human dignity and BASIC creature comforts (like a place to live)?

$$$$ !!!! taxes !!!! Luxury !!!! Prestige !!! This is Vancouver.
"THE BEST PLACE IN THE WORLD TO LIVE" (city slogan trumpeted repeatedly by a certain mayor who will remain nameless)