The economic impact of wealthy buyers from Mainland China has gone all but unnoticed by the average Vancouverite — but it’s no secret to the city’s real estate industry.
And unlike the buyers from Hong Kong in the 80s and Taiwan in the 90s, who had a huge impact on property values, this third wave from Mainland China is projected to be far bigger. This wave of buyer is newly rich and seeking luxury properties on the city’s West Side, in downtown condo properties, and to a lesser extent, in Richmond and Burnaby. Buyers from Mainland China are even buying up recreational properties in places like Kelowna.
“They’re injecting fuel into it, causing [luxury prices] to rise a little faster than they usually would,” says West Side realtor Ryan Dyer. “There are definitely some fast-paced sales going on. A lot of the really highly sought after properties have been snapped up pretty fast.”
Magnum Projects’ George Wong has benefited first-hand from the buying spree of the Mainland Chinese. “We’ve sold about $150 million in the last two months,” says real estate marketer Mr. Wong.
“In terms of purchasing power, they go for the big residential single detached homes — that’s all we’re hearing, especially in regard to high end product,” says Mr. Wong, who has had to learn Mandarin as a result.
“It’s very much a reflection of the new wealth. China is no longer a sleeping giant – it’s a giant.
“And it’s not just a Vancouver phenomenon, it’s all along the west coast.”
Condo marketer George Wong says he’s sold $150-million worth of property to buyers from mainland China in just the last two months. LAURA LEYSHON FOR THE GLOBE AND MAIL
Vancouver developer Robert Macdonald, owner of Macdonald Development, is making regular trips to China to entice buyers.
“Realtors on the West Side will tell you about 30 per cent of sales are from the Chinese market,” he says.
Marketer Bob Rennie says the majority of high-end shoppers these days are from China. Based on a survey done by his office, Mr. Rennie says more than 60 per cent of West Side sales over $1.7 million are by new Mainland Chinese purchasers. The pressure on the high end of the market could have an overall affect on affordability, says Mr. Rennie.
“We have to acknowledge that local incomes cannot compete with any foreign money,” says Mr. Rennie. “Housing supply is the one thing that cities and planners will have to watch closely to maintain any level of affordability.”
Vancouver is no stranger to international interest. Over the last two decades, there have been smaller real estate buying sprees by Americans, English, German, Iranian and Korean buyers. But the overseas Asian buyer has had the biggest impact on the Vancouver property market.
Of all the markets across Canada, realtors say the Chinese are most attracted to B.C. Visas Consulting Group is one of the largest immigration consulting firms in China, with offices in Jiangsu, Zhejiang, Guangdong and Shandong provinces. Visas’ Vincent Chen says more than 3,000 Chinese families migrate to Canada under the business category every year.
“At least 60 per cent of these families choose Vancouver to settle down — and a major part of them will buy property there, sooner or later,” says Mr. Chen, from his Shanghai office.
Macdonald Realty VP Dan Scarrow, who is half Chinese and knows Mandarin, has experienced the benefits of the new market. Last year, he sold 10 condos priced at more than $5 million apiece to people from China.
Today, he runs a program aimed at partnering with immigration consultants who are hired by foreign clients to help them settle in, which includes the purchase of real estate.
