In Vancouver, real estate is the economy. So for many, news that Chinese investors are once again arriving in droves to buy up property is being cheered.
Real-estate agents haven’t seen anything like it since the mid-1990s, when fears surrounding the Hong Kong handover fuelled the first rush into the local market by Chinese investors. This second charge could be as substantial as the first, which drove up property values by hundreds of thousands of dollars.
Back then, suburban Richmond was the destination of choice. And while it remains the preferred location, investors from mainland China are buying up property throughout Greater Vancouver. Toronto too.
Cam Good, a Vancouver real estate marketer, created a buzz a few weeks ago when he invited the media along on a helicopter tour of Greater Vancouver he was giving a group of interested Chinese buyers. The fact they were willing to look outside of Richmond was considered news.
Not everyone who read about the tour or watched stories about it on television was thrilled. Within days, Mr. Good began receiving angry e-mails from Vancouver-area residents worried that this latest push from China will make prices in the area even more obscene.
“I got a lot of, you know, how are my children ever going to be able to afford a home?” Mr. Good said the other day. “There was an undercurrent of racism in a lot of them. That we should put up a barricade. We have enough Chinese, that sort of thing.”
One e-mail qualified as hate mail. It also contained the hope that someone blow up Mr. Good’s offices. He was so concerned he turned it over to the Vancouver Police Department, which is investigating.
That there would be some of this type of sentiment is perhaps not surprising. But Mr. Good says people are hypocrites. Many live off the avails of the wealth real estate generates in Greater Vancouver. And yet some of those same people are the ones “complaining about the Chinese buying up the place.”
They may be grumbling for a while.
Mr. Good said there are several reasons for what is occurring.
There are more wealthy people in China than ever before. Concerns about inflation and a real-estate bubble prompted the Chinese government to limit the number of condominiums people can own to two. So the wealthiest Chinese are looking elsewhere to invest their money.
That it’s hard to get money out of the Communist country appears to be a myth.
“Real-estate values in China have doubled over the last two or three years,’ said Mr. Good, whose company The Key has opened an office in Beijing and has plans to open another in Guangzhou next month. “So real estate in Vancouver and Toronto doesn’t seem too expensive to them any more.
“We’re also seeing a lot of Chinese looking for a parachute plan. These are people afraid of a regime change in China and what that might mean for their wealth base. Canada is seen as a safe place to put their money.”
The Chinese love the political and economic stability Canada offers. We have a good education system too, which is why so many mainland Chinese send their children here to go to school. It is common for a mother and her children to come to over, while the husband remains in China to earn a living.
Mr. Good’s company has sold more than 500 condos in Vancouver and Toronto in the last two months to Chinese investors. The latest rush into Richmond has moved a growing number of homes over the $1-million mark. A 34-storey condo tower in suburban Burnaby sold out immediately, with the majority of purchasers reportedly being Chinese. The $98-million in sales set a single-day record for the municipality.
Thanks largely to the latest great push from China, the average price of a home in Greater Vancouver rose 12 per cent in 2010 and is expected to rise another three per cent this year, according to Canada Mortgage and Housing Corp.
“We’re just on the cusp of this,” Mr. Good said. “The massive middle class in China is just now getting to the point where they can afford the international option.
“People here better get used to it.”