Chinese, American, European Buyers Purchasing Multimillion Dollar Properties
Wealthy Chinese buyers aren’t only jumping into high-end property markets in places like Hawaii, London or California, they’re also increasingly boosting the market in Vancouver. Long a popular destination for wealthy investors from Hong Kong, in recent years Vancouver has seen an influx of well-heeled mainland Chinese invest in property, start businesses, and send their children to local schools, making them ranking as some of the city’s biggest foreign spenders.
As the Vancouver Sun notes today, over the past year, a growing number of mainland Chinese, Americans and Europeans have crowded into – and propped up – Vancouver’s luxury property market even as some in the city expect a price correction to shake out the market.
From the Sun:
The market for luxury homes is now “insanely hot,” with mainland Chinese buyers -who are also impacting the Richmond market in a big way -the primary purchasers, said Dan Scarrow, Macdonald Realty vice-president of corporate strategy.
[Tsur Somerville, director at the centre for urban economics and real estate, Sauder School of Business at the University of B.C.,] said that China is a huge source of immigrants to B.C. and that mainland Chinese immigrants tend to be investors and entrepreneurs.
“Clearly, there’s a very targeted demand for higher-end properties that many associate with the mainland Chinese market.”
But he said there’s an absence of clear data on the specifics of those buyers, whether it’s primarily immigrants or investor money from China.
Quoting a recent immigrant from Hangzhou, Alice Zhang, the article goes on to note that many Chinese home buyers are enticed by the fact that property in Vancouver is actually cheaper than in China. Although the Chinese government has recently called for more affordable housing in major cities, prices for higher-end housing has skyrocketed in the last decade, despite excess capacity and the global financial crisis.
“We moved from the most beautiful city in China to Vancouver, which we consider more beautiful,” said Zhang, whose family owns hotels and a real estate development company in China.
“I think that compared to other Canadian cities, Vancouver is expensive. But, China is more expensive.”
Though many wealthy Chinese see Vancouver’s luxury property market as a great destination for their excess cash, not everyone is convinced that the influx of capital the city has seen in recent years is always a good thing. From the Globe and Mail:
The torrid affair between eastern Asia and Vancouver real estate, now in its third decade, is actually a love triangle from which each party derives very different things. When wealthy Chinese immigrants buy property in Vancouver—and they utterly dominate the top end of the market—they’re actually buying a form of insurance. What the federal and provincial governments get out of these newly minted Canadians turns out to be a modern form of the infamous head tax that was imposed on Chinese migrants in the 19th century. And what Vancouver gets is an economy that boasts a lot of froth, and not much substance.
From all three angles, it feels like a relationship that is built not so much on commitment as on enjoying the good times while they last.