Frank O’Brien & Peter Mitham
Other
With a surprising 44 per cent drop in immigration to B.C. during the first quarter of this year, the Asian factor is becoming a hotter topic since many developers are aiming product precisely at this sector. Asia has a fascination for Vancouver. Decades of migration and the influx of Hong Kong buyers during the 1980s keep the city looking west across the Pacific. The latest wave is driven by Canada’s designation by China as an approved destination for travellers and Beijing’s imposition of restrictions on domestic investment following China’s unrivalled economic boom. “There are certainly more Chinese buyers today than there were two years ago,” said Daryl Simpson, vice-president, sales and marketing, with Bosa Properties Inc. “They’re looking for a change of place, or a second or third residence around the world where they feel comfortable, safe and secure.” The influx is taking Chinese buyers well beyond the neighbourhoods they’ve traditionally scouted for properties, contributing to a perception that buyers from Mainland China are dominating the market. Bulk-buy myth “They are looking further afield than they traditionally looked. They’re looking beyond Richmond, the West Side and Metrotown,” Simpson said. “You’re seeing that in North Vancouver, you’re seeing it in Coquitlam, you’re seeing it in White Rock.” Viceroy, a 170-unit project Bosa launched in New Westminster this past May, had sold 82 homes by the end of July. Of these, about half sold to Chinese buyers. “Chinese buyers in uptown New Westminster? That’s unheard of,” Simpson said with amazement. He cautioned against painting them all with the same brush, however. “Chinese buyers don’t all have this homogenous motivation. They’re just like you and me,” Simpson said. “When people hear ‘Chinese investors’ they think all Chinese investors are buying with the same motivation. That they’re all buying it to either flip it, or they’re all buying it to rent it out or they’re all buying it to sit empty for three years until they move here, or they’re buying it for a child that’s going to go to UBC. [But] they’re buying it for all those reasons and others.” The perspective is backed up by some common measures of investor activity in Vancouver. Statistics from BC Hydro regarding power consumption below the minimum threshold established for occupied apartments have typically pegged vacant downtown condos at about 8 per cent of the total stock. This year, BC Hydro numbers pegged the proportion of vacant units city-wide at 2.4 per cent of low-rise units and 3.9 per cent of highrise apartments. Of course, many foreign-owned apartments might be rented out, so a lack of power consumption isn’t the best measure of foreign ownership. But even then, speaking to the Urban Development Institute in May 2011, condo marketer Bob Rennie observed that for the Lower Mainland as a whole, 2,500 condos are foreign-owned (or approximately 1.2 per cent) based on where assessment notices are sent. And foreign buyers of single-family homes are equally few, at just 607 (or 0.15 per cent of the regional total). Another measure comes from MAC Marketing Solutions, which issued a report in June noting that of 500 buyers surveyed in the first five months of this year, just three listed an address in China as their primary residence. Follow the money But Jeff Hancock of MPC Intelligence said that even if this is the case, Chinese money is what’s driving sales and developers know it. “You start asking [developers] where their deposit cheques are coming from, and you start seeing a huge proportion of their deposit cheques are coming straight from China,” Hancock said. He says no one measure will effectively track buyer origins, but it’s clear that offshore buyers are an important component of the Vancouver – and British Columbia – market. “Make no mistake,” Hancock said of offshore buyers, “they are driving the new-home market.” Simpson agrees: “Developers now are looking at immigration statistics as often as we’re looking at mortgage rates,” he said. “For a developer in Vancouver not to be in tune with what’s happening with Asian immigration is foolish.” © 2011 REW