More and more high-end condominiums are being sold to buyers from all over the world
John Mackie
Sun
These condominium developments, with views of Coal Harbour and Stanley Park, are often popular with international buyers who may only use them for several months each year. Buyers from the U.S., Europe and Asia are snapping up property all over the city. CREDIT: Stuart Davis, Vancouver Sun
Former Vancouver Mayor Art Phillips has a number of absentee neighbours, saying they often live in two places at once. CREDIT: Steve Bosch, Vancouver Sun
VANCOUVER – Vancouver isn’t just a Canadian city anymore; it’s an international one. For proof, look at some of the owners of condos in the sparkling new high-rise towers at Coal Harbour, which real estate brochures proclaim is “Vancouver‘s Gold Coast.”
At 1710 Bayshore Drive, at least eight Americans own condos, along with five people whose main residence is in Hong Kong. There are also owners from London, England, Heidelberg, Germany, and Dubai in the United Arab Emirates.
A couple of blocks away, the luxurious Bauhinia (535 Nicola) has owners from San Francisco, Denver and Santa Fe, New Mexico, as well as Hong Kong, China, Taiwan, Switzerland, Mexico, Germany, Austria, and Monte Carlo.
Down the street at The Carina, 1233 West Cordova, international owners from Hong Kong, Mexico City, Hiroshima and Reading, England, mix with Americans from San Francisco and Campbell in California, Orlando and Gainsville in Florida, Austin and The Woodlands in Texas, Denver, Tucson and Annapolis, Maryland.
The catch is, they don’t live here.
Like London, Paris or New York, Vancouver has become a place where the well-to-do like to have pieds-a-terre. These aren’t properties that are bought as an investment and rented out. They may well be good investments, but in many cases, they sit empty when their owners are away, which is most of the time.
If you walk around the new developments at Coal Harbour at night, you’ll find that in many buildings, several floors are dark. Sometimes, more than half a building is dark.
The same can be said for some waterfront buildings on the Concord-Pacific development, or on Beach Avenue. Check out the condo tower with the tree on the roof at 1919 Beach: most of the time, only three or four storeys are lit at night.
Developer Michael Geller thinks there are positive and negative aspects to the phenomenon.
“I would say overall it’s good for the city,” said Geller, who lives in one of the Bayshore towers.
“From a financial point of view, we have a lot of people who are paying a lot of taxes and yet they are placing very, very limited demands on services.
“The negative, though, is that if there’s too high a concentration of offshore residents, then you do lose the potential for vitality in a building or an area. In the case of Coal Harbour, we sometimes refer to them as ‘dark suites,’ suites that are literally dark at night.”
One of Geller’s neighbours is former Vancouver mayor Art Phillips. He acknowledges there are dark suites, but doesn’t think it’s a huge percentage.
“There’s a lot of people [in Coal Harbour towers] who live in two places throughout the year,” said Phillips.
“Then there are some to whom this is a very occasional place to come to. Most of them are regulars who come in the summer and go somewhere warmer in the winter. It’s just like many people in Vancouver have a place in Palm Springs or Phoenix. This is the reverse.
“I think it’s very flattering to Vancouver to have this kind of international attention, because these are all people who could go anywhere, and they’re choosing to come here. I don’t think there’s anything bad about it at all. It’s very flattering for us.”
The city’s co-director of planning, Larry Beasley, said Vancouver doesn’t have an official position on the large number of foreign property owners. But he thinks it’s part of the city’s growing internationalism.
“It’s not a trend that is causing me a great deal of worry,” he said.
“Usually that pied-a-terre also represents a linkage which may have a variety of business, social, family or personal connections into the city, that helps to connect the city to the rest of the world.
“A sophisticated, internationally connected city is always going to have a portion of the population who come and go, who are connected to a lot of places, and help to keep us connected. Not just officially, but from person to person, event to event, business arrangement to business arrangement, etc.”
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Foreign ownership in Vancouver is nothing new. The Lion’s Gate Bridge was built in 1937-38 by the Guinness brewing family in Britain, which wanted to develop its extensive land holdings in West Vancouver (i.e., British Properties).
In recent times, there was a huge controversy in 1988 when Asian developers offered False Creek condos for sale in Hong Kong before they went on the market in Vancouver and they sold out before any locals had a chance to bid.
There are still plenty of offshore owners who bought before 1997, when Hong Kong residents worried about the looming takeover of Hong Kong by China seemed to be buying property all over the city.
Retired promoter Hugh Pickett lives across the street from two houses owned by offshore interests that have been vacant for years.
“Nobody lives in them,” he said. “Gardeners come once a week and do the garden. One house now has two kids going to a private school. The other house has nobody at all.
“[The empty house] has got a swimming pool in the basement and a garage at the back of the property for seven cars. And nobody lives there. This has been going on now for six years.”
Trying to get a hard figure on just how many absentee foreign owners there are in Vancouver is tricky. Assessment rolls sometimes list foreign owners, but foreign owners also may keep local addresses, or own them through a company.
In any event, realtors say the offshore Asian market dropped off when China kept the status quo in Hong Kong after it assumed control in 1997. The foreign buyers now tend to be Americans and Europeans, who usually buy downtown.
Canada Mortgage and Housing Commission figures show that since 1992, 16,175 new condo units have been built in the downtown peninsula.
CMHC’s Cameron Muir said a CMHC study found that 47 per cent of downtown condos built in the 1990s were sold to investors, but many of those were local buyers purchasing one to three units.
Realtor Bob Rennie says Americans tend to go for the high-end suites in prime locations. This is borne out in property assessments: you tend to find more American owners in pricier suites, like a Seattle resident who has a $4,785,000 penthouse at 1777 Bayshore Drive.
“Down on the water, America wants front row seats,” Rennie said.
“On the waterfront, our towers are running very steady at about 25 per cent U.S. buyers. But now I’m seeing [Americans buy at] inner-city projects — if that’s the right term — at non-signature projects like Electric Avenue [at Burrard and Smithe] and the Hudson [at Granville and Dunsmuir]. We’re running at about 15 per cent U.S. buyers on these smaller suites.”
Rennie said trying to quantify European buyers is harder.
“It’s just so scattered,” he said. “I don’t have a number on it, but down on the water, I think it’s 10, 12 per cent.”
Rennie is currently selling Shaw Tower on the waterfront, which will be the tallest building in the city when it is completed. The 25 per cent U.S./10-12 percent European average is holding true.
“Out of 132 units, I have four left,” he said.
“They were from $400,000 to $5.4 million. I’ve got two suites under $2 million and two just over $2 million left.”
Rennie also sells a lot of condos in Seattle, which is probably more like Vancouver than any other city. But he said there isn’t a big pied-a-terre market in the Emerald City.
“I find that America moves around a lot more, and America moves around to stay closer to their grandchildren … ,” he said.
“But it’s not the same, it’s all end users. They’re not leaving them vacant, they’re moving there.”
Why is Vancouver attracting international buyers? Because it’s beautiful, it’s cosmopolitan, and it’s safe.
“Vancouver is moderate in climate, in prejudice, in crime,” Rennie said. “We don’t like the crime, but it’s moderate. That attracts people.”
Geller recently sold an apartment in the Bayshore development to a couple from Florida, who use it six months a year.
“They come up here because they like the climate, especially in the summer,” he said.
“They like the urbanity, they like the clean air, they like the absence of crime, they love the proximity to the outdoors.
“I think there’s also a certain novelty in being in a different country, just as we enjoy going to the United States.”
Realtor Evelyn Froese also says Vancouver is something of a bargain, by international standards.
“If you’re looking at international people, if they’re comparing to international prices of major cities, Vancouver is still very favourably priced,” said Froese, who has been selling suites at the Bayshore project in Coal Harbour for several years.
“For what Vancouver offers in terms of physical attributes, culture, etc., it offers a wonderful lifestyle and pricing.”
International buyers also like Vancouver‘s proximity to Whistler, one of the world’s biggest ski resorts. In a sense, downtown Vancouver is also a resort city for international buyers and tourists.
“Are we a resort? I don’t think so, but almost,” said Rennie. “I think it’s good, because it keeps us sustainable, it gives us jobs. We are a tourist city.”
“I think we are perceived as a resort city, in terms of what we’re offering,” said Froese.
Beasley rejects the resort concept.
“I’ve heard that characterization before, and I’m not buying it,” he said. “The reason I’m not buying it primarily as a resort is because of what I know as the linkages that are occurring in this city on a business and personal basis, to Asia, to Europe, etc.
“There are some cities, particularly highly multi-cultural cities or international metropolises, that attract a component of people that are in residence some of the time, because they’re doing stuff. It’s not just coming here to relax or take advantage of the amenities of the city. It’s not just a resort activity.”
With the Olympics coming, international interest is probably only going to increase.
“The Olympics put a spotlight on our city,” said Rennie, who thinks foreign ownership will “definitely” increase in some areas.
“We saw what Expo did for [Vancouver]. I think you’re going to see that all over again. Given the state of the world, I think it’s going to be magnified.”
Beasley agrees.
“There probably will be more of it,” he said. The upside is that “it helps to keep the delivery of our new residential communities quite buoyant. The downside, of course, is that it is probably putting some pressure on costs, on price. And that could be a detriment to local buyers.”
Geller does house exchanges with people from other parts of the world on his holidays.
“We have found is that there is a great deal of interest from people all over the world wanting to do a house exchange in Vancouver,” he relates.
“We sometimes underestimate how well known our city is becoming internationally. Although we like to be boastful and we know we’re living in a special place, it is still surprising when you find how many people also agree we’re one of the most attractive cities in the world. You usually have to leave Vancouver to appreciate how highly people think of us.”
© The Vancouver Sun 2004