Building a Bridge across the Pacific
I recently attended the Asian Real Estate Association of America’s (AREAA) annual Summer Summit, which was, for the first time, held outside of the United States. Where was it held? Right here in Vancouver, of course. The mandate of the event was to “bring together REALTORS®, developers and government representatives from Asia, U.S. and Canada to promote and share real estate and business opportunities.” In essence, the AREAA is building the real estate bridge between North America and Asia and they see Vancouver as the North American Gateway City.
Back in April, I read an article in the South China Morning Post titled “How mainland Chinese immigrants are transforming Vancouver
”. This article referenced a report out of UBC that projects this migration pattern would fuel the creation of a “social geography entirely new to Canada.” As REALTORS®, we hear anecdotal evidence of this trend every day, but here are some numbers to consider from the report:
According to the most recent complete census data, Mainlander numbers in Vancouver increased by 88% to reach 137,245 between 1996 and 2006.
The number of ethnic Chinese in Vancouver is set to double to 800,000 by 2031, representing about a quarter of the projected total population.
On June 25th, Reuters also reported on this trend
, when it highlighted the fact that “Cash rich mainland Chinese, who some in Hong Kong blame for pushing property prices to record highs, have fled the city’s real estate market, scared off by cooling measures that have sent them scouring overseas for better options.”
I noted from the article that these cooling measures being implemented in Hong Kong include a 15% tax on foreign ownership, and many industry players believe this measure was targeted at Mainland Chinese buyers. It continued to state that, “If they want to invest in property, they now need to go overseas.” So where are the investment dollars going?
London and several major US Cities, like San Francisco, have always been strong choices for Chinese investors, but Vancouver has recently become one of the most popular options.
Overseas property fairs are being hosted in Hong Kong’s luxury hotels nearly every weekend and attracting many Chinese flying in from the mainland. For example, “Sun Hung Kai Properties Ltd, Hong Kong’s largest developer, sold almost 90 percent of units on offer … for its River Green project in [Vancouver] within a month of when it debuted.”
Vancouver is viewed by Chinese investors as economically stable, and a solid investment choice. Couple that with our incredible quality of life and you’ve got a recipe for investment. It’s often forgotten by locals that the Economic Intelligence Unit has ranked Vancouver the best city to live in on multiple occasions. Clean air and clean water in a safe city that is surrounded by astounding natural beauty, plus access to world-class schools and healthcare, have made Vancouver a natural choice for investors and immigrants.
Based on the above-mentioned numbers, and also from what I hear on a local basis, I don’t expect this trend to falter anytime soon.
In fact, at faithwilson | Christie’s International Real Estate we are currently testing innovative marketing channels to better showcase our Westside Vancouver listings directly to these Mainland Chinese Buyers.
So how will things continue to shape up for the rest of this year? As I said in our Q1 2013 Westside Analysis
, the residential market was slower than expected out of the gate this year and whether or not that was the key factor, we have experienced lots of sales activity in the second quarter. Take a look into our Q2 2013 Westside Analysis
for all of the statistical details. As we move into August we may have a minor slowdown, but I anticipate that we will have a relatively strong fall season, with a firm and balanced market overall (as always, with some outliers).
If you’d like to discuss your real estate goals, or get a better understanding of how we market our listings, don’t hesitate to give me a call or drop by our office. Enjoy the rest of your summer!
Written by: Faith Wilson