January 25, 2014
Just how much is Asian immigration affecting the local housing market? Are Mainland Chinese purchasers to blame for pushing housing values so high that many locals can’t afford to buy?
It’s an ongoing, often hotly debated topic in Metro Vancouver. And a conclusive answer seems even more elusive as Mainland China’s government progresses firmly along the path of change.
“It gets a lot of press. But I believe its impact is a bit overstated,” says Richard Bell, a Vancouver lawyer and principal of Bell Alliance, which offers a Global Immigration Services branch to help newcomers establish residency.
Like many industry watchers, he believes the idea is more urban myth than verifiable reality: “Yes, this demographic has an effect on the very high end of the housing market, but that segment is a very, very small part of the overall marketplace—one, maybe two per cent.”
However, he adds that within last six months, if a west side Vancouver property sold in the $2 to $2.5 million range, the odds are “strong” that the purchaser was Asian.
After virtually disappearing between April 2012 and fall of 2013, Asian buyers are once again making their presence known. We’ll see if the annual rush to purchase real estate during Chinese New Year resumes this year.
If it does, there’s a sense that it will happen at a more moderate pace. “I believe the unrealistic pricing created by Asian buyers has run its course,” Bell says. “They seem to have reached a point where they simply don’t believe there will be further significant increases in values within prices ranges they’re buying in.”
Gaining a North American education for their children now seems to be the most important motivation. That’s why Bell believes luxury condominiums might well surpass high-end single-family houses as the residence of choice.
“It’s a story that will unfold over the next couple of years, but when the focus is education, where do you want to be? Close to universities—and that market is now primarily high-end condos.”
Many of these educational immigrants are continuing a trend to flexible, new ways of dealing with financial realities. “I see lots of Asian families where mom’s here, the kids are here and going to school, but dad is still in Asia,” Bell says.
The reason is pure economics. “It’s tough for dad to make the same money in Vancouver that he would in Asia. It’s not a place you come to get rich, but is a place with an exceptional lifestyle and where young people can get a good education.”
And not just any education. This demographic wants the emphasis on English skills that will allow them to participate in a global environment where English is the language of business.
Bell is enthusiastic about possibilities for the future. “Stability from the new political regime in China may well be opening some tremendous opportunities for Vancouver,” he says. “We are the gateway, the connecting city between North America and China.”
In fact, he suggests Vancouver may well be underselling its potential. “We have a beautiful city, high education values, and we’re attracting attention globally. And none of that is going to change.”