Archive for October, 2014

Real estate in the movies

Friday, October 31st, 2014

Dan St. Yves

Eventually, screenwriters find a way to work every subject into a movie. Go ahead, think about it – love, war, Spring Break, zombies…Heck, even warring zombies in love on Spring Break. There’s probably been a movie made about it!

Real estate or real estate agents don’t often find their way into the flickering pictures, but on occasion, they just might play some small part in a movie. Here are a few popular films that have featured either real estate or real estate agents:


The Money Pit, a 1986 comedy starring Tom Hanks and Shelley Long. Despite what you might think, this is not a documentary about how much Brad Pitt is worth. Like a few listings you may have tried to market over the years, or a home you may have owned, this disaster comedy exaggerates what can go wrong after purchasing a fixer-upper. Let’s just hope there was full disclosure and the buyers walked into this knowing what they were getting into. The fact that the seller’s name was Con Artist suggests perhaps not.

Neighbors, a 1981 movie with the dynamic former Saturday Night Live duo, John Belushi and Canadian Dan Akroyd. There’s that old saying that you can choose your friends, but you can’t choose your family. Sometimes, you take your chances when you buy a new home and inherit existing neighbours you might not gel with. Frankly, it’s just too bad that so many building codes in this day and age prohibit moats and 30-foot-tall perimeter stone walls.


House – Not the popular TV series about medicine and one particularly cantankerous doctor, this 1986 horror film starring William Katt features a gateway to another dimension. In a note of interest to builders, this is not a prudent feature to install in a bathroom medicine cabinet with respect to future resale values.

This movie does feature zombies, although I don’t recall if it was set during Spring Break. Or if they were in love.

If you’re a big fan of horror movies blended with supernatural happenings in homes, you may also want to check out Poltergeist (1982), a home built on ancient burial ground, with spirits awakened by TV signals, then wreaking ghostly hijacks worse than opening and seeing your monthly cable bill. There’s also The Amityville Horror (1979), starring James Brolin and Canadian Margot Kidder, who probably wished she had stayed hooked up with Superman as Lois Lane after buying this home where a mass murder was committed the year before.


The War of the Roses from 1989, starring Michael Douglas and Kathleen Turner as a high-powered couple who refuses to vacate their home during a divorce. Short of literally splitting the residence in two, this movie is a great example of the delicate nature of dealing with the parties during the sale of a property whilst divorcing. If your stomach is weak however, and you’d prefer something less stressful than dealing with two temper-flared, immovable objects, consider instead performing a root canal with a paperclip on a non-sedated saltwater crocodile.

Glengarry Glen Ross (1992) with Al Pacino, Jack Lemmon, Alec Baldwin and Kevin Spacey. If you’ve ever worked in timeshare sales, multi-level marketing or any other sort of boiler-room sales environment, you will cherish the reality of the characters in this terrific film. You wouldn’t want to be on the other side of the table, especially when they bring in “Jimmy The Closer” to clinch the sale, but you’ll still enjoy the characters.

These are just a few movies that have had a degree of success, while featuring facets of the business of real estate. What are your own favourites?

BC Housing Starts to Hold Steady in 2015: CMHC

Thursday, October 30th, 2014

New home supply, MLS resales and prices to edge only slightly higher over the next two years as market remains balanced, according to CMHC’s 2015 BC Housing Market Outlook

Joannah Connolly

BC housing starts are forecast to reach 28,300 homes next year and 29,000 homes in 2016, according to a report released October 30 by the Canada Mortgage and Housing Corporation (CMHC).

This compares with the CMHC’s September prediction of 27,500 housing starts in 2014.

The CMHC forecasts that MLS® re-sales in BC will total 79,200 units in 2015 and 79,300 units in 2016.

The province’s average home price is forecast to increase only slightly next year, rising to $566,300 in 2015 and $573,000 in 2016.

Carol Frketich, BC regional economist at CMHC, said, “Housing demand will be supported by employment and population growth, but tempered by gradually rising mortgage interest rates.

“Total housing starts will edge higher as resale market conditions remain balanced and the supply of completed and unabsorbed (unsold) new homes trends lower.”

Nationwide, the 2015, the average MLS resale prices is expected to be $410,600 in 2015 and  $417,300 in 2016.

© 2014 Real Estate Weekly

Coal Harbour land sale at 1250 West Hastings pushes record price

Thursday, October 23rd, 2014

The sale of an 8,250-square-foot (766 square metre) lot in Vancouver’s Coal Harbour for $13.1 million is considered a record price paid for a condominium …

Frank O’Brien

The sale of an 8,250-square-foot (766 square metre) lot in Vancouver’s Coal Harbour for $13.1 million is considered a record price paid for a condominium development site in a city already recognized as having the second least affordable homes in the world.

The land value for 1250 West Hastings Street pencils out to $1,587 per square foot. “That is about five times the city record,” said John Gee, an agent with Colliers International in Vancouver.

But Macario (Tobi) Reyes, CEO of Vancouver-based Port Capital Group, which bought the site, said the allowable density on the land means the deal is actually close to current Coal Harbour real estate values.

The site has development permits in place for a 14-storey tower with 25 condominiums and 3,500 square feet of office space. A heritage density allocation negotiated with the City of Vancouver added 10% to the existing 5.7 floor-space-ratio (FSR) allowed on the land. “The density works out to about 6 FSR, which is the maximum we will go,” Reyes said.

This would translate into 49,500 square feet of space, equal to a buildable-per-square value of $264, still at the top end of the Vancouver market.

Reyes said he expected the condominium units would sell in the $1,000 to $1,500 per square foot range, not a rare price level in Coal Harbour, one of Vancouver’s most expensive residential enclaves.

A LandShare report published by Colliers this year, which tracked prices being paid for residential sites in Metro Vancouver, found that typical prices in Vancouver’s West End and downtown ranged from $190 to $250 for each square foot of buildable space allowed for concrete condominiums.

Still, the Port Capital deal posted a much higher land price than recent comparables. For example, a numbered company paid $798 per square foot in land value for a 6,000 square foot lot on Granville Street that has a FSR of

3.5. This translates into a buildable-per-square-foot price of $228, according to Colliers.

The block buster sale in the West End/ downtown area this year, however, is the purchase of an entire block on Alberni Street and Nicola Street, where Wall Financial Corp. paid $83.5 million for a total of 43,182 square feet with a FSR of 6. If no higher density is negotiated in what is seen as long-term development, this works out to $322 per buildable foot for the land, which is zone for both residential and commercial use.

The prices being paid for potential high-rise condominiums indicates a market out of whack, suggests real estate analyst Frank Schliewinsky, principal of Strategics Marketing, which publishes the Vancouver Condo Report, a long-running industry newsletter.

Over the past 12 months the average asking price for new high-rise condos in Metro Vancouver has increased by 26% and the average price per square foot by 16%, he noted. And, based on what developers are paying for land, future condominium prices appear destined to keep rising.

Yet “[there has been] no big increase in average household income,” Schliewinsky said.

“The Vancouver high-rise condo market is becoming increasingly disconnected from the local economy and from local buyers,” Schliewinsky said “ In the past year, the market has shifted so much away from its historical basis that it really can’t be considered as a ‘Vancouver’ housing market anymore.”

Even Gee, who sold a 27,000-square-foot-lot at the University of B.C. earlier this year for $13.2 million – considered a record price at the time – is surprised at the prices now being paid for residential land. “It is ridiculous,” he said.

Copyright © Business In Vancouver

What’s Right For You: Townhouse or Condo?

Thursday, October 23rd, 2014

For first-time buyers, a condo seems the only way to get on the property ladder – but would a townhouse be a better bet? Real estate agent Barry Magee offers advice

Barry Magee

There are so many things to factor into the equation when you are looking at buying a property. In Vancouver, the house market is out of the question for many first-time home buyers, but is a townhouse out of the realm of possibility?

The primary consideration you’ll want to look at first is your personal requirements. Making an informed decision is always the path to making the correct one, so let’s analyze these two property styles and see which will provide you the functional, stable home you are looking for.

Identify Your Needs

The first factor you’ll need to analyze is how much effort you want to put into maintaining the property with your own know-how, which includes any outside space. If you like to garden, maybe looking at a townhouse is the right path for you – or perhaps we can find you a nice garden-level condo with lots of potential.

What about kids? Are you and your partner planning on having a family? If so, can you see the little munchkins being fully occupied within the walls of a condo or is an upgrade to the next level of property a better scenario to give them more space?

Remember that a condominium usually comes with plenty of amenities to make life a little more convenient, such as access to an exercise facility or a friendly gardener who comes by once a month to mow your lawn, making it very appealing to a lot of potential buyers.

Level of Control

One very real advantage to living in a townhouse is the possibility of having a certain level of control over alterations to the home, within the restrictions set out by the complex as well as the city. This will generally provide you with a higher level of flexibility that you would get within a condominium. It’s not quite the level of flexibility you would get with outright house ownership, but depending on the townhouse complex you buy into there can be a lot of freedom available.

When you buy into a condo, you have to follow all the guidelines set out by the strata corporation. In addition to this, you have to pay a monthly fee which is generally much higher than you would pay in a townhouse or free standing single family home.

Planning is Key

Planning is an essential part of the real estate process – it’s of critical importance to ensure you are making the correct decision for yourself and your future. Familiarizing yourself with the different options while taking a look at your personal financial capability is the key to choosing well.

Condo associations are full of rules that are decided by the community of owners within the building. So if you are OK with only having one voice among many in the decision making process, or even prefer it, this is a great option. If the thought of strict rules preventing you from making choices for your home gives you nightmares, but aren’t able to afford a single family home, then exploring townhouse ownership could be a great middle ground. But if a maintenance-free lifestyle is just want the doctor ordered, then purchasing a great condo unit will ultimately provide the happiness and security you are looking for.

There are great options out there for first-time home buyers, even in a market like Vancouver.

© 2014 Real Estate Weekly

Homeowners are paying down mortgages faster than thought

Thursday, October 16th, 2014

Jamie Henry

TORONTO – A new report suggests that Canadian homeowners are paying down their mortgages faster than they’re being given credit for.

CIBC deputy chief economist Benjamin Tal says homeowners are taking advantage of record-low interest rates to accelerate their mortgage payments, and shorten their amortization periods.

The CIBC World Markets study says that homeowners are paying an additional $11 billion a year in principal that isn’t being officially recognized by the Bank of Canada.

It suggests that an estimated 30 to 40 per cent of households with mortgages are accelerating their payments. While 40 to 50 per cent of borrowers are estimated to have amortization periods of less than 20 years, rather than the standard 25 years.

Tal says that means the debt-service ratio in the Canadian mortgage market — what it costs to carry a mortgage as a share of disposable income — is 7.3 per cent, one point higher than the 6.3 per cent officially used in calculations by the Bank of Canada.

Tal adds that this makes the Canadian housing market much more stable than previously thought, if interest rates were to rise.

“Canadian households did not only resist the temptation of low rates, they used those low rates to pay down debt at a pace not seen before,” he said.

“Despite a lethargic labour market and an unemployment rate that is still too high for the Bank of Canada’s liking, debt service performance in Canada has almost never been

© 2010 – 2014 Postmedia Network Inc.

House prices may be moderating says Royal LePage

Thursday, October 16th, 2014

Jamie Henry

The rise in house prices has begun to ease according to the latest survey from Royal Le Page. The figures show that house prices increased year-over-year up to the third quarter of this year. Condos were at the bottom end of the scale up 4.4 per cent to an average $257,377; standard two-storey homes were up 5.5 per cent to $441,714; detached bungalows climbed 6.1 per cent to an average $405,101. Toronto and Calgary have led the increases but Phil Soper, president and chief executive of Royal LePage says things are balancing out: “We are now experiencing a natural slowing in the rate of year-over-year price appreciation, with real estate markets moderating in most parts of the country, a transition to what our agents  refer to as a ‘Goldilocks market,’ one that is neither too hot, nor too cold. To be clear, we expect home prices to continue to grow in the months ahead, but at a slower rate than we have seen in recent years.”

Copyright © 2014 Key Media Pty Ltd

September sales slowdown; the year’s first decline

Thursday, October 16th, 2014

Jamie Henry

Despite a positive year-over-year result, national home sales were down in September; the first monthly decline since January. New figures from the Canadian Real Estate Board show that nationally in September there was a drop of 1.4 per cent from the previous month.

There were declines in 60 per cent of markets led by Calgary, Edmonton, Central Toronto, Kitchener-Waterloo, London & St. Thomas, Windsor-Essex, and Ottawa. There were increases in Fraser Valley, Vancouver Island, the Okanagan region, Mississauga, Durham and York regions of the Greater Toronto Area, Sherbrooke, and the Northern region of Nova Scotia.

Lower supply is one of the main factors in the slowdown in activity, with a 1.6 per cent drop in new listings in September, but high prices are also starting to bite. CREA president Beth Crosbie commented: “Affordably priced single family homes are in short supply in some of Canada’s hottest housing markets, which contributed to the monthly decline in national sales activity in September.”

Copyright © 2014 Key Media Pty Ltd

Scotiabank’s Porter Calls Canada Bubble Fears Overblown

Saturday, October 11th, 2014

Greg Quinn

Canadian concerns about a housing bubble are overblown in a country where credit growth is modest and the job market is stable, says Bank of Nova Scotia Chief Executive Officer Brian Porter.

“Bubble is perhaps the most overused word since the global financial crisis,” Porter said in an interview yesterday in Washington, referring to Canada’s housing market. “We are very comfortable in terms of our exposure, we think we have monitored it well, and we stress test that.”

Domestic mortgages worth about C$200 billion ($179 billion) are the biggest part of the Toronto-based lender’s balance sheet, Porter said, and the value of those assets can withstand even major jumps in unemployment or interest rates. Gains in housing in Toronto, a focus of concern among regulators after a surge in prices and condominium construction, are backed by population growth, he said.

“Canadian consumers have generally a very conservative attitude towards debt, and their household balance sheet including other assets is in very good shape,” Porter said.

Canada’s ratio of household debt to disposable income rose to 163.6 percent between April and June, close to the record 164.1 percent in the third quarter of last year, Statistics Canada said Sept. 12. The drop in the average five-year fixed mortgage rate to the lowest in decades at 4.8 percent this year has fueled unexpected gains in home prices and resales, which reached the highest in more than four years in August.

Consumer credit growth is close to the rate of inflation, between 2 percent and 2.5 percent, Porter said. Last week, Canada reported the jobless rate fell to the lowest in almost six years in September on the largest monthly increase in employment since May 2013.

©2014 Bloomberg L.P

Vancouver’s real estate boom: The rising price of ‘heaven’

Friday, October 10th, 2014

Iain Marlow And Brent Jang

Qiqi Hong walks past her sleek, blue-tiled hot tub and an infinity pool that seems to disappear like a waterfall into the chilly air above West Vancouver. She leans on the patio railing and breathes in the majestic ocean view that takes in the towering Douglas firs of Stanley Park, the skyscrapers of Vancouver, the Asia-bound freighters anchored in English Bay and – way off in the misty distance – the faint, rugged outline of Gabriola Island.

“We’re in heaven,” says Ms. Hong. “I can’t find any house that can compare to my house.”

The serene West Coast lifestyle did not come cheaply: Ms. Hong’s home cost $6-million. But it is an investment she can easily afford. The irrepressible businesswoman founded a successful lighting-design business in Beijing that thrived in China’s building boom. It now has more than 100 employees. But tired of Beijing’s hectic pace and foul air, she decided to come to Vancouver – after looking in Switzerland, Germany and the United States – on the Canadian government’s immigrant investor program in 2011. She now also owns three other houses on Vancouver’s west side, each valued in excess of $1.3-million, as well as a downtown condo she uses on weekends and lends to visiting friends.

Demand from wealthy migrants from mainland China such as Ms. Hong has helped make the Vancouver area the most expensive real estate market in Canada. The average price of a single-family detached home is $1.26-million, higher than any other Canadian city. The rising flow of foreign capital – stemming from a long tradition of transpacific migration and investment – has turned Vancouver into a truly global real estate market. One large real estate firm calculated that roughly one-third of the detached homes it sold within the City of Vancouver last year went to buyers from China. Vancouver developers and real estate firms have hit the jackpot, and some have rushed to set up offices in Shanghai and Beijing. Some now say Vancouver is a bedroom community for the world.

But Vancouver real estate prices have also become increasingly unhinged from local incomes, prompting concerns about affordability. It has led to middle– and even upper-middle class Vancouverites renting permanently or fleeing for cheaper suburbs such as Burnaby. There is a search for better data on foreign buyers, which is only haphazardly tracked. There is now a heated debate – that includes accusations of racism – about whether anything should be done to curb foreign buying, or if what is happening is simply an inevitable, and welcome, facet of globalization in a free market.

After all, the ebullient Ms. Hong hasn’t just bought houses here. She founded a charity with other wealthy migrants from China; the group just held a Thanksgiving lunch for 1,000 seniors and recently collected $250,000 for a local hospital and pet shelter. She has founded several businesses in Vancouver, including one in real estate, and drives to ESL classes. She’s learning English, and has even joined a protest, hitting the streets during the recent B.C. teachers’ strike. While she stays busy in Vancouver, her husband frequently flies to China to manage the firm.

“In my opinion, I think it’s good for the economy,” Ms. Hong says, noting that the number of Chinese residents on her street has soared in recent years and that the local businessman she bought her house from made a cool $1.5-million more than he originally paid. “In Vancouver,” Ms. Hong says, “the house prices are perfect.”

Vancouver’s housing boom has much to do with soaring demand for detached homes in tony neighbourhoods. Vancouver’s west and east sides, West Vancouver, Richmond and large pockets of Burnaby have most of the region’s top-tier properties. On Vancouver’s west side, detached home prices soared 51.5 per cent over the past five years to nearly $2.3-million for the benchmark index, which strips out the most expensive resale properties.

Dan Scarrow, who recently opened an office in Shanghai for Vancouver-based Macdonald Realty Ltd., one of the largest real estate firms in British Columbia, makes no apologies for courting prospective home buyers in China. He says 178 of the firm’s 531 sales of single-family detached homes within Vancouver’s city limits last year – or 33.5 per cent – went to buyers with ties to China.

“Vancouver has become a global resort city. The prices have decoupled from local wages,” says Mr. Scarrow, whose mother, Lynn Hsu, moved from Taiwan to Vancouver in 1979 and is now president and majority owner of Macdonald Realty.

As he pursues investors in Shanghai, he intends to steer buyers toward commercial properties if they have no interest in settling down in Vancouver. Some foreign buyers have purchased Vancouver real estate purely as an investment, without occupying the properties or renting them out, but that has triggered some resentment because it’s sometimes seen as detracting from the vitality of a neighbourhood.

But in general, Mr. Scarrow believes the positives of offshore money far outweigh negatives. Baby boomers can cash out at a profit and downsize with enough money left to help out their children. Selling houses also increases sales of appliances, furniture and home renovations. Vancouver’s housing market has become an important ecosystem unto itself, which explains why developers are anxious to keep foreign money flowing.

The twentieth century’s geopolitical turmoil sent wave after wave of Asian migrants across the ocean. Some fled Mao’s China. Taiwanese moved during cross-strait tension. Sikhs arrived after persecution in India. Many Persians have fled Iran. One of the biggest waves came in the late 1980s and 1990s, as wealthy Hong Kong residents – flush from a housing boom there – sought a more stable home ahead of the 1997 handover.

Hong Kong investment in Vancouver real estate had been going on for years, but real estate companies began marketing massive new developments in Vancouver and Richmond. In 1988, Li Ka-shing, the richest man in Asia, bought the 203-acre Expo 86 site in Vancouver for what would become Concord Pacific Place. David Choi, the entrepreneurial founder of Royal Pacific Realty who sold real estate in Hong Kong, puts it this way: “Hong Kong people don’t vote with their hands,” he says. “They vote with their feet.”

That migration is part of Greater Vancouver’s proud, multicultural history and present cosmopolitan identity: The population in the suburb of Richmond, for example, is now nearly 50 per cent Chinese, the most ethnically Chinese city in Canada.

‘Millionaire investors’

Richard Kurland, an immigration lawyer who works with wealthy Chinese migrants, says “the main difference” between previous waves of Asian immigration to Vancouver and the current flow of wealthy investors is “the mega-size of the [Mainland] Chinese economy.”

The tectonic economic rise of China has created – in the most populous country on Earth – an enormous new millionaire class. And nearly half of all wealthy people in China also want to immigrate to a developed country within five years, according to a Barclays PLC survey.

At least 30,000 millionaires from Mainland China have immigrated to B.C. over the past decade using the federal government’s investor immigrant program, almost all of them settling in Vancouver. The federal program allowed those with a net worth of $1.6-million to lend the government $800,000 interest-free in exchange for permanent residency. The program was ended in the 2014 budget – with a backlog of 80,000 applicants, roughly 80 per cent of which were from Mainland China – but is expected to be re-launched soon.

“We’re going to continue to get a solid supply of millionaire investors,” Mr. Kurland says.

While Chinese demand is practically unlimited, supply in Vancouver – particularly for detached homes – remains restricted: There are mountains to the north, the U.S. border to the south, the agricultural land reserve, multiple rivers and bridges, and the vast Stanley Park. “There’s not a lot of dirt here,” says David Goodman, a principal at real estate firm HQ Commercial.

A 2013 report from Sotheby’s said 40 per cent of Vancouver’s luxury home sales went to foreign buyers – mostly buyers from Mainland China, but also from Iran and the U.S.

Ryan Rosenberg, another Vancouver-based immigration lawyer, says wealthy Chinese see Vancouver as a safe haven. Some immigrants, however, still spend much of their time overseas, especially businessmen who leave their wife and child in Vancouver, he says. At some luxury homes on Vancouver’s west side, he notes, agents have noticed a pattern: A lot of master bedroom closets contain only women’s clothing. “If China is a place to make money, Canada is a place to save it,” he says. “Canadian immigration status is one of the world’s best insurance policies. Vancouver has become an international bedroom community.”

The affordability problem

The Vancouver housing market has been less kind to Brent VanderRose and his wife Amy, who are both nurses. A few years ago, Mr. VanderRose purchased an older one-bedroom, 643-square-foot condo in Vancouver’s Fairview neighbourhood for $385,000. He and his wife Amy loved the neighbourhood and the ability to bike to work, and wanted to start a family there. But they could not afford a bigger place nearby. “It was really disheartening,” he says. “I feel like it’s a Canadian right to own a home.”

The VanderRoses finally decided on a $585,000 detached, three-bedroom home in the suburb of Surrey, but couldn’t sell their older condo before the move-in date. Because they couldn’t afford two mortgages and condo board rules meant they couldn’t sublet their property, they rented out the new house at a $500-a-month loss, moved into a sublet with their newborn, and temporarily sent the cat and dog to in-laws. They finally sold the condo at a loss for $335,000. They are expecting another child, but say they are stopping at two – because of housing costs.

This is typical of Vancouver’s polarized boom: While owners of detached homes see big returns, condo and townhouse owners sometimes see little gains in a flat market, or lose out.

Although it’s surrounded by some of the priciest real estate in the city, the University of British Columbia has been sideswiped by the boom, since many students and faculty can’t find affordable housing. The university launched a housing action plan, pledging to build more affordable housing, but it can do little as prices for local properties rise beyond the reach of even well-paid professionals. Yves Tiberghien, director of UBC’s Institute of Asian Research, joined UBC in 2001 and has two kids, but he is still renting. “I am much less attached to Vancouver, because settling down is impossible,” he says. “An academic salary cannot allow someone any more to buy a family home, especially if you don’t have time to commute far.”

After Hong Kong, Vancouver is now the second most unaffordable city in the world with house prices 10.3 times the median household income, according to a 2014 report from the Demographia research firm. Unaffordability is also a vicious circle. “Severely unaffordable markets are also more attractive to buyers seeking extraordinary returns on investment,” the report says, which in turn raises prices further.

“What is interesting about Vancouver is how disproportionate the affordability issue is, how big the house price is compared to the average income,” says David Ley, a UBC geography professor who wrote a book about Vancouver called Millionaire Migrants.

In his 2010 book, Mr. Ley shows that the rise in house prices were “prised loose” of local factors, and correlate almost perfectly with international migration to British Columbia. Vancouver now has the highest household debt as a percentage of annual income in Canada, he adds, citing a 2013 paper by University of Toronto professor Alan Walks. “In a bigger city, that effect might be a bit more diluted. But here, with 2.5 million people – with limited land for development – it has a huge impact.”

The race issue

That outsized impact has led to heated discussions in Vancouver, mainly between those who think something needs to be done about affordability and those who want to keep the foreign money flowing. These debates have been muddied by a lack of data and inflamed by accusations of racism.

They have also been complicated by subtle tensions between Mainland Chinese immigrants to B.C. and earlier arrivals from Hong Kong, some of whom assume wealth accumulated on the mainland is the result of rigged competition in a state-ordered economy, proximity to government officials – or corruption.

The U.S. National Association of Realtors knows that 8 per cent – $92.2-billion (U.S.) – of U.S. housing sales are from foreign buyers, and that Chinese buyers accounted for 24 per cent of that volume. They also know that Asian buyers prefer West Coast property. But in Canada there is no such data. And some like it that way. Developers, Mr. Ley says, have long claimed racism to suppress discussion of foreign investment. One developer says limits on foreign investment would “tread very close” to the Chinese head tax. Others suggest it is racist or inflammatory to even discuss the source country of investment.

“It is racism. Maybe I shouldn’t say that. It’s small thinking,” says Ian Gillespie, the chief executive officer of Westbank, a Vancouver developer with offices in China that built Vancouver’s Fairmont Pacific Rim hotel.

The real estate sector, which has played down talk of offshore investment, does not think foreign capital is an issue. “Just because you have a Chinese name doesn’t mean you’re a foreign investor,” says Cameron Muir, chief economist at the B.C. Real Estate Association.

Many remain unsure about what exactly could be done to restrict foreign buying. Statistics show foreign buying is a Vancouver phenomenon, but higher levels of government with power to act don’t necessarily care. One long-shot candidate in Vancouver’s mayoral race, Meena Wong, who is from China, suggested a tax on empty homes to fund affordable housing.

Some point to Singapore, which recently raised its tax – called a stamp duty – on foreign purchases of local real estate to 15 per cent of the purchase price, with a 5-per-cent tax on permanent residents. The British government, eyeing London, moved in the 2014 budget to have its 15-per-cent stamp duty on foreign buyers apply to a greater percentage of home sales, reducing the target threshold from £2-million to £500,000.

David Ren, who made his fortune in telecom equipment and purchased his ocean-side West Vancouver home for about $3-million (Canadian) several years ago, says an open-door policy has brought prosperity.

Sitting on a gold-coloured couch with ornately carved wooden arms, he compares what is happening in Vancouver real estate to Qingdao’s fish market. Decades ago, only locals in his hometown bought seafood and prices were low. As China’s economy took off, Qingdao fisher-folk found they could sell to a global market, and locals saw prices soar.

“It’s globalization. As long as Vancouver welcomes immigrants, there will be people willing to move here – and inevitably prices will get driven up,” Mr. Ren says. “That’s the choice of Vancouverites: Whether we will welcome the benefits that come with this foreign investment, or whether we want to say no to globalization.”

As evening falls over the palatial lots of West Vancouver, Ms. Hong’s guests begin to arrive. Her husband Qing Feng is turning 51. And before the white bottles of Moutai baijiu (rice wine) come out, he is cooking amiably with his 10-year-old daughter, trying to recreate a ratatouille she has seen on YouTube.

He then prepares a feast of a dozen dishes with the wok on their gas stove: A whole fish, various vegetable dishes, stir-fried egg-and-tomato, a bowl of peanuts. Guests, including their friend Mr. Ren, toast Mr. Feng repeatedly. More baijiu is poured. Wine glasses are refilled. Lights twinkle on the far shore.

The ratatouille is roundly praised. But there is something about it that is not quite French. A Chinese guest, a former employee of Ms. Hong’s, asks Mr. Feng if he has tampered with the original recipe. He roars with approval. He has, indeed: Soy sauce, some spices, pork.

“Fusion!” he yells out.

© Copyright 2014 The Globe and Mail Inc.

The Walks at 12091 70th Avenue – townhouses by Scott Hill Developments

Thursday, October 9th, 2014


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