Will Mainland Chinese Buyers Start to Focus on Victoria?
James McNaught, President of PacWest International
, sent this information to me today which I thought was very interesting and I wanted to share this with you.
Why have the Chinese been focusing on Vancouver?
There’s no one easy answer, but one of the main drivers is that is has a large Chinese population with all the amenities that go along with it.Vancouver
area Chinese-language newspapers are being used by realtors and agents
to specifically target mainland Chinese buyers, citing Canada and
Vancouver’s stability and strong local real estate returns. There are realtors from Hong Kong and mainland China, flying over, putting packages together, and then bring people over. The prices may seem high to us but present a “Real deal"… real deal from world point of view. For
mainland Chinese, metro Vancouver is what Phoenix or Arizona is to
Canadians… Cheap. They haven’t really had a good look at Victoria where
if they think Vancouver is ‘cheap’ they will be shocked at the luxury
they can purchase in Victoria.
What about Victoria?
real estate representative for China, on arriving in Canada in February
2011 reported that contacts said the property in Victoria looked very
beautiful, but they didn’t think it was in Canada because it said
British Columbia and they had never heard of Victoria. In Victoria most of the action is between $1- to $3-million for luxury properties. Victoria
is a very small place if you are coming from a big city. The base
population is quite small so in comparison to a larger city like
Vancouver it will feel quite limited. To the Chinese who come from large
cities. Victoria is a much more relaxed city. Vancouver is much busier
and things happen at a much faster pace. Toronto is busier and faster
again, New York faster again. However, Victoria can compete quite nicely
with Vancouver in many respects and certainly surpass it in others. The
attractions of Victoria in particular are the mild climate and
breathtaking scenery, the cultural diversity and educational
opportunities, and the array of entertainment and architecture. There is
no well-established Chinese population of sufficient size in Victoria,
and there hasn’t been a concerted marketing effort to attract mainland
Chinese to consider Victoria as a place to live. That will change, for
the Chinese bring a vibrant, energy infused culture and work ethic to
Canadian communities. Their economic influence on a community is
enormous. One only has to look at Richmond, BC. To a
certain extent Mainland Chinese don’t know Victoria exists and if they
do they know little about it. ‘Out of sight– out of mind.’
Meanwhile in Vancouver, BC here is an example of the real estate market;Vancouver West, Shaughnessy Area
LIST PRICE - $3,890,000
SELLING PRICE - $4,388,000 (sold in five days $498,000. over asking price!)
64 year old home, one storey, 1450 square feet with a finished basement (627 square feet), three bedrooms and two bathrooms.
Lot size: 103 x 158
Chinese demand for Vancouver real estate is at an all-time high with many
single family properties on Vancouver’s west side and in Richmond
selling well over asking price. Bidding wars are back, in a big way with
many properties being bought ‘sight unseen’ by Chinese investors
anxious to own a piece of Vancouver.
The emergence of a huge
class of ‘new rich’ in China as a result of their recent economic
prosperity has left many people looking to Vancouver as a place to park
wealth. Even many of the middle class in big cities like Beijing and
Shanghai are able to afford investment real estate in other countries. The
torrid affair between eastern Asia and Vancouver real estate, now in
its third decade, is actually a love triangle from which each party
derives very different things. When wealthy Chinese immigrants buy
property in Vancouver—and they utterly dominate the top end of the
market—they’re actually buying a form of insurance.
The trend has indicated that these offshore investors prefer Vancouver west side and Richmond,
but the phenomenon is now spreading to other areas across the lower
mainland including Burnaby, West Vancouver, and White Rock and even into
the Tri-Cities. Some buy a single family house on a lot and then bulldoze the house, even though the house may not be old or in need of repair.
demand for Vancouver real estate has many drivers, one of them
ironically being a limit on property purchases in Chinese cities.
Growing restrictions imposed by government have caused many Chinese
residents to focus on international destinations like Vancouver. These
attempts to cool an overheating market over there have served to heat
things up over here. A recent report in the China daily, a state-run
publication based out of Beijing stated that buyers from the Chinese
mainland now represent between 40 and 50% of the current market for
pre-sale projects in Vancouver.
It is expected that this offshore demand will only strengthen going forward into the Spring and Summer months
Bosa Properties 34 storey Sovereign tower in the Metrotown area of
Burnaby sold out immediately, surpassing the single day sales record in
the Burnaby market by selling $98 million worth of real estate.
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