Chinese buyers snap up most of ritziest homes

Real estate bubble trouble may be on horizon: report

Rudy Nielsen is president of Landcor Data Group.

The China syndrome stoking Metro Vancouver home prices is very real, according to a new study of B.C.’s real estate markets.

Landcor Data Corp. examined luxury home sales over the past three years in Richmond and Vancouver’s west side and found a large and growing proportion of buyers are likely from mainland China.

President Rudy Nielsen said his researchers conducted the survey to either verify or disprove anecdotal claims by realtors that Chinese buyers are increasingly skewing the higher end of the Metro market.

Landcor looked at transactions and flagged buyers with pure Chinese names who have spellings typical in the People’s Republic of China, filtering out those with Westernized first names as well as non-Chinese names.

They found 74 per cent or 122 out of the 164 homes sold in 2010 above the “luxury” threshold ($3 million for houses on Vancouver’s west side and $2 million for condos in Richmond) were bought by buyers who fit the mainland China profile.

That was a jump from 2009, when 68 per cent of luxury homes (49 out of 72) in the two areas were matched to likely Chinese buyers.

In 2008, 46 per cent or 32 out of 69 sales fit the profile.

“Definitely the Chinese are here and they’re buying,” Nielsen said.

The same phenomenon of increased Chinese buying is being reported in more desirable neighbourhoods from White Rock to the North Shore.

“The Chinese investor is investing or buying in certain areas but not every area,” Nielsen said. “Hot areas were Richmond, parts of Vancouver, West Vancouver and believe it or not, South Surrey.”

South Surrey – where Nielsen lives – offers Chinese buyers an unheard of chance to get an acre or two of land in a good area near good schools, he said.

“The for sale signs don’t last more than a week,” he said. “They love it here.”

Clean environment, a stable economy and safe society are among the attractants.

There’s some trickle down to other areas and lower-end segments of the market, he said, but called those impacts minor.

The average price of Metro Vancouver detached houses has climbed to $807,000 in the first quarter of this year, up 11.9 per cent from a year earlier.

Prices have risen swiftly in Richmond, where median house prices broke through $1 million earlier this year.

Nielsen is quick to point out Landcor’s senior data analyst who crunched the numbers hails from the city of Wuhu in China’s Anhui province and says the research firm has no position on complaints foreign buyers are hurting the affordability of housing in B.C.

China’s government has sought to rein in “wildly overheated” housing markets in Shanghai, the report says, prompting the middle class in China to move more of its growing wealth offshore, to perceived save havens that include Metro Vancouver.

But Nielsen said other offshore investors are also arriving, adding he has similar wealthy clients from Europe and California looking for an escape home in the Vancouver area in case of economic collapse and unrest back home.

“So far, the Chinese are the big players.”

The appetite of Chinese firms for B.C.’s commodities is also being felt in the rest of the province.

The Landcor report notes Chinese state firms recently bought into a major gas field near Dawson Creek and took over a pulp mill at Port Alice.

But Landcor warns Canada’s resource boom and soaring dollar could eventually end in a crash that could also see a flight of Chinese investment dollars out of B.C.

“The PRC is heavily investing in Metro Vancouver for homes (and) outer B.C. for steady resource pools, but for how long?” it asks. “Bubbles can certainly burst and the economic shrapnel could be painful.”

The risk, it notes, is that the rocketing resource sector and resulting high Canadian dollar drives out domestic manufacturing, tourism and other less volatile industries, leaving the country ever more dependent on the commodity boom and facing worse pain when it turns to bust.

Governments and households should all pay down debt and amass savings for the commodity crunch to come, it says.

“But what should be done and what’s being done are very different.”

Just Posted

Men accused in Michael Bonin’s murder knew him: IHIT

20-year-old’s body found on a rural service road North of Hope in April

Union files human rights complaint over Chilliwack school trustee’s LGBTQ comments

Board and trustee Barry Neufled facing $50,000 tribunal charge over alleged ‘unsafe work environment’

Drone photos show Hope from above

Chris Barker captures a new perspective of Hope

Smokers will soon have fewer places to light up, smoke hookah and vape in Hope

New Hope district bylaw to expand definition of smoking and add more banned areas

Highway 9 reopens after early morning crash

Accident on the Agassiz Overhead

VIDEO: Drone race in Chilliwack kicks off west coast league in new year

Indoor course starts 2018 for B.C.-wide group at Heritage Park

More places in Hope to pick up Naloxone

Hope and Area Transition Society opens doors for people seeking overdose antidote

Pipeline routing through Chilliwack subject of NEB hearing Monday

City of Chilliwack, WaterWealth Project and local Sto:lo intervenors in the hearing

Senior randomly stabbed in B.C. mall food court

Woman arrested after victim, 71, suffers serious injuries

VIDEO: Southern schemes on stage in Langley

The farce of “The Foreigner”

B.C. Liberal hopefuls begin final leadership push

Five MLAs, one outsider pitch policies to party members

Vancouver Island marijuana producer bought by Aphria in $230M deal

Aphria’s annual production forecast increases to 230,000 kgs

UPDATED: ‘Young, innocent’ teen hit during Vancouver shootout dies

15-year-old Coquitlam boy was in a car driving by the scene

Fraser Valley truck driver killed in Alberta semi truck crash

Young driver was adjusting load on side of highway to Fort McMurray

Most Read