What’s happening in the trenches of RE sales? This exchange at RE Talks, starting 25 Nov 2009 9:12 am, with a realtor responding to some questions about buyers -
MikeStewartRealtor – “I am very optimistic about Vancouver’s prospects and [that is] because of what I see on the frontlines.
Out of every 10 buyers you have dealt with, how many buyers get high ratio financing (5% down)? Less than 10% – Most put down at minimum 20% and are not highly leveraged.
How many buyers are first time buyers? 20-30%
How many are rich foreigners? 20-25%.
How many are poor foreigners (i.e. high ratio financing)? Zero
How many need dual income? 40%
Are you seeing foreigners buying with cash and using Vancouver as a vacation property? 15% of my business.
How many properties are bought as rentals? 20%.
The people I work with buy and hold because they see big potential for Vancouver.”
Greenhorn (10:09 pm) – Anecdotal evidence I have from a small sample in that rich money is buying downtown Vancouver and the West side. Iranians, Mainland Chinese, Koreans and few buyers from the Middle East. Pretty interesting.
UPDATE: In response to a request for further info, Greenhorn (28 Nov 2009 1:23 pm) is kind enough to add the following -
“My stats come from realtor friends who are quite honest about the answers they give me regarding who is buying downtown and the westside. I also have friends who live in these areas who track every sale in their neighborhood and who know who their new neighbors are. Most purchasers are living in their properties and some are renting them out. It is by no means scientific, but there are underlying trends and patterns that are becoming noticeable. If you discount or ignore the rich foreign purchaser, you will never reconcile how prices in Vancouver can be so high, with record job losses and a weak economy. Of course the Vancouver local with a job can compete with rich foreigners in bidding up prices and getting caught up in the fervor, because interest rates are at record lows, and credit is easy. Everyone in Vancouver is rich now because they are either wealthy foreigners or can qualify for huge bank loans. Which group is dominating the market? The rich foreigner or the heavily financed local yokel? I have no idea, but I am hoping it is the former so that our real estate market stays orderly. If it is the latter, we are in for a world of pain. It sounds like there are a lot of foreigners with cash that are buying.”