“A Macdonald Realty analysis of Chinese buying trends shows that 78% of homes in Vancouver valued over $2 million were bought by this demographic.”

Wow. 78% is a lot. More than we’d have guessed.  -vreaa

From MacDonald Realty November Market Update, November 2010 –
“Macdonald Realty president & CEO Lynn Hsu showed a Macdonald Realty analysis of Chinese buying trends which showed that 78% of homes in Vancouver valued over $2 million were bought by this demographic. This trend is expected to continue as there is a 10-year backlog of investor category Chinese immigrants waiting to come to Canada, the vast majority of which are planning on settling in Vancouver. Sellers of these properties tend to pocket the appreciation in their homes and move to other asset classes in the city or to other municipalities in the province, which results in an upward push in prices.”

16 responses to ““A Macdonald Realty analysis of Chinese buying trends shows that 78% of homes in Vancouver valued over $2 million were bought by this demographic.”

  1. Amazing that mainland Chinese are only allowed to withdraw 50K a year from the motherland… Nice to know our government doesn’t ask too much about the legitimacy/legality of these monies… Oh well, bribes paid in Mainland China have to laundered somewhere…

  2. Many traditional Canadians are starting to feel like “Second Nations Peoples”, can no longer buy where they were born. Would the Chinese government let that happen in China? No fucking way.

  3. reminds me of the Japanese in the 80’s/90’s. They came through and paid big bucks and then when they decided to sell and go home, many of them sold at a loss. I suppose it all depends how desperate you are to buy a lifeboat, and how much is dirty money.
    I suppose if they are all neighbours to each other its ok, but not sure id want them as my neighbours

  4. Geoff- we are Second Nations . I think you mean we are starting to feel like the First Nations. First only in name, but owning very little land (that nobody wanted)

  5. Well guess what: Vancouver is much bigger than the $2MM pricepoint. If the locals can’t afford to buy, prices come down. What do you think happens to the price distribution? Everything drops 40%, except the stuff above $2MM that stays where it is because of “rich Chinese”? That would be the funniest looking histogram in the history of real estate.

    If everything else drops significantly chances are offshore money won’t be overpaying, they’ll just buy nicer homes for the same price. Same as what bears will be doing!

  6. @ jesse: if what you say actually happens, then Vancouver starts to resemble a Mexican resort town with the uber wealthy living in palaces surrounded by fortified walls and the rest of us living in cardboard shacks on the outskirts of GV (or in other words, what I have been hinting at for some time). Forget about living in 4000 sq ft McMansions, just being able to afford your own car (along with the fuel, insurance, parking and permits to drive within the city) will soon be out of reach for many.

    Some of the comments here are borderline racist, which is disappointing. The issue with the Chinese (as well as the E. Indians) simply boils down to their huge populations. It’s not like their presence is only being felt in Vancouver. I think if we dug deeper into the numbers we would find that greater and greater numbers of people from many other wealthy and rapidly emerging countries have also set up shop here.

    I think too many are focusing solely on the high price of RE and ignoring the fact that prices of basically everything across the board have increased dramatically…and that is the real issue.

    • I think a pair of jeans costs pretty much the same as they did more than ten years ago.

      • I think it is a given that the average family today has less money left over for new clothes after the necessities of life (food, fuel, shelter etc) are taken into account. I guess its a good thing those jeans are made in China.

      • VREAA: I agree.
        Same thing with cars– they cost about the same as they did a decade ago.
        Same thing with milk– a decade ago I was buying milk for about $4 for a 4L jug at Superstore. Same price these days– over the last couple of months I’ve seen varying prices on 4L of milk– $3.97 (Costco) to $4.14 (Save-On).
        Same thing with gas– in the summer of 2005, gas was going for $1.15/L, same as now. So even for gas, you can say that there’s been no inflation in 5 years.

        Inflation? Only in Vancouver houses, it seems.

      • Yeah. Perhaps the decreased discretionary spending is due to the increased cost of being a member of the home owner cult (mortgage + taxes + maintenance + cost of move every 7 years + missed mortgage helper rent + renos + gas to get to home depot + inflatable halloween stuff to store in basement; etc).

  7. For the Chinese it is all about show, if their friend bought a house for 1.5 million, they will need to buy one for 1.6 million. The house itself does not really matter as long as they pay more then their friend is what really matter.

  8. The scam perpetrated by the chinese is simple:
    They borrow money through their communist party connection in Mainland China and by offshore. The borrowed money will never be paid anyway, and they end up with a hard asset. Not a stupid game for the connected chinese. You cant compete against that.

  9. @bob haha I like that!!! So true so very true…but majority of ppl r like that thou..flashy ones that is..

  10. Historical CPI – All items (from StatsCan)
    1970 – 20.3
    1975 – 29.0
    1980 – 44.0
    1985 – 63.0
    1990 – 78.4
    1995 – 87.6
    2000 – 95.4
    2005 – 107.0
    2009 – 114.4
    2010 – 116.9 (as of Sept)

    CPI energy
    2002 – 100.0
    Sept 2010 – 138.7

    CPI food
    2002 – 100.0
    Sept 2010 – 122.9

    These figures look like they’re set to skyrocket as commodity prices (esp ag) have ramped up dramatically since late summer (for all the wrong reasons). Here are a few examples…

    oj +15%
    soybeans +35%
    coffee +50%
    rice +55%
    wheat +65%
    corn +80%
    oats +85%
    sugar +125%

    crude oil +20%
    heating oil +25%
    gold +20%
    copper +40%
    lumber +45%

    Brace yourselves for major sticker price shock commencing in Q1/Q2 of 2011.

    • Thanks for the data, bullwhip.
      Yes, commodities are soaring and, yes, at some point this will flow through to the cost of everything. At that point headline interest rates will surge, bonds will plunge, etc.
      But when?
      Remember mid-2008 when all commodities were surging?… recall the result.
      So… inflation now? or another deflationary wave first, with inflation later?

  11. I love how Chinese money is somehow dirty or illicit. Excuse me, if you anyone who is doing business in China, you’ll know it’s a bonanza. There is no reason to do things under the table when legitimate means are so profitable. As hard it is for many of you to believe, there are many people making shit loads of money because they are taking advantage of business opportunities. When did we all start getting so xenophobic?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s