Spot The Speculator #29 – “Alice Zhang, who moved from Hangzhou, China, to Vancouver two years ago, now lives in one of six properties that she and her husband have purchased in Vancouver since moving here.”

From ‘Vancouver’s luxury home sales surge, largely due to influx of offshore money‘, Vancouver Sun, 14 Mar 2011“Alice Zhang, who moved from Hangzhou, China, to Vancouver two years ago, now lives in one of six properties that she and her husband have purchased in Vancouver since moving here. Zhang, who has two children, is waiting to move into a new home they’re constructing on a Shaughnessy lot that they bought for about $3.1 million. The house is expected to cost another $3 million, which Zhang believes is a good deal.
“We moved from the most beautiful city in China to Vancouver, which we consider more beautiful,” said Zhang, whose family owns hotels and a real estate development company in China.
“I think that compared to other Canadian cities, Vancouver is expensive. But, China is more expensive [than Vancouver].
“And the air is very fresh here and it’s very green. You feel like you’re in a garden.”

As we’ve said before, SPECULATION is driving this bubble. Watch as speculators of every stripe dump their properties during the coming meltdown. -vreaa

38 responses to “Spot The Speculator #29 – “Alice Zhang, who moved from Hangzhou, China, to Vancouver two years ago, now lives in one of six properties that she and her husband have purchased in Vancouver since moving here.”

  1. “hotels and a real estate development company “…

    I dare say Ms. Zhang will feel right at home…

    Which reminds me, are there any VREAA readers with access to legal databases/online provincial corporate registries who’d care to investigate the numbered entities on the list of Christy Clark’s recent campaign donors???

    😉

  2. Nobody here or in the Sun has explained HOW and WHY they have so much money to invest. I know of the capitalist expansion in China and the disparity of income, but still unsure how these people have so much money. What will they do here in Canada? Do they set up a business or just live their life without working? the problem is for people here who don’t have that kind of money, don’t have income to compete etc. Most locals are priced out and this is the sad reality.

    • Someone can probably speak to this better than I can but I think its a case of having a good amt of oligarchs, easy money from banks (b/c of financial crisis) and just the fact that theres so many people… they have more people thus more millionaires.

    • I brought up this point before and I was labelled xenophobic. The reality is that federal and provincial government doesn’t give a crap about the effect of Business Class immigration on local economy. The new wave of immigrants from China come here as business investors. They pay hundred something thousand dollars to the government and get their landing rights (another option is to invest $400,000 in “a” business).

      That’s it. No more contribution to Canadian economy is required. Then, they park tens of millions of dollars in real estate and compete with our hard-earned dollar.

      These assets have zero liquidity and they don’t help local economy. Increased property tax is imposed on everyone, poor or rich. I have yet to understand how these temporary jobs created during the current boom would help the economy in the long run.

      • You realize that when the yellow menace buys a house off of a good decent white family, that money is actually transferred into the hands of the aforementioned white family and not necessarily into an opium den or blown away in some illicit cock fight?

        When you make it difficult for immigrant professionals to gain accreditation for their foreign qualifications, what do you expect them to do? Bang their head against the wall or park their money and keep making millions?

        I think you’re going about this all wrong. In Europe, people aren’t afraid to really speak up about what they’re really thinking and they hold rallies shouting slogans at people who don’t look or live like them to get out and stop stealing their jobs. Good hard working people who earn their dollars. Not like immigrants. You need to organise yourself and like minded individuals, SmallTalk.

      • @matt,
        “When you make it difficult for immigrant professionals to gain accreditation for their foreign qualifications, what do you expect them to do?”

        I dont think anyones trying to practice their profession here. From what Ive heard most asian investors are “satellite” families where the main ‘breadwinner’ will heqad right back home after setting up the kids here. Some one has to look over the slave labour. So take you thinly veiled insults and shove them up your P.C. ass.

      • El Magnifico

        @matt
        “In Europe, people aren’t afraid to really speak up about what they’re really thinking and they hold rallies shouting slogans at people who don’t look or live like them to get out and stop stealing their jobs. Good hard working people who earn their dollars. Not like immigrants.”

        You have probably never lived and work in Europe to say such a #$%#* thing. All the racists are in Europe and all the tolerant folks are in Canada? Yeah, right… Europeans are surely less “politically correct” (understand “hypocritical”) than Canadians.
        May I also remind you that there is no dollars in Europe, but Euro, British Pounds, etc…?

  3. calguy, I have yet to see a respected, impartial source verify any of this hype and the media seems uninterested in finding such a person.

  4. “As we’ve said before, SPECULATION is driving this bubble. Watch as speculators of every stripe dump their properties during the coming meltdown. -vreaa”

    The question is if most speculators are living on the margin and will be forced to dump when the BoC raises the interest rate, inducing the Alices of the market to follow suit, or if there are enough Alices (who can afford higher interest rates) that the market will shrug off any such raise?

    • Only a small percentage of the dumping will come from those forced to do so (insufficient funds, foreclosures, etc).
      A larger supply will come from speculators with a momentum investor mindset, who love an asset that is appreciating but then get antsy, then fearful, then panicked as it drops 10%, 20%, 30% etc.
      It may be easy to look at charts and see that one should buy the panic and sell the euphoria, but that is not what the vast majority do.

  5. Do the mainland Chinese really have the money to pay $2-$3 million for a lot in Vancouver? Or are they placing a one way bet with 5-10% down and the Canadian taxpayer covering the rest?

    From CMHC’s website:

    Newcomers with permanent resident status have access to all CMHC
    Mortgage Loan Insurance products (subject to product specific eligibility
    requirements).
     For permanent residents, where there is limited Canadian credit history
    and where foreign credit bureaus are not available, CMHC continues to
    consider alternative sources of payment history for Loan-to-Value ratios
    between 80.01% and 95%.
     Newcomers with non-permanent resident status have access to
    CMHC-insured financing of up to 90% loan-to-value ratio for the
    purchase of a 1 unit owner-occupied residential property.
     No additional fees or premiums as a result of residency status – standard
    product specific premiums apply.
     No minimum period of residency required.

    The other source of rapidly rising prices can well be an increase in mortgage fraud where related parties are flipping property or using straw buyers with non-existent down payments to qualify for CMHC funding.

  6. There is a term in Chinese that roughly translate to instant millionaires. Basically these describes people who for whatever reason or luck made a vast fortune ($1M USD to $5M+) in a short period of time (less than 5 years) doing whatever they did. There are lots examples of these in China if people here, who constantly complains about how it’s not possible for mainland Chinese to have that much money, actually reads Chinese newspaper that are published in China.

    It’s fairly common for an average factory owner to rake in a million to ten million yuan a year which are then generally invested in local real estate which have appreciated more than 10% to 20% a year or sometimes even 10% a month!

    When you have a huge economy growing at over 10% a year for over 20 years and a RE market that’s also been exploding at the same rate or more, it is not hard for a lot of risk takers to make tons of money. 30 years ago China is so far off the radar and so poor that a coloured TV is considered a super luxury item. A family with a coloured TV, fridge and washing machine is consider upper middle class who have everything a family could dream off. Nowadays a middle class Canadian family wanting to visit a middle class Chinese family/relatives living in a big city would have a hard time finding gifts the Canadian family can afford and still impress the Chinese family. It used to be a gift of $500 CAN is considered to be really good, now even $3000 doesn’t count for much. My wife’s nieces have asked for luxury gifts like $1K watches and IPhone like kids here asking their parents to buy them a Nintendo Gameboy.

    As well the wages in China are not that low. Yes the factory workers and migrant workers wage are pathetic and we often comment how someone can survive on less than 2000 Yuan a month in Beijing or Shanghai. But a lot of mid-level managers, senior professionals, finance professionals, etc can and do make over $50K Canadian/year. They don’t represent the average Chinese worker but they do make up a big enough % in big Chinese cities.

    Remember 10% of the Chinese population controls probably over 50% of the Chinese total wealth, that’s a lot of money even if on a per capita basis the wealth is very low.

  7. restaurant employee

    @space889

    i guarantee you that your ratio is way off – my guess by the 8s in your name is a bit of internal bias – 10% of the population controls over 50% of the wealth? i guarantee it’s more like 1% own 90% of the wealth – that’s how north american oligarchs do it – come on you wussies.

    at least, that is the historical average in the western economies – i would assume less developed totalitarian states would have a healthy number of party appartchiks running the command economy rather than ubermensch entrepreneurs taking risks.

    and then hey, why not pop over to safe haven canada and flip a little RE, exploit their weak laws and simple greed with your slave labor money (that we gave them for crap we’ll be replacing soon) and you won’t have to worry what will happen to your family when the peasants get behind a new Mao with their pitchforks and torches and the nightmare that is chinese history will grind on through another upheaval – it’s just the natural course of events over there. a few decades of peaceful tyranny followed by crisis, inflation, civil war, famine, plague, etc. etc. 5000 years of history can’t be wrong! but then “this time is different” right??

    after 1979 when the shah was toppled in Iran thousands of his cronies and insiders fled to canada and the US, as the corrupt state they propped up could no longer guarantee their safety – the same will happen there, all in due time..

    and besides, the old 3 generation chinese curse is always in effect..all around the world it’s the same story, no matter which race – the rich offspring will usually squander it and if – in the case of canada – they’re even still in the country by then they’ll probably have developed some fondness for the place, rather than continuing maximizing their advantages at the expense of the quality of life for the rest of us, right? right?

    who do we vote for to fix this? oh right: no one. “it’s a free market” and some people are freer than others – especially when you’ve got 1000 non-unionized women workers in a factory screwing things together for pennies an hour back in your home country.

    i think it’s cute how rich chinese are as detached from the suffering of their lower classes as rich americans.

    whoever mentioned the potential that the canadian taxpayer will be footing the bill when the bubble pops is very astute.

    • “after 1979 when the shah was toppled in Iran thousands of his cronies and insiders fled to canada and the US…”…

      You forgot Ferdinand’s [Marcos] palz- quite a few of them ended up here. But, agreed – The Peacock Dynasty was assuredly in the ‘vanguard’…

      😉

  8. restaurant employee

    ah yes Esmelda Marcos and her 3000 pairs of shoes

    people power and pots and pans

    someone else with a memory! the point is, we bring a lot of unsavory types here. not just flotsam and riff raff but actual evil fuckers, we open the door and lay the red carpet down for them. fucking shameful and we’ll rue these easy policies one day.. yes, rue..

    my accountant and i were discussing the malaise and apathy and just general lack of a will to know what’s going on amongst vancouverites – bored, disinterested, or on the take – they don’t even want to know. are we just not importing the curious ones? do they still make that model over there?

    pick your lucky numbers, folks, – the exact same lucky numbers the other 1.5Billion have..

  9. 1920 SW Marine Dr
    In 1998, its A/P was $20M but was auctioned off at $4.2M.
    In 1999, it was sold for $5M.
    It was for sale again in 2007, asking $12M.
    In 2008, its A/P was $10.5M.
    Current A/P is $10.5M

    2011 BC Ass value: $3.339M + $8.384M = 11.723M
    The record shows current owner as Maria D. De Lando.

    The article writer does not know if it has been sold or not. However, such 20,000-sq-ft lot on the westside is sought after by buyers from China.

  10. What I’m really curious about is this statement: “I think that compared to other Canadian cities, Vancouver is expensive. But, China is more expensive [than Vancouver].”

    Can anyone provide insight or quantify this statement?

    • http://en.21cbh.com/HTML/2010-10-12/luxury-home-shanghai.html

      Luxury flats going for RMB 55K-70K /sqm = USD770-990 / sqft.

      The article cites a Coal Harbour luxury condo going for $1600 / sqft

      I suppose if you want a detached property a 10 minute drive from Shanghai’s downtown core you’re paying a bit more than $3MM. Maybe that’s what she meant.

      • restaurant employee

        the question is this:

        are there ANY detached properties a mere 10 minute drive from shanghai’s core?

        the entire idea of even having a lawn – has been an imperialist running dog/bourgeoise concept of space, status and owernship for centuries – everyone knows that. mao would be rolling in his grave. (though in a traditional chinese compound/house a ‘front yard’ would be walled in and used as a courtyard – in vancouver we get wrought iron and stone lions guarding the perimeter of every third yard)

        come on, comrades, get it together. a little ideological consistency, please..

      • “…an imperialist running dog/bourgeoise concept of space, status and owernship for centuries – everyone knows that. Mao would be rolling in his grave.”….

        That ain’t even the ‘half’ of it… 😉

        [UK Independent] – China cracks down on corrupt golfing cadres

        “…Among generations of people brought up on struggles against capitalist running dogs and landlords, there is a strong level of mistrust about the super rich in China, but the real ire among the local populace is reserved for corrupt officials. It has become a major political issue as the privileged official classes and a new generation of hyper-rich that has benefited from the booming Chinese economy… The latest target is golf. The sport, taken up with gusto by China’s new rich, has been the focus of a series of corruption inquiries. Twenty government officials in Wenzhou, an entrepreneurial city in Zhejiang province, were reprimanded this month after they were publicly linked to a high-end golf club that charged 398,000 yuan (£37,000) to join – 40 times the average annual income of farmers in Zhejiang.”…

        http://tinyurl.com/465tlwb

        I’ve just had an epiphany! It isn’t the environment, the scenery, the cost sq.ft., the time zone, cheap/accessible local politicians, lax development/regulatory regimes, or even YVR’s extant/’critical mass’ Chinese community/social infrastructure that’s bringing them to BC… They’re coming for the GOLF!…

      • restaurant employee

        well according to The Onion, it’s a 100 year colonization effort of the west coast of the US and Canada (with the exception of Oakland, of course – some of us might be aware of Chinese attitudes towards blacks.. i’ve seen it with my own two eyes and it’s not good – i saw a toothpaste in taiwan that had a minstrel on the tube! no joke – it even had some fucked up name)

        i have tried to find this onion article, it’s at least 5 years old, but its long gone, i think – too offensive? they rip on China as well as they rip on the US 😉 i love the chinese andy rooney videos..

        [couldn’t find it, either, but there is this: ‘China Stockpiling Massive Fireworks Arsenal’ -ed.]

        i don’t trust anyone without a well developed, fairly ironic sense of humor – apparently only 15% of people can actually understand irony – the humorless ones, they’re the ones that pull the trigger when they’re told to. it’s amazing how much influence over a society a state can have. i obviously have a lot more to say, but i’ll just leave it at that.

      • restaurant employee

        oh and i forgot to mention…

        mao doesn’t have a grave! hoho he’s embalmed! at what point in maybe 200 years .. will people look at this stuffed, dessicated corpse and finally realize “wow this is really fucking morbid” and just fire him out of one of those sewage pipes along the bund and then out to sea.

        we should have put our foot down with china after Tiannamen – we have instead had our Neville Chamberlain moment and we’ll reap the moral chickens whenever they come home to roost. and all we got were some cheap gadgets that might last 2 or 3 years.

    • restaurant employee

      it’s their way of saying that their real estate bubble is stupider and way more crazy than ours.

      • restaurant employee

        matt, i am already checking the book out on amazon – looks fascinating – thank you

        if i might suggest a book for you – “The Chinese Looking Glass” by Dennis Bloodworth

        written by a british expat to china who lived there for many years (i believe during the interwar period and on into the civil war and japanese occupation) and settled in singapore – what i thought was going to be another slog through the old rule britannia/white man’s burden bullshit was actually one of the most informative and humanist reads on china i’ve had. i couldn’t put it down – not a chronological history at all, but more what he refers to as examining the effluence at the end of a mighty river delta.

        another one i recommend is “A Memoir of China in Revolution” by Chester Ronning, a GREAT Canadian. little known, he was actually born in China in the 19th century to Norwegian (eventually canadian) Lutheran missionaries – expelled during the boxer rebellion – and returned to witness every subsequent revolution – he was Canada’s (and the west’s) FIRST diplomatic envoy to the PRC in 1972. (i may be off on the year) anyways, check it out, might be difficult to find.

      • Thanks Restaurant Employee. I’m going to add “looking glass” to my amazon wishlist. Are you familiar with Pearl S. Buck? Her life story is somewhat similar to Ronning’s but she wrote fiction and grew up in China during the 20th century.

  11. Thanks for the discussion, links and reading suggestions, All.

  12. restaurant employee:
    The toothpaste was called “Darkie”, it was very popular in HK when I lived there in the 80’s and 90’s.

    [A blog post on this here -ed.]

  13. restaurant employee

    westsider – THANK YOU – i thought it was blackface or something similarly derogatory. last time i saw as of 2006 it was still wildly popular.

    because you know, he’s so dark and his teeth are just so gleaming white!

    matt – i have not heard of pearl s. buck but i will check her out – i find the stories of ‘westerners’ (if anyone has read Said then this is a very vague phrase we’ve all incorporated into the lexicon) who grew up or lived/worked in exotic places in the 18th, 19th and early 20th centuries rewarding – it’s like the last phase of history before we opened the pandoras box and shat all over the planet.

    are we all bored of alice zhang, now? she was a bore anyhow..

  14. Re: 1920 SW Marine Drive, posted by 9 –

    This amazing property – built by the Reifel family in 1932 – is listed as Heritage A and therefore cannot (and should not) be torn down. For this reason alone, it will not be purchased by buyers from the PRC.

  15. “Mainland property developer, aka Beijing famous green building developer, aka modern energy-saving home builder
    – to enter the North American (UBC) market
    – to build a luxury low-rise multi-family housing development project
    – to invest about C$50M – $60M

    Their “modern energy-saving project manager”, Zhang Liang said their company has signed a contract with MAC Marketing Solutions who will be responsible for sales this coming September.
    http://preview.tinyurl.com/4uu63t6

    Is this Zhang Liang, the husba of Alice Zhang?

  16. restuarant unemployee

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