Vancouverites have long complained that wealthy real estate speculators from Hong Kong and mainland China have driven up housing prices in the city, but exactly how much of Vancouver is foreign-owned is hard to assess since the industry doesn’t keep such data and many foreign investors use local proxies to make purchases.
This month, a three-bedroom bungalow, circa the 1960s and without much updating, sold for $421,800 over the asking price, creating a buzz among agents and other buyers. The winning bid of $1,180,800 came from a university student whose parents live in China.
“The initial response was quite vociferous,” said Michael Adelson, a Re/Max agent who represented the seller and received several phone calls about the deal after it was done.
“There’s a lot of anger among Canadians who earn money here that they’ve been priced out of the market. There is some degree of anxiety about how people are going to compete with these hyper-inflated prices.”
An instructor at George Brown College in Toronto has seen an explosion in the number of foreign students.”When their parents come to visit, they get an idea of what real estate costs here, and they can’t believe how cheap it is. They want to buy because they think it’s a bargain.”
In addition to China, investors pouring money into real estate are flocking to Canada from the Middle East, Korea, Russia, India and the Philippines as well, said Tony Ma, who owns HomeLife Landmark Realty in Markham.
About 65 per cent of Ma’s agents are Chinese and the bulk of his business comes from Chinese clients. Most are new immigrants to Canada, but about 20 per cent are foreign investors, including parents overseas who buy on behalf of their children studying in this country.
Last year, buoyed by his strong ties to the mainland China market, Ma’s agency sold 263 homes priced at more than $1 million, with about 40 per cent of those being all-cash deals with no conditions attached.