Chinese economy drives Vancouver housing market! But for how long?

[Anonymous]

The growth in Chinese GDP is significantly linked with the Canadian (and Vancouver in particular) housing market. Growth in China determines growth in Vancouver housing. But with China in the biggest property bubble the world has ever seen--entire cities empty, because of excessive over-supply, we can certainly expect that when the Chinese property bubble pops, Vancouver will follow in tandem. It hasn't been shown that overseas Chinese investors are responsible for the Vancouver property bubble, but definitely growth in the Chinese economy spills over into the Vancouver real estate market, as Chinese immigrants make up the majority of our population. Combined with low interest rates, and a socialized mortgage market, Vancouver has been pushed into one of the largest housing bubbles in the world!

 

[Thomas Beyer]

Enough of this sensational hogwash to drive traffic to your blog.




Vancouver is expensive, has always been expensive, and will always be expensive because of geography, international appeal, in-migration, beaches, Whistler, islands, mountains, ocean, skiing, operas, harbors, trade, shopping, schools and international trade hub.




China will be around & growing for decades, and then there is also India and Korea and other smaller Asian nations like Vietnam who have huge population presence in Vancouver, all of which are growing economies.




Further: the average price per sq ft in Vancouver has not fallen over the years, so a flat market means actually an increase in prices per sq ft as condos get smaller and smaller. They are also not making any more land in Vancouver, so land prices, which dictate single family house prices, will always be elevated.




They expect anther million people in MetroVancouver the next 20 years. Prices will continue to climb, albeit modestly, say 2-4% a year, some areas more, some less.




You want cheaper real estate: plenty of choices in BC .. outside of Vancouver as this province is over a million sq km.

 

[angelapeng]

As an immigrant from China (born and raised in Shanghai, educated and worked in Beijing) living in Vancouver for 13 years, I have been doing business with China for years, mainly helping Canadian companies raising capital from Asia market. This summer, I have been meeting groups of Chinese friends (university classmates, business associates and potential investors) coming to Vancouver. Some of them are interested in purchasing properties purely as vacation homes, some of them are for investment purposes, the rest are for their childrent to go to school etc. The following are the common thoughts of these high net worth people:



--They all agree that the price of the Vancouver properties is way cheaper than those in China considering the quality of the properties. In big cities like Beijing, Shanghai and Shenzhen, properties priced at C$1million are ordinary properties. There are no empty buildings in those cities. Yes, there are some empty buildings/communities in some cities, but they are second or third tier cities. The combined population in Shanghai and Beijing alone is more than the population in Canada, China is going through the modern urbanization.



--Since the new policy that one household only can have two properties in China were launched, many people including the middle-class Chinese people are looking for ways to invest offshore. Money needs to flow. The mortgage rate in China is 7-8%,double the rate here in Canada. Our flexible lending policy to offshore investors (35% downpayment) makes Canadian rental properties very attractive to the Chinese buyers, even though many invest in cash.



--Yes, the GDP is slowing down in China, however, it will not have any impact to those who are planning to immigrate or invest in Canada, because those who are coming are still small percentage of the total population of China. Yes, this small percentage people are strong in capital investment, they have no signs of slowing down.



I have joint venture partners from China, I talk to them on daily basis, I write blogs in Chinese to the Chinese communities both in China and outside China, the market feedback is they are very interested in the Vancouver market, they are coming and investing.



Angela