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unicas
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Chinese Charge Into Vancouver Market -wsj.com

Tue Jun 07, 2011 6:17 am

Economists See Froth in Home Prices, But They Are Still Cheaper Than in Shanghai; Crack House or Mansion?.
A fresh wave of Chinese buyers, coupled with Canada's already frothy home prices, has vaulted Vancouver into the ranks of the world's most unaffordable real-estate markets.

Bungalows—small, detached, single-story homes, some in need of significant repair—can command prices well above a million Canadian dollars (US$1.02 million.) One local website, crackhouseormansion.com, invites visitors to guess whether homes pictured on the site are property sold for more than C$1 million or are alleged crack houses.

The Canadian Real Estate Association says the average house price in Canada in April was C$372,544, up 8% from last year. In Vancouver, it was more than twice that, at C$815,252, up 21% from a year ago.

Demographia, a property-affordability survey published by Illinois-based consultant Wendell Cox, estimates that median real-estate prices in Vancouver are 9.5 times median household income. Only Hong Kong and Sydney are less affordable by that measure. (New York comes in at 5.1.)

The price rises are especially sharp in the high end of the market, with real-estate agents pointing to a flood of foreign buyers, particularly Chinese. Condominiums are popular, but so are single-family homes, including fixer-uppers that buyers eventually tear down. While there is some speculative buying, Canadian and Chinese agents say Chinese buyers are looking for longer-term investments to diversify their holdings outside of the mainland.

Sales of homes worth more than C$2 million soared by 118% in Vancouver in the first four months of this year, real-estate brokerage RE/MAX reported in May. The average price in the high-end segment now tops C$3 million.

View Full Image

Eric Christiansen

PRICEY IN ANY CURRENCY: This house in West Vancouver hit the seven-figure mark in Canadian dollars.
.Quantifying Chinese buying is difficult. Local authorities don't publish statistics on foreign ownership of residential property. Real-estate consultancy Landcor Data Corp. pored through sales data in two high-end Vancouver neighborhoods, looking for "pure" Chinese names—excluding Western first names or any "remotely non-Chinese" variants—in an attempt to get a sense of the scale of mainland buying. They found 74% of buyers of luxury homes in the areas last year fit the category.

Vancouver real-estate agents say Chinese buyers dominate the high end of the market, fanning demand and prices across the city. The strong demand for high-end homes has helped drive up prices for more modest houses. Some Vancouverites are selling their now richly valued homes and buying more-expensive ones, while new buyers are scrambling to buy before prices rise further, agents say.

"It creates this positive vibe, this dynamic to the market that is upbeat," says Elton Ash, vice president for western Canada at RE/MAX.

Canadian home prices have climbed steadily since the end of the economic and financial crisis, even as U.S. home prices resume their decline. Low interest rates have made borrowing easy, and the global commodities boom has fired up Canada's resource-rich economy. On Tuesday, the Bank of Canada kept its benchmark rate at 1%, though some expect the bank to raise rates by the end of the year, spurring some buyers to act before mortgage rates go up. Other markets, including Toronto and Montreal, have seen their own steady home-price increases, but nothing has approached the boom in Vancouver.

The boom has triggered a bit of a backlash. A former city councilor, Peter Ladner, in April caused a ruckus after he said Vancouver should study measures, which could include restricting both local and foreign real-estate purchases, to ease prices. "It's eroding business, the economy, because people can't afford to move here to take up jobs," he says. He recommends a study to quantify offshore buying as a first step.

The city always has been more expensive than most in Canada. Its location, sandwiched between the sea and the mountains, constrains the supply of available land. Vancouver also has long been near the top of global surveys in terms of quality of life. The 2010 Winter Olympics helped showcase the city to the world.

Several waves of Chinese have migrated to the city, beginning in the late 1800s, when Canada brought in workers to build the Canadian Pacific Railway. About 20% of the city is of ethnic Chinese origin now. That makes it a natural market for Chinese looking for overseas investments, amid Beijing's recent attempts to cool its own property market.

Eric Christiansen, a top real-estate agent for affluent West Vancouver, estimates that Chinese make up a small percentage of the total Vancouver market, but dominate the high-end sectors of the city.

.He has sold 60 houses in West Vancouver this year, compared with typical sales of 80 annually. Of those, five were for properties of more than C$5 million, three of which were purchased by Chinese buyers, he says. In West Vancouver as a whole, 16 homes sold for more than C$5 million this year, and 14 of those sales went to Chinese, he says.

Vancouver's soaring prices have gotten attention back in China, stoking fresh interest. Chinese buyers like Canada's relatively simple ownership rules, flexible immigration policies and its schools, according to Bunny Wang, director of international properties at Colliers International in Shanghai.

Some economists are starting to wave warning flags. Royal Bank of Canada says monthly carrying costs—mortgage payments, property taxes and utilities—for a detached bungalow represent 72% of the average Vancouver household income. That is more than double the 32% threshold that Canadian banks use to gauge whether a borrower can handle a loan.

"The prices appear disconnected to the level of activity and the balance of demand and supply," RBC economist Robert Hogue says.

http://online.wsj.com/article/SB3000142 ... 48928.html
 
tdma800
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Re: Chinese Charge Into Vancouver Market -wsj.com

Tue Jun 07, 2011 6:22 am

People like living here. There's lots of students from many different countries paying $33,000 a year to live here.(Tuition and Living costs for a common SFU Bachelors Degree)
 
vanreal
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Re: Chinese Charge Into Vancouver Market -wsj.com

Tue Jun 07, 2011 8:14 pm

Economists See Froth in Home Prices, But They Are Still Cheaper Than in Shanghai; Crack House or Mansion?.
A fresh wave of Chinese buyers, coupled with Canada's already frothy home prices, has vaulted Vancouver into the ranks of the world's most unaffordable real-estate markets.

Bungalows—small, detached, single-story homes, some in need of significant repair—can command prices well above a million Canadian dollars (US$1.02 million.) One local website, crackhouseormansion.com, invites visitors to guess whether homes pictured on the site are property sold for more than C$1 million or are alleged crack houses.

The Canadian Real Estate Association says the average house price in Canada in April was C$372,544, up 8% from last year. In Vancouver, it was more than twice that, at C$815,252, up 21% from a year ago.

Demographia, a property-affordability survey published by Illinois-based consultant Wendell Cox, estimates that median real-estate prices in Vancouver are 9.5 times median household income. Only Hong Kong and Sydney are less affordable by that measure. (New York comes in at 5.1.)l
I think you have to be careful when you compare cities because it isn't always apples to apples. I would like to see Vancouver compared to Manhattan vs. all of new york. You get the Bronx, Queens and Staten Island thrown in then
 
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Re: Chinese Charge Into Vancouver Market -wsj.com

Tue Jun 07, 2011 8:39 pm

Economists See Froth in Home Prices, But They Are Still Cheaper Than in Shanghai; Crack House or Mansion?.
A fresh wave of Chinese buyers, coupled with Canada's already frothy home prices, has vaulted Vancouver into the ranks of the world's most unaffordable real-estate markets.

Bungalows—small, detached, single-story homes, some in need of significant repair—can command prices well above a million Canadian dollars (US$1.02 million.) One local website, crackhouseormansion.com, invites visitors to guess whether homes pictured on the site are property sold for more than C$1 million or are alleged crack houses.

The Canadian Real Estate Association says the average house price in Canada in April was C$372,544, up 8% from last year. In Vancouver, it was more than twice that, at C$815,252, up 21% from a year ago.

Demographia, a property-affordability survey published by Illinois-based consultant Wendell Cox, estimates that median real-estate prices in Vancouver are 9.5 times median household income. Only Hong Kong and Sydney are less affordable by that measure. (New York comes in at 5.1.)l
I think you have to be careful when you compare cities because it isn't always apples to apples. I would like to see Vancouver compared to Manhattan vs. all of new york. You get the Bronx, Queens and Staten Island thrown in then
Agreed.

Oh, and BTW: if you restrict NYC to Manhattan then the "apples to apples" comparison is Yaletown/Coal Harbour/West Side of Vancouver...Now do the comparison on $/sqft.....You'll blow your mind...Also keep in mind that Manhattan has 10 times the population and WAY richer (that is billionaire city remember), higher incomes on about 1/4 the land of comparable Vancouver areas...But Vancouver prices are very close if not higher in some examples than Manhattan (see previous links, citations, news stories on other threads - do a search).
 
tdma800
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Re: Chinese Charge Into Vancouver Market -wsj.com

Tue Jun 07, 2011 9:12 pm

You could say London England is a nice place too. But would you want to live there?
 
vanpro
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Re: Chinese Charge Into Vancouver Market -wsj.com

Tue Jun 07, 2011 9:19 pm

You could say London England is a nice place too. But would you want to live there?
Apparently about 10M+/- people in NYC and another 12M to 14M+/- in (metro) London would disagree w/ you....
 
tdma800
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Re: Chinese Charge Into Vancouver Market -wsj.com

Wed Jun 08, 2011 6:49 am

You could say London England is a nice place too. But would you want to live there?
Apparently about 10M+/- people in NYC and another 12M to 14M+/- in (metro) London would disagree w/ you....
I wouldn't live there even if I could buy a 2 million pound place

i'd rather have something like the 2700 foot thing in killareny thats asking 1.5 right now.
 
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jesse1
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Re: Chinese Charge Into Vancouver Market -wsj.com

Wed Jun 08, 2011 9:22 am

if you restrict NYC to Manhattan then the "apples to apples" comparison is Yaletown/Coal Harbour/West Side of Vancouver
The fact that you guys need to compare Vancouver to somewheres like New York and San Fransisco when I all but guarantee you they will hear the word "Vancouver" maybe once a year, and probably only because of hockey, is telling.

The first rule of being "cool" is that if you compare yourself to other people as evidence you too are "cool", you aren't "cool".
The second rule of being "cool" is that if you're "cool" you don't need others to tell you you're "cool".
 
eyesthebye
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Re: Chinese Charge Into Vancouver Market -wsj.com

Wed Jun 08, 2011 10:06 am

if you restrict NYC to Manhattan then the "apples to apples" comparison is Yaletown/Coal Harbour/West Side of Vancouver
The fact that you guys need to compare Vancouver to somewheres like New York and San Fransisco when I all but guarantee you they will hear the word "Vancouver" maybe once a year, and probably only because of hockey, is telling.

The first rule of being "cool" is that if you compare yourself to other people as evidence you too are "cool", you aren't "cool".
The second rule of being "cool" is that if you're "cool" you don't need others to tell you you're "cool".
I mostly hear these comparisons from bears who think Vancouver should not be as high or higher than SF, or NY, or...

I personally don't think anywhere in the world compares to Vancouver - nothing is remotely close. You'd have to pay me a king's ransom to move from here, and I'd still be kicking and screaming
the cure for higher prices is moving to a destination with lower prices
 
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jesse1
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Re: Chinese Charge Into Vancouver Market -wsj.com

Wed Jun 08, 2011 11:42 am

ETB I don't know what Vancouver's worth but I don't think it's just "bears" comparing the size of their holdings to others, but it's a one-way street. New Yorkers aren't looking in awe at Vancouver and pining for its fjords. Even Mayor Gregor was getting in on the act.
 
eyesthebye
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Re: Chinese Charge Into Vancouver Market -wsj.com

Wed Jun 08, 2011 12:05 pm

ETB I don't know what Vancouver's worth but I don't think it's just "bears" comparing the size of their holdings to others, but it's a one-way street. New Yorkers aren't looking in awe at Vancouver and pining for its fjords. Even Mayor Gregor was getting in on the act.
most NYers have never been outside the State - little wonder they don't pine for anywhere that's beyond
the scope of their universe.
the cure for higher prices is moving to a destination with lower prices
 
westcoastfella
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Re: Chinese Charge Into Vancouver Market -wsj.com

Wed Jun 08, 2011 12:27 pm

most NYers have never been outside the State - little wonder they don't pine for anywhere that's beyond
the scope of their universe.
what are you talking about? How do you know where "most NYers" have been or not been?

NY is a city of immigrants, same as Vancouver - I would not be surprised if a number higher than the entire population of BC of NY'ers came from outside the state or country. Hell, an awful lot of NY'ers live outside of their state.
 
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Re: Chinese Charge Into Vancouver Market -wsj.com

Wed Jun 08, 2011 12:45 pm

most NYers have never been outside the State - little wonder they don't pine for anywhere that's beyond
the scope of their universe.
Not sure, but the people I know in new york do many things out of state like
- fly to Vancouver to watch canucks game for weekend
- fly to florida for weekend to play golf/relax (several times a year)
- drive to boston
- etc

the benefits of high salary and cheap RE
 
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Re: Chinese Charge Into Vancouver Market -wsj.com

Wed Jun 08, 2011 6:26 pm

most NYers have never been outside the State - little wonder they don't pine for anywhere that's beyond
the scope of their universe.
Projecting much?
 
vanreal
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Re: Chinese Charge Into Vancouver Market -wsj.com

Wed Jun 08, 2011 9:01 pm

most NYers have never been outside the State - little wonder they don't pine for anywhere that's beyond
the scope of their universe.
Not sure, but the people I know in new york do many things out of state like
- fly to Vancouver to watch canucks game for weekend
- fly to florida for weekend to play golf/relax (several times a year)
- drive to boston
- etc

the benefits of high salary and cheap RE
Where do you get that New York has cheap real estate. Have you ever watched the show Selling New York

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