Whether in the coffee shop or at the water cooler, there are three things that you can bet Vancouverites are talking about. And if it’s not the weather and hockey, it’s going to be real estate.
In the last five years, Canada’s real estate market has completely changed, reaching prices and demand like never before. Greater Vancouver and Greater Toronto have become the most active and expensive housing markets. With beautiful surroundings, a high standard of living, and limited land, plus a dropping dollar, foreign investors have flocked to the east and west coasts of the country, purchasing homes, condos, industrial, and commercial buildings. Bidding wars with no subjects have become the norm, with many sellers cashing in on their properties that they paid significantly less for only a few years beforehand.
According to MacLeans, inquiries on Juwai.com, an online listing service where Chinese buyers can look for international real estate, rose 143% in Ontario alone last year, with the total value of those homes hitting $11.2 billion. Chinese buyers shelled out nearly $12 billion in real estate in Vancouver, accounting for 33% of the city’s sales. For Toronto, it was $8.4 billion, representing 14% of total sales.
“I tell my clients not to invest in other markets. Only invest in Vancouver. Investing in the downtown core will give you higher equity, liquidity, and high yields,” said Kevin Meikle, Vice President, Executive Director, Investment Sales & Capital Market at Cushman & Wakefield. “We don’t have tertiary options like the States. For example, after the Big 5 [Chicago, New York, Los Angeles, San Francisco, Washington DC] you can invest in Austin or Seattle. Here we have Kelowna.”
Of course, it’s not just Chinese buyers that make up foreign ownership.
Ashley Powell, Senior Vice President, Head of Transactions, Western U.S. Bentall Kennedy U.S., shared that “Bentall Kennedy invests in urban areas that attract Millennials and talent. So yes, we’ll continue to invest in areas like this -- and this is Vancouver.”
As we shared in our last blog post, Premier Christy Clark has enacted the Foreign Buyers Tax in order to simmer the hot market and prevent more homes from sitting vacant. However, compared to cities like Calgary and Montreal, Toronto and Vancouver continue to attract much more attention than their neighbouring counterparts.
Do you foresee other Canadian cities that will become attractive to foreign buyers? Tweet @naiopvancouver and let us know!