REAL ES­TATE: Stats show wealthy in­vestors from China dom­i­nate high-end sales

The Province - - Front Page - SAM COOPER THE PROVINCE [email protected]­p­ twit­­er­cooper

China’s ul­tra­rich fam­i­lies — in­clud­ing peo­ple like China’s rich­est man, Jack Ma — are in­creas­ingly dom­i­nat­ing Van­cou­ver’s sin­gle-fam­ily home mar­ket in a trend that is just be­gin­ning to ac­cel­er­ate.

That’s ac­cord­ing to Mac­Don­ald Realty ex­ec­u­tive Dan Scar­row, who mar­kets Van­cou­ver prop­erty to Chi­nese in­vestors from his of­fice in Shang­hai. Scar­row, who spoke Tues­day to a con­fer­ence of fi­nan­cial an­a­lysts in Van­cou­ver, said that on-the-ground stats point to an emerg­ing “new nor­mal” in which in­vestors from Main­land China will be the only buy­ers of sin­gle-fam­ily homes in large swaths of Van­cou­ver.

Scar­row’s pre­sen­ta­tion was aimed at the con­tentious de­bate over how much im­pact Chi­nese money has on Van­cou­ver prop­erty, and whether for­eign in­vest­ment should be lim­ited.

Scar­row said in the ab­sence of gov­ern­ment sta­tis­tics on the ori­gin of Van­cou­ver home­buy­ers, in­ter­nal sta­tis­tics from Mac­Don­ald Realty are a good in­di­ca­tion of the mar­ket’s re­al­ity.

In 2014, Mac­Don­ald Realty of­fices sold 1,500 homes in Van­cou­ver. Among homes that sold for $3-mil­lion or more, 70 per cent went to Main­land China buy­ers. In homes priced be­tween $1 and $3-mil­lion, 21 per cent went to Main­land China buy­ers.

In prop­er­ties cost­ing un­der $1-mil­lion, 11 per cent of buy­ers were from Main­land China.

“Sin­gle fam­ily homes in Van­cou­ver are now a lux­ury prod­uct, where the buyer is from Main­land China,” Scar­row said. “I think this is ac­cel­er­at­ing and we are just at the be­gin­ning. It is be­ing pushed by the Chi­nese gov­ern­ment.”

Scar­row said the Chi­nese gov­ern­ment’s in­creas­ing tax col­lec­tion ef­fort is one fac­tor caus­ing wealthy fam­i­lies to spread as­sets abroad. Van­cou­ver’s safety, schools and cli­mate at­tract Chi­nese in­vestors, he said. Also, his­tor­i­cally low in­ter­est rates, Van­cou­ver’s com­pa­ra­bly low prop­erty tax rate, and the Cana­dian dol­lar’s de­pre­ci­a­tion are fac­tors.

“How can a coun­try of 1.4 bil­lion not im­pact our mar­ket, when so many of them want to come over?” Scar­row said. “Al­most ev­ery­one in China knows about Van­cou­ver. I was rid­ing with a cab driver in Shang­hai and he was telling me lot prices in South Granville. And he was right.”

Scar­row said the de­bate over whether Cana­dian gov­ern­ments should limit for­eign in­vest­ment misses the point, be­cause many Chi­nese in­vestors have some form of Cana­dian sta­tus.

As an ex­am­ple of the grow­ing num­ber of su­per-rich in­vestors that work in China while es­tab­lish­ing roots in Van­cou­ver, Scar­row pointed to Jack Ma, the CEO of tech re­tailer Alibaba. Scar­row said Ma — who has an es­ti­mated for­tune of about $25-bil­lion — has a home in Van­cou­ver and a son board­ing at St. Ge­orge’s School, and has even mused about lo­cat­ing an Alibaba of­fice in Van­cou­ver.

Scar­row said that while there has been much pub­lic­ity about the Chi­nese state’s ag­gres­sive anti-cor­rup­tion drive, it doesn’t seem to be ef­fec­tive.

“It prob­a­bly in­creases the de­sire to get money out of China,” Scar­row said. “Ev­ery­one feels un­safe, that they have a friend that will snitch on them, and all their wealth will be taken.”


In­vest­ment ex­pert Dan Scar­row says Main­land Chi­nese bought 70 per cent of homes that were sold for $3 mil­lion or more by Mac­Don­ald Realty in Van­cou­ver in 2014.

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