BUYERS FROM CHINA DOMINATE HIGH-END SALES
REAL ESTATE: Stats show wealthy investors from China dominate high-end sales
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.