Main Article (Argument)
According to Richard Kurland, an immigration lawyer who works with wealthy investors from mainland China, has looked at 2014 July real estate figures and suggests they may offer a glimpse at an important shift in Vancouver’s housing market. “I suspect that you will see a cascade of lower prices, down the value chain of Vancouver-based real estate,” he states in an article by The Globe and Mail.
Mr. Kurland’s hunch is that some are beginning to sell off property because smart offshore money is beginning to head elsewhere. He claims that Canada is becoming less of a welcome destination for global capital. In its last budget, the federal government cancelled the immigrant investor program, which had been inundated with wealthy applicants from mainland China. Some, including Ian Young, thought that this decision would hit the real estate market in Vancouver.
At the same time, Mr. Kurland adds, there is a serious corruption crackdown in China, as well as signs that Canada and China will upgrade a tax treaty in the fall. The treaty meant more information-sharing between Canadian and Chinese tax officials. “Those things taken together, I think, are forcing the rich to dispose of high end Canadian residential property,” Mr. Kurland says.
In a similar article by The Province, statistics by the Real Estate Board of Greater Vancouver show that the sales of detached homes in Vancouver’s westside had dropped over 14% from 2014 February to March, making it the most volatile month in the three years of price swings. “The fear among Chinese realtors is that people will just liquidate their assets,” Ian Young, the former international editor of the South China Morning Post, states. “Last year one of the top real estate agents in the city, who is Chinese, told me when this program ends she won’t be selling homes in Vancouver anymore.” So how does a 14% decrease in sales convert into price? According to Jackie Chan, an agent from Dexter Associates, the end of the Immigrant Investor Program will cool sales at the higher-end of the Vancouver market by around $7 million Moreover, according to an article by REW.ca the author claims that the cancellation of the controversial investor “visa scheme” will be the first step in restricting real estate speculation by foreign investors.
Ian Young concludes by saying that he “doesn’t think the people from Vancouver really understand the fact that Vancouver had become the absolute world favorite destination for millionaire migrants.” He further says that he’s surprised that Canadians seem uncomfortable discussing the impact of foreign investment in Vancouver, and points out that Chinese investment is the obvious connection between Hong Kong and Vancouver, two of the world’s least affordable real estate markets.