A greater part of the purchases on luxury houses in Vancouver real estate market were mostly made up of Chinese investors. This subject has created quite a stir along the west coast. Pointing out that the dramatic climb on house prices in the real estate market has been caused by such outside influences.
The Globe and Mail shares the data given by MacDonald Realty Ltd., a prominent British Columbian real estate company with a track record of more than 70 years. According to the firm, about 70% of their high-end transactions of homes with a value over $3 million in 2014 were composed of Chinese buying Vancouver real estate.
With the issue of soaring overall home prices because of outside influence from foreign investors the firms' vice president, Dan Scarrow begs to disagree. Mr. Scarrow runs their office based in Shanghai. Dan says that Chinese home buyers in Vancouver indeed have created an impact on the prices of the housing market but only in the luxury department. When looking into the middle end for houses priced between $1 million to $3 million Chinese buyers were at 21% last year. As for the lower market where house prices were at less than $1 million buyers from mainland china were only at 11%.
The average cost of a single detached house in Vancouver has gone up to $2.23 million. The participation of the Chinese buying up Vancouver does not affect the real estate market as a whole. The lack of supply and low interest rates has affected those only in the entry level.
CBC gives a more elaborate detail on Scarrow's point of view on Chinese buyers Vancouver real estate market. Dan also happens to be a second generation Chinese-Canadian. The MacDonald Realty Shanghai office opened last February and Mr. Scarrow primarily targets Chinese investors. He says that the plunge of the Canadian dollar has empowered the purchasing capability of Chinese Yuan by 25% in the last 6 months to a year.
Dan Scarrow adds that the Chinese Yuan not just dominates the Canadian dollar at this point but almost all currencies except for the US dollar. This has created a lot more investment opportunities across the globe including Sydney and Melbourne. Even the real estate markets in Australia and Europe have felt the impact on the investments made from Chinese investors from mainland China. Contradictory to what is locally perceived as very pricey market globally it is seen as very competitive one for foreign investors in comparison to other targeted global cities.
Chinese investors have indeed been affecting the real estate house prices in Vancouver but only on the luxury market. Overall, foreign purchases from mainland China on the middle and lower class sections wasn't enough to have any impact on the prices of the houses. Lack of supply and low interest rates are said to be the culprit for the drastic increase in prices of real estate properties in Vancouver.
