Vancouver attracts only 15% of new immigrants to Canada, but it attracts a full half of the 10,000 very wealth immigrants who come. It is a lifestyle destination, not an industrious destination.
Is Vancouver in a Real Estate Bubble?
Lui explains why she’s so confident the home will sell: “It will appeal to a buyer from China.
Now long-term Vancouverites and incoming Chinese are seeking almost exactly the same thing—except, Lui says with a laugh, “we can’t afford it.”
True. When Lui says “we,” she’s talking about the locals, people who make their living in Vancouver.
If “buyers from China” answers the “who” question about Vancouver’s unique real-estate market, the follow-up question—“Where is this leading?”—is harder to answer. The torrid affair between eastern Asia and Vancouver real estate, now in its third decade, is actually a love triangle from which each party derives very different things. When wealthy Chinese immigrants buy property in Vancouver—and they utterly dominate the top end of the market—they’re actually buying a form of insurance.
And the kicker:
The buyer will likely be from China as well: Lui estimates that up to 80% of recent sales in this price range have been going to buyers from mainland China.
So, you have a situation where the prices have moved beyond the range of the locals. They are set by immigrants and foreigners instead. And should the immigration and foreign investment dry up, what does the market price revert to? Note that in this scenario, housing itself as an economic engine (1/5 of the country's GDP) also dries up, leaving the locals a bit poorer yet.