Foreign buyers not swayed by 15-per-cent housing tax, data show | The Globe and Mail

Condos in the Gilmore area of Burnaby are seen in the distance behind houses in east Vancouver, B.C., on Sunday September 20, 2015.

The proportion of foreign buyers in the Vancouver region is at its highest level since the province’s 15-per-cent tax on these purchasers came into effect a year ago, with experts and industry insiders saying international interest is strong in the surging condo market and the suburbs of Burnaby, Richmond and Surrey.

Provincial government data released on Tuesday show foreign buyers accounted for 5 per cent of homes bought in Metro Vancouver in September, with Richmond and Burnaby showing the highest levels, at 10.8 per cent and 9.6 per cent respectively. In Surrey, the city in the region where the most properties changed hands, the rate of foreign buyers more than tripled from August to September – jumping from 1.7 per cent to 5.9 per cent.

Although it is too early to say whether the September data represent a new baseline for the level of foreign buyers in the region, industry insiders and academics say these numbers are likely related to the region’s surging condo prices, which are driving Greater Vancouver’s real estate market in the wake of slowing sales in the once-mighty segment of detached houses.

[Read more…]

The Impact of Asian Investors in Vancouver | Globe and Mail & BNN

Macdonald Realty is mentioned several times in a Globe and Mail article published this morning on the impact of Asian investors on the Vancouver housing market.  See a repost of the full report below including comments from Dan Scarrow, VP of Corporate Strategy for Macdonald Real Estate Group.

Infographic_-_The_China_Factor_in_Vancouver_Real_Estate

 

This Globe and Mail article lead to a mid-day live TV interview on the Business News Network, featuring Tony Letvinchuk, the managing director of Macdonald Commercial Real Estate ServicesClick here to watch the interview.

 

Vancouver housing data reveal Chinese connection

One of the largest real estate companies in British Columbia says that more than one-third of all the single-family detached homes it sold last year went to people with ties to mainland China.

Macdonald Realty Ltd., which has over 1,000 agents and staff in B.C., said 33.5 per cent of the 531 single family homes sold by its Vancouver offices in 2013 went to people who the company said were a mix of recent immigrants and Canadian citizens.

Those buyers, the company added, tended to spend more money, too, with the average cost of a house sold to these clients topping $2-million, compared to $1.4-million on average overall.

The figures did not include Macdonald’s sales in suburban areas such as Richmond, Burnaby or North Vancouver.

“This is our snapshot of Vancouver,” says Dan Scarrow, vice-president of corporate strategy at Macdonald Realty.

The information is based on reports from the firm’s sales, anecdotes from its agents and Mr. Scarrow’s own experience working with mainland Chinese clients, and it’s a glimpse into the influence of mainland Chinese money on Vancouver’s real estate market, which is considered among the most expensive in North America.

Vancouver has been flooded in recent years by tens of thousands of investor-class immigrants from mainland China, who have seen the west coast city as a stable – and picturesque – place to park their capital in luxury property.

That has helped drive up the average price of a single-family home in Vancouver to around $1.2-million.

Mr. Scarrow, who noted the firm does not query buyers about immigration status, believes that investment flowing from mainland China into Vancouver real estate is a quantifiable phenomenon, but has not personally seen much of the more controversial type of buyer: Those from abroad who buy for investment purposes but never live in the city. “We still see very few pure investors from China who have no connection to Vancouver,” he says.

Getting a handle on foreign buyers is difficult and Macdonald’s survey is far from exact – though one major property developer in Richmond said “that sounds about right.” The federal government does not collect meaningful data on the number of foreign buyers purchasing Canadian real estate, leaving industry participants to debate the impact of foreign capital on the local market. And that debate has gotten heated recently, with some developers accusing others of racism and criticizing those who want to slap curbs on foreign investment. The issue is complicated by the fact that some of Vancouver’s ethnically Chinese-Canadian citizens with ties to Hong Kong view newer immigrants from mainland China with a degree of suspicion, assuming their wealth might have been accumulated in part by proximity to China’s Communist Party, rather than in a free market with the rule of law like Hong Kong.

The lack of hard data has also complicated discussions about the city’s affordability crisis and fuelled a local cottage industry where analysts attempt to decipher the scope of foreign money by looking at things like electricity usage in downtown neighbourhoods where some suspect foreign buyers have bought condos in which they never live.

“People always say there are no stats. Well, here are the stats,” says Mr. Scarrow. “This is actual evidence.”

There have been some reports and statistics about the scale of foreign money in Vancouver real estate before, but few have been conclusive – and none have settled the debate. One Sotheby’s report based on a survey of its agents found that 40 per cent of the luxury properties it sold in Vancouver were to foreign buyers – but not all of them were from China. Many developers trying to downplay fears about Chinese investment cite a statistic showing that only 1 to 3 per cent of Vancouver real estate purchases are “foreign” buyers – but, as is the case with Macdonald’s sales, many more expensive homes are still sold to people based here but who have come, at some point, from mainland China. A 2011 study by Landcor Data showed that 74 per cent of luxury purchases in Richmond and Vancouver’s expensive west side were by buyers with mainland Chinese names.

Mr. Scarrow says his company is “indicative of the overall market,” since his firm has some real estate agents who target overseas Chinese buyers, but is also firmly oriented toward domestic sales, unlike other real estate firms that deliberately target Chinese buyers.

At the same time, Mr. Scarrow and Macdonald are so bullish on the potential for Chinese investment that he is spearheading the company’s efforts to open an office in China. “While there is very little data about foreign investors in Vancouver real estate, our own internal data is enough for us to commit to investing in a representative office in Shanghai,” said Mr. Scarrow, whose mother Lynn Hsu, who came from Taiwan in 1979, is the majority owner and president of Macdonald.

Others remain unconvinced – not about whether there is an influx of Chinese money, but whether the flow of foreign capital will continue unabated.

Richard Kurland, a Vancouver immigration lawyer who works with wealthy Chinese immigrants, believes Vancouver may see a slowdown in foreign investment. He said some wealthy Chinese buyers might get anxious and sell off second properties because of the current crackdown on corruption in China.

In meetings with top real estate agents earlier this year, Mr. Kurland predicted that luxury residential real estate could drop in value by as much as 25 per cent as foreign investment dips. As evidence, he points to July real estate figures that showed 106 homes for sale on the west side in the $3-million to $3.5-million price bracket, and just nine sales, compared to 73 active listings and seven sales during July of 2013.

Originally published by The Globe and Mail on Friday, August 22, 2014.  Written by IAIN MARLOW.

Macdonald Realty looks for luxury buyers in China | The Globe and Mail

Sales of high-end properties are on the upswing in the Vancouver region, spurring one of British Columbia’s leading real estate firms to search for wealthy buyers by setting up shop in China.

Dan Scarrow, vice-president of corporate strategy at Macdonald Realty Ltd., said he has heard enough anecdotal evidence of well-heeled home buyers with roots in China to make it worthwhile to invest in a Shanghai office.

In February, Mr. Scarrow will start the first of two three-month assignments in 2014 in Shanghai. After his fact-finding mission, he plans to hire Mandarin-speaking staff in China to keep the overseas branch office going.

While real estate experts have estimated the proportion of foreign buyers in the Vancouver region’s housing market at only 1 to 3 per cent, Mr. Scarrow said if the statistics were to include recent immigrants with origins in China, the influence of rich Chinese buyers would be greater, especially on single-family detached homes in pockets of Vancouver’s West Side.

Most high-end transactions occur on Vancouver’s West Side and the Municipality of West Vancouver. In the luxury market, there were 644 properties that sold for $3-million or higher in the Vancouver area last year, up 47 per cent from 439 homes that traded hands in 2012, according to data compiled by Macdonald Realty. Of homes that sold last year, there were 148 that fetched at least $5-million, compared with 107 sales in that category in 2012.

Mr. Scarrow said it is hard to determine how many of those elite sales went to recent immigrants from China, noting that the ripple effect due to an influx of new money can easily be exaggerated. Still, he believes the proportion was significantly higher than 3 per cent last year.

“There isn’t this wave of offshore investors with no ties to Canada who are coming in to buy, but the genesis of their wealth is from mainland China,” said Mr. Scarrow, a Canadian who speaks Mandarin fluently. “Most of these people land in Canada first as investor-class immigrants.”

He dismisses tales circulating of wealthy offshore buyers snapping up Vancouver properties sight unseen as false, emphasizing that he will instead seek to nurture a market in which China-Canada family ties are crucial.

The 30-year-old Mr. Scarrow said that as a product of a mixed-race marriage, he is acutely aware that the issue of foreign shoppers is a sensitive one in British Columbia. “The perception among some sellers is that mainland Chinese money is driving the luxury real estate market here,” he said.

But Mr. Scarrow cautions homeowners against hiring real estate agents based only on ethnicity, stressing that the best representatives know Vancouver’s neighbourhoods well, no matter what their race.

Mr. Scarrow’s mother, Lynn Hsu, moved in 1979 from Taiwan to Vancouver. Ms. Hsu is the president and majority owner of Macdonald Realty, which has more than 1,000 real estate agents and staff across British Columbia. Her ex-husband, Peter Scarrow, is a lawyer who has worked in Asia for the past dozen years, including advising wealthy Chinese on Canadian immigration and tax rules.

Dan Scarrow said there will be opportunities to tap into the Chinese market during his stay in Shanghai. Besides seeking contacts who are interested in single-family residential properties, he will be on the lookout for investors in Vancouver’s commercial real estate market and also new condo projects.

Benchmark index prices, which strip out the most expensive properties, have jumped 17.3 per cent to $2.1-million for single-family detached houses over the past three years on the city’s West Side, according to the Real Estate Board of Greater Vancouver. By contrast, West Side prices have risen only 4 per cent for townhouses and 3.5 per cent for condos over the same period.

This article was originally posted on The Globe and Mail, Jan 19, 2014.  Written by Brent Jang.

housing-vancouver-smallhole__normal

The Price of Paradise Vancouver Real Estate | Report on Business with Lynn Hsu & Manyee Lui

The house Manyee Lui is showing today is listed at $2.2 million. Although the lot is only 33 feet wide and the house is nothing more than a blandly handsome two-storey, Lui expects it to sell quickly, even though the market’s turned a little tepid. With 2,900 square feet, the place is big enough for four bedrooms and an additional self-contained suite. All things considered, she says, “It’s not so expensive.”  Lui is simply telling it like it is: This house in the Dunbar neighbourhood may not be anyone’s idea of a dream home, but it delivers respectable accommodation for a reasonable price, at least by the standards of Vancouver’s west side. With a standard city lot trading hands for around $1.4 million and construction costs running at least $200 a square foot, it doesn’t take much of a house to hit the $2-million mark. And this summer and fall, as real estate markets wilted in most of the country, vertigo-inducing prices for properties on Vancouver’s west side held steady or even edged a little higher.

The question a lot of people were asking is, Who on Earth is buying them?

Lui explains why she’s so confident the home will sell: “It will appeal to a buyer from China.” She allows there was a time when Chinese buyers’ architectural preferences differed significantly from the local norm, but over the last 10 years their tastes have widened and become more westernized. 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. Now that the forestry industry has been eclipsed and the place has a median household income that is only average by Canadian standards, Vancouver is a city with no visible means of support. The affordability ratio has rocketed upward so quickly that it is now the steepest on the continent: more than double the Canadian average and more onerous than in places like New York and San Francisco. No wonder Vancouver is at the top of the media’s suddenly urgent bubble watch, not just in Canada but also in the United States; outlets ranging from Reuters to Businessweek have reported on a housing market they suspect is ripe for the kind of downfall the Americans are only too familiar with.

 

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. What the federal and provincial governments get out of these newly minted Canadians turns out to be a modern form of the infamous head tax that was imposed on Chinese migrants in the 19th century. And what Vancouver gets is an economy that boasts a lot of froth, and not much substance. From all three angles, it feels like a relationship that is built not so much on Commitment as on enjoying the good times while they last.

In 2003, renowned Vancouver architect Bing Thom remarked that his city was becoming “the Switzerland of the Pacific.” The Hong Kong-born Thom was referring to the way the city offered a safe and comfortable harbour to elites from around the Pacific Rim in search of fresh air, good schools and geopolitical peace of mind. About the same time, Andrea Eng heard a Korean billionaire refer to the city as “the Geneva of the Pacific.” Eng, who has spent most of the past two decades brokering deals on both sides of the Pacific for Li Ka-Shing-the world’s wealthiest Chinese businessman-picked up on the phrase and began to use it on her website. By 2009, the concept had received academic validation, after University of British Columbia historian Henry Yu invoked it in a journal article about the network of Asian-born and -descended Canadians who link this country to the world’s newly dominant economic zone-a place that will increasingly determine Canada’s own prosperity. “Vancouver, in particular, is an incredibly sought-after location,” he says.

Yu is careful to add a caveat, though. Vancouver is popular as a lifestyle destination for those who can afford it-not as a place to make a living. More ambitious immigrants, Asian and otherwise, are more likely to choose Toronto. In fact, British Columbia (which essentially means Greater Vancouver) receives about 15% of all Canadian immigrants, which, given its population, is only slightly more than its proportional share. On the other hand, it gets about half of the annual 10,000 or so people who can prove they are already wealthy and therefore eligible for easier, if more expensive, rides in the entrepreneur and investor classes. And the rest of Vancouver’s 15% share fits a distinctly different profile than do immigrants to places like Toronto and Montreal: more skilled and better educated, and much less likely to arrive as refugees.

A couple of kilometres east of Dunbar, in the old-money Shaughnessy neighbourhood, Lui is showing another home-a 1920 Georgian listed at a hair under $5 million. Here the seller is an immigrant from China who’s building a larger home. 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.

Moving a little downmarket, the proportions are lower but still significant. At Wesbrook, a high-rise development on the University of British Columbia campus where units typically run $1.5 million to $2 million, some 40% to 50% of buyers are from mainland China, according to George Wong of Magnum Projects, which markets condos for Wesbrook’s builder, Aspac Developments. Another 30% of units go to longer-term Canadians of Chinese descent. Across the Fraser River in Richmond, at a massive new development called River Green (average condo price: $930,000), the proportions are roughly the same.

UBC geographer David Ley has attempted to address the question of “Who’s buying these places?” in a different way, checking sales data for Vancouver neighbourhoods against variables like interest rates, unemployment levels and house construction-none of which correlated well. Instead, the strongest indicators of price movement were related to international investment and immigration. The arrival of other Canadians from elsewhere in the country actually dampened prices. The same effect showed up when Ley widened his lens to Greater Vancouver: The highest values occurred in areas with high immigrant populations and a predominant Chinese ethnicity. So Vancouver may be the first North American city where the phrase “there goes the neighbourhood” should be uttered when a Caucasian moves in next door.

The data used in Ley’s study are more than a decade old, but the same conclusion springs from the relationship between Vancouver’s west side-home to neighbourhoods like Dunbar and Shaughnessy, as well as the downtown peninsula-and the City of West Vancouver, which is just across the Lions Gate Bridge and boasts a beautiful mountainside setting right on the ocean. The two areas have always contained the region’s highest-priced real estate, with West Vancouver’s bigger houses on bigger lots historically 10% or 20% more expensive. However, West Vancouver is less appealing to Chinese immigrants and, at least partly as a consequence, homes on the west side of Vancouver proper have been appreciating much more quickly-by 66% in the last five years compared to West Vancouver’s 23%, according to the Real Estate Board of Greater Vancouver’s benchmark index.

Price increases of that sort are irresistible to smaller-scale residential renovators and developers, who have been transforming the west side and other Asian-preferred areas such as Vancouver’s east side and suburban Richmond at breakneck speed. On some blocks in Dunbar, virtually the entire stock of mid-sized homes from the 1920s through to the 1950s has been replaced by 3,500- and 4,000-square-foot open-plan designs with exteriors dressed up to look like bank managers’ manses from the turn of the 20th century. Houses like these, which executives or energy traders might pay $1.5 million for in Toronto or Calgary, and engineers and educators might pick up for $800,000 or $900,000 in Winnipeg, sell for $2.5 million to $3 million each.

Back in the late 1980s, before Tiananmen Square kicked off the great Vancouver land rush, it would have taken a particularly prescient forecaster to pluck Dunbar from among the west side’s also-ran neighbourhoods and anoint it as a contender. The area is largely deficient in the mountain and ocean views that can add several hundred thousand dollars-millions at the high end-to the value of a home. But it does benefit from another feature that most Asian immigrants view as more important: its proximity to the region’s best schools. UBC is handy, several of Vancouver’s best private schools are located in the area, and even its public schools score near the top of the Fraser Institute’s annual ranking of B.C. schools.

A common scenario for an investor immigrant from mainland China unfolds like this, explains immigration lawyer Steven Meurrens: One member of the household qualifies under a category of the Business Immigration Program and posts a $120,000 bond in lieu of making the $400,000 investment stipulated under the program. (Some qualify instead as “provincial nominees,” and follow a somewhat different scenario involving an actual investment.) Portions of the money are divvied out to various immigration advisers and service providers, while the interest accrues to the federal government, which in turn spreads it around to provincial governments-about a half billion dollars annually of late. Essentially, the money is treated as the cost of Canadian entry-although in a further wrinkle, many breadwinners never move to Canada, instead retaining their offshore jobs or businesses as well as Chinese citizenship, to maintain their income stream and taxpayer status in China, which helps shelter income from higher Canadian taxes.

Researching places to live in Vancouver is simple enough: There’s a vast network of expats to survey, and Chinese-based websites discuss favoured neighbourhoods in considerable detail, with special attention paid to schools. Typically, one of the parents, usually the wife, moves to Canada with the children while the husband stays in Asia, coming for visits when he can.

This arrangement is a rational response to the reception immigrants typically receive: High-status entrepreneurs or executives back home, they are rarely given an opportunity to duplicate that success here, and instead are often relegated to work in retail, in restaurants or even delivering newspapers. The syndrome was outlined in a 2007 Statistics Canada report indicating that new immigrants’ incomes have recently been dropping compared to previous eras. “There was unanimous sentiment among all respondents that economic success in Canada, even limited success, was extremely difficult to achieve,” confirmed UBC’s David Ley, after conducting dozens of interviews and focus groups for his 2010 book on Vancouver’s Chinese phenomenon, Migrant Millionaires.

The children, meanwhile, are enrolled in private or public schools, quickly picking up English-complete with the Canadian accent, which is preferred to British- or Australian-sounding speech or regional American accents. When they have graduated from high school or, more likely, university, the sons and daughters may return to Asia to take over the family business from their father. At that point, the couple may retire to Vancouver-a place that women in particular grow to appreciate-or the entire family may return to Asia, ending the cycle, which, as Ley points out, could more accurately be termed one of “migration” rather than “immigration.”

The scenario is a generalization, of course, and every story is different. Take the experience of Fang Chen. A litigation lawyer back in China, Chen arrived two years ago, while her husband stayed behind to manage a successful business, visiting when he can. Their son, now 6, arrived in Canada to start school this year. Chen is boning up on the Canadian legal system, but has no plans to join the bar here, because, she says, “it would be almost impossible for me to break in.”

The couple bought a house in Port Coquitlam, a middle-income bedroom suburb nearly an hour’s drive east of central Vancouver. To the free-thinking Chen, the place holds an advantage: The proportion of Chinese is among the lowest in Greater Vancouver. “I want my son to know more about Canadian culture,” she says. “I didn’t want a neighbourhood where most of the children are Chinese.” If all goes according to plan, Chen and her son will rejoin her husband back in China in about two years, after the son has become fluent in English and has gained a jump-start from an education system that Chen views as more enlightened than China’s. Joint Chinese-Canadian citizens, the family may well return at another stage of his education-another common trait of Chinese parents, who often see an advantage in blending the rigorous but also rigid system back home and Canada’s more liberal approach.

Historian Yu, who is descended from families who were kept apart by Canada’s discriminatory Head Tax, views the growth of Canada’s Asian population not as a new phenomenon but as a renewal of North America’s Pacific ties. At the turn of the 20th century, B.C.’s population was about 10% Chinese-a proportion that was only regained around the beginning of the 21st century. The largely Chinese-constructed CPR was not so much an act of nation-building, Yu says, but rather a gamble by investors who hoped to cut transportation time to Europe for precious Asian goods like silk and tea. For most of the 20th century, Canada looked east toward Europe, the source of most immigrants and non-U.S. trade. But today more than half of all immigrants are from the Asia-Pacific region (more than 90% in B.C.), and trade across the Pacific easily exceeds its Atlantic equivalent.

Yu is optimistic that the resentment that bubbled up in B.C. during the late 1980s, when Hong Kongers and Taiwanese first began to arrive in large numbers, has subsided considerably. That animosity was a function of Canada’s legacy of white supremacy, he believes; of so many middle-income people-”accountants of empire”-having had it so good for so long. Vancouverites, especially younger ones, now see the real estate situation for what it is, a simple case of market economics, he thinks. “Almost no one under 40 cares,” he says, suggesting that Vancouver’s rapid transformation has been relatively painless, all things considered. Even in the wake of the arrival of a ship carrying Tamil asylum seekers, British Columbians remained more favourable to immigration than any other Canadians, according to a September Angus Reid Public Opinion poll. “In B.C. there’s a sense of a gain from immigration,” confirms Reid.

Still, it’s undeniable that there has been a downside to the influx of wealthy people; Bing Thom, whose firm has given Vancouver some of its most iconic buildings, expresses a common view when he laments how real estate prices have banished young families from close-in neighbourhoods, except for the increasing number who choose high-rise condos over houses. He also worries about the city losing the bohemian air that has always contributed to the Lotus Land effect: Where will all the chefs and designers live, let alone the artists and musicians? “We are emptying our city,” he says. “A lot of young people are forced to leave.”

At the same time, there’s a vein of thought that Vancouver’s recent focus on rezoning land to provide places to live-especially a downtown condo forest that has become the city’s defining feature-has left it with a dearth of office buildings and factory sites where all those new residents might actually be able to find work.

Still, if Vancouver must be on guard against some of the changes wrought by the influx, a city with an economy disproportionately dependent on the real estate industry must also be wary of the day the arrivals lounge empties. This past summer, when the pace of sales eased right across the country, the soul-searching in Vancouver was particularly intense, even though local prices did not decline. If a real estate slump were a mere reflection of Canadian circumstances, that would be one thing; but if a breakdown in the Asian relationship, that’s quite another.

Lynn Hsu owns Macdonald Real Estate Group, home base to Manyee Lui and almost a thousand other agents; since buying a single office in 1990, Hsu has turned the company into Western Canada’s largest realty operation, and she is well aware that Vancouver is vulnerable to changes in Asian investment and immigration. After 1996, when immigrants from Hong Kong stopped arriving and many in fact returned to Asia, real estate swooned, reviving only around 2002, when economic conditions improved and immigration from mainland China began to surge. Hsu says there is little agreement about what would happen to the market if China itself experienced a real estate meltdown of some sort. “One view is that it may have a negative effect,” due to the depletion of fortunes built on real estate and development (the primary contributor of wealthy migrants, alongside manufacturing and mining, she says). “But the other view,” she says, “is that Vancouver will look more appealing as people look for ways to get their money out of China.”

Hsu cites another factor that has the real estate industry on tenterhooks: the imminent doubling of requirements for investor and entrepreneur immigrant programs, raising minimum net worth to $1.6 million and minimum investment to $800,000. What will this change do to the supply of wealthy immigrants? “That’s the question everyone is asking,” says Steven Meurrens, the immigration lawyer.

Some 80% of immigrant investors are from Asia; at Immigration Canada offices in cities such as Beijing and Hong Kong, there are three-year backlogs of applicants who qualify under the old rules. Thus it will likely be years before the number of people arriving under the investor program dwindles. And as long as wealthy immigrants continue to arrive, pretty much everyone believes they’ll continue to buy homes here, rather than, say, invest in American cities where property is now much cheaper. “They’re here, not there,” says Hsu flatly. “They need a place to live.”

There’s also general agreement that a large proportion of Chinese immigrants won’t opt to rent instead of buying, even if the economics make more sense. “People in China always feel very insecure if they do not own their own house,” says Fang Chen. “Even those with a very low income will spend their savings to buy.” It’s a trait common to any country with an agricultural heritage and limited land, explains Tsur Somerville, an associate professor at the UBC Centre for Urban Economics and Real Estate. “There are some countries where the only collateral has been real estate.” Historian Yu even compares Vancouver real estate to a Swiss bank account-not for its secrecy, but for its rock-solid value and political peace of mind. The icing on the cake: Capital gains on a primary residence are tax-free in Canada.

So there’s a consensus of sorts: Vancouver real estate prices are unlikely to rise in the near future and may or may not fall. But if they do fall, the primary reason will not be a dearth of wealthy immigrants. That still leaves the bigger question: Is Canada’s third-largest city forever doomed to make its living selling condos, or will its connections and favoured geographic position translate into something new and significant? In other words, will it be New York, or will it be Halifax-a place haunted by a heyday it failed to exploit and can never recapture?

Most of those near the centre of the Vancouver/Asia nexus are inclined toward the more prosperous scenario. “Hong Kong was the entrepôt to China. Now that Hong Kong is part of China, Vancouver is the next stop, the Asian gateway,” says Thom. In a world connected primarily by air and electronics, the city’s isolation is no longer an issue, he says; second homes are being purchased and offices established because a place once seen as remote is now becoming central. Andrea Eng adds a classic Left Coast wrinkle to the same argument: “This is the best time zone in the world,” she says. “I get up at 3 or 4 in the morning and do all my Europe, Asia and East Coast e-mails, and then I go to yoga.”

Eng believes that the obsession with real estate is merely a phase for the adolescent city. True, she says, Asians get their first look at Canada’s huge expanse and say, “Let’s urbanize it!” But that impulse will pale compared to the continent’s appetite for Canadian resources, which is rapidly becoming the next chapter in this story. As ownership regulations loosen and Asian companies rush to secure their necessary shares, Vancouver, their North American toehold, will be in a position to wrestle away some of the action from places like Toronto and Calgary, not to mention Houston and London. Or so the theory goes. The desire to live here is certainly strong enough, Eng believes. A generation ago, many Asian immigrants landed in Canada as a consolation prize because the U.S. had lower quotas and stricter entry requirements. Opinions differ, but Eng thinks Canada is now a first choice, not a fallback. “It’s definitely preferable to the U.S.,” she says. “By miles.”

Meanwhile, there’s a sense that the rivets joining local and Asian economies are finally being hammered down. “The notion that there are limited business opportunities connecting Vancouver and Asia is an increasingly outdated one,” says Yuen Pau Woo, CEO of Vancouver-based Asia Pacific Foundation of Canada, a think tank charged with analyzing and supporting those links. He points out that many national and international legal and accounting firms are beefing up their Vancouver offices to serve the Asian market. In September, Vancouver mayor Gregor Robertson sought to capitalize on the China connections on an 11-day Chinese mission, with green technology the primary focus.

Even the apparent failure of many immigrant families to take root may be advantageous, thinks Woo. The foundation estimates there are as many as 600,000 Canadians living in Asia-an instant network in waiting. Given that there is arguably more human interaction between Canada and China than between any other OECD countries, there is nothing “heritage” about Vancouver’s Asia-Pacific status, unlike a city like San Francisco, the original would-be Geneva of the Pacific. Woo cites the recent spread of British Columbia’s White Spot hamburger chain in Asia as a case of “taste transfer” of a sort that will only accelerate as Asian and North American cultures become more intertwined.

At the same time, he says, “the opportunity to tap into Vancouver’s Asian knowledge and networks is grossly underutilized.” Asians and non-Asians alike often still see Vancouver chiefly as a retirement or lifestyle destination. “But the raw material to be a hub is already in place,” Woo argues. It’s a matter of “mobilizing, energizing and creating a critical mass of business, networking, and intellectual activity.”

Angus Reid the businessman has a slightly different take on Vancouver’s position than Angus Reid the sociologist. From the latter perspective, the city’s multiculturalism is paramount. But as CEO of Web polling firm Vision Critical, which is expanding rapidly around the globe, he seconds the views of Thom and Eng about Vancouver’s privileged position. “It is as mundane as time zones,” he says, “but Vancouver is also a really good source of talent.”

And maybe that’s a start: a high-end workforce if not yet a lot of high-end jobs. What Vancouver needs now is a hundred more enterprises like Reid’s that bubble up from within to capitalize on the talents of the multilingual and multicultural children of the multimillionaire immigrants, the folks who are now bussing tables and delivering papers. When that happens, maybe Vancouver will have finally found a way to parlay its Asian connections into an economy that’s capable of supporting its Swiss-watch lifestyle.

By Jim Sutherland, Globe and Mail Report on Business, December 2010,  Price of Paradise Vancouver Real Estate

10 Home Repairs that Will Save You Money

Remodels are great, but can get pretty pricey. Not everyone has thousands to add value to their home – but what about those less glamorous repair projects on your to-do list? These simple and inexpensive maintenance items don’t seem like they add to your home’s value, but they’re big money-savers in the long run.

1. Caulk

If you’ve lived in your house a few years, you probably noticed that the caulk along your sinks, countertops and bathtub is coming loose. These gaps may not seem like a big deal, but they can wreak havoc inside your walls. Moisture causes mold and even leaks – expensive repairs that can easily be prevented. A tube of kitchen and bath caulk costs just a few dollars, and you’ll avoid expensive repairs.

 

2. Insulate

The quickest way to save money on your energy bill is to insulate, yet so many of us overlook this simple home improvement project for its benefits. Sure, your walls are insulated, but what about your basement, your attic, and your garage? Just in case the energy cost savings aren’t enticing enough for you, check with the government – there are current credits that allow you to deduct this energy-saving expense from your taxes. (Find out what you can do to improve your chances of having a quick sale, in Selling Your Home In A Down Market.)

3. Change Filters

When was the last time you changed your furnace’s air filters? It’s an oft-overlooked chore, but one that keep your furnace running efficiently, and improves the air quality inside your home. Change your filters at least every three months to keep your furnace working efficiently for years to come.

4. Install a Thermostat

Does your home have a programmable thermostat? If not, invest in one; it’ll earn its money back in no time. By programming heating and cooling, you avoid paying to keep an empty house at a comfortable temperature. Manage the heat appropriately in winter to avoid burst water pipes; in summer, draw your curtains during the day to keep the house cool. Buy a programmable thermostat and you can save big on monthly bills.

5. Fix Leaks

That leaky faucet or runny toilet is draining your water bill, and in most cases it’s a cheap and quick fix. Replace the washer on your faucet, and while you’re at it, consider installing a faucet aerator if yours doesn’t already have one. Faucet aerators reduce water flow from your faucet to save on your water bill; check your home improvement store for this inexpensive fix. (If you’re just looking to get rich quick, you could end up in the poorhouse. Find out how, in 5 Mistakes That Make House Flipping A Flop.)

6. Install Dimmers

Dimmers aren’t just for romance; they can save you big bucks on your energy bill. They’re cheap and easy to install, so look for rooms that could use a little reduction in harsh lighting. While you’re at it, replace your light bulbs with energy-efficient ones. They’re big money savers.

7. Clean Carpets

Clean your carpet lately? With proper care, carpets can last a long time and look great, but everyone needs to clean them sometime. You don’t need to hire an expensive service either – if you can vacuum, you can clean your carpets by yourself. Rent a carpet cleaner at your local supermarket or big-box store for a modest fee. Make sure you vacuum thoroughly before cleaning, and pick a dry day so your carpet dries quickly. With regular cleaning your carpet can last a long time, saving you big bucks on new flooring.

8. Clean Siding and Windows

Windows and siding get a beating in most climates. Wash your windows and siding with a simple hose and water first, and with a cleaning solution as needed; your home improvement store sells specialty products for just this kind of job. Rent a power washer for very dirty jobs. Keep an eye on cobwebs, wasp and bird nests to ensure your home’s exterior stays in good shape. Touch up with paint as needed, and your house will look like new at little or no cost. (Some renovations will mean a bigger sale price on your home, while others will just cost you. Find out more, in Will Your Home Remodel Pay Off?)

9. Fight Pests

Those spiders and ants at your foundation, that mouse nest in your crawl space? Take care of it – pests can destroy a home in a hurry. Hire an exterminator, or for small pests, combat with pesticides. Even if you don’t think you have a problem, inspect every part of the interior and exterior of your home regularly to avoid small pest problems getting out hand.

10. Clean Ductwork

If your home is older, your ductwork likely has dust, grime, and other unwelcome residue inside. For big jobs, pay a professional; a simple cleaning can easily be done yourself. Simply remove the grates from your air vents, and clean the inside with your vacuum.

The Bottom Line

The best way to invest in your home is to take good care of what’s already there. With these simple repair jobs, you’ll even save money – with just a little elbow grease as investment.

 

Source: The Globe and Mail, here are 10 simple home renovation ideas that can save you money in the long run. July 01 2010