Luxury Homes Collection – Fall 2018

New Fall edition of Macdonald Realty’s Luxury Homes Collection has arrived!

For six consecutive years the magazine has been featuring a wide variety of luxury properties from all over the province. The collection of luxury homes keeps surprising us with the range of amenities that high-end homes have to offer. Whether it is a well-equipped wine room, yoga studio, karaoke stage or even a slide, there is always something special for an affluent home buyer.

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Big Fat Deal: $11 Million to be a Minimalist in Kerrisdale

BigFatDealKerrisdale

Each week, BCBusiness takes you inside one of the most outrageously upmarket real estate offerings in the province

Address: 6485 Cedarhurst Street, Kerrisdale

Price: $10,998,000

Listing: R2234536

The skinny: Five-bedroom, seven-bathroom, 6,481-square-foot house on a 15,847-square-foot lot in Kerrisdale.

The bling: OK, it’s time to get with the times and leave the frou-frou behind. Yes, we know you love your frills and fancies, your chintz and your shag, but being a person of high net worth brings with it responsibilities. What? This is news to you? Don’t panic, we aren’t coming after your non-declared income or your shady shell companies. There’s no shorting your market up our sleeves, honest. We just think you should be aware that if you really want to look good around town right now, you should try living in a sleek, modern box with sliding windows for walls and (extremely expensive) natural materials that downplay your wealth rather than all that Italian marble and Svarowski crystal you’ve been bedecking your space with for decades. Seriously, dude, minimalism shows you’ve got so much money to burn you don’t have to prove it. You can clad your walls with wood and shower among lumps of raggedy rock, and people will think you have style. Sure, the through draft of indoor/outdoor living and that fabulous skinny pool are only really of value maybe two months of a Vancouver year, but that in itself shows your reserves are bottomless. And anyway, a dozen more patio heaters screwing up the environment isn’t your problem. Right? Rich people responsible? We were only joking.

The hidden extras: Wok room, media room, wine cellar, gym, air conditioning (because you might not want to, you know, open one of those great big wall windows and you deserve to live in a climate-controlled world).

This article was originally posted on BCBusiness on May 17, 2018. Written by Fiona Morrow 

 

Luxury Homes Collection Magazine – Summer 2018

New Summer edition of Macdonald Realty’s Luxury Homes Collection has arrived!

For the six consecutive years the magazine has been featuring a wide variety of luxury properties from all over the province. The collection of luxury homes keeps surprising us with the range of amenities that high-end homes have to offer. Whether it is a well-equipped wine room, yoga studio, karaoke stage or even a slide, there is always something special for an affluent home buyer.

The cover story of this edition is an oceanfront beach home in Victoria Cordova Bay with a 180-degree view and floor to ceiling windows to enjoy the waterfront scenery. The home has an array of amenities to make you feel on a retreat, including spa inspired shower, smart wired indoor and outdoor sound system, media room with wet and of course private sandy beach.

Grab your copy of the magazine, both print and digital versions are available now.

Summer2018coverthumb

click cover image to view magazine

CLICK HERE to view the digital edition on your computer or tablet

Victoria ranked second in world for luxury real estate | CHEK News

A new report from Christie’s International lists Victoria as the second hottest luxury real estate market in the world.

When you think of a luxury home you probably picture a house on the ocean, or a large estate, but with the Victoria real estate market booming, the face of luxury is changing.

One townhouse in Oak Bay Village is about to go on the market for just over a million dollars.

“If this was a single family home we’d be talking about a much different number especially in today’s market,” said Jordy Harris, a realtor with Newport Realty.

Home prices, especially in desirable neighbourhoods like this one, have gone up.

“In the last three years has gone up by about 40 to 50 per cent,” said Ara Balabanian, President of the Victoria Real Estate Board.

And that may be why a new report from Christie’s International lists Victoria as the second hottest luxury market in the world, behind Toronto, and just ahead of San Francisco.

“Luxury can be something that is just over a million, and I say that with some respect, but our prices have risen to that point,” said Jack Petrie, Managing Partner of Newport Realty, a Christie’s International real estate firm.

While 2016 saw a big increase in homes that sold for a million or over, only a handful went above three million.

“We had approximately 16 homes in 2015, we had 20 homes sell in 2016,” said Balabanian.

The report lists offshore buyers, put off by Vancouver’s new foreign buyers tax, as one of the driving factors for the luxury sales boom, but local realtors aren’t seeing it.

“It’s not as if there was a sudden floodgate where all those buyers, foreign buyers, looking to buy in Vancouver, came over here, it just didn’t happen like that,” said Harris.

“It’s still a small component of the marketplace, it’s somewhere around 5 per cent,” said Balabanian.

They say the largest segment of home buyers remains locals, followed by those from elsewhere in Canada.

But if prices continue to soar, “luxury” may need to be re-defined.


 

The article was originally posted on CHEK News, May 10, 2017. Written by April Lawrence.

Macdonald Realty nominated for HGTV’s Ultimate House Hunt 2016

It is time for HGTV.com’s Ultimate House Hunt once again!

This year Macdonald Realty is nominated in the Best International Home category for a spectacular Three-Level Penthouse in Vancouver, Canada.  This is the category we won last year for The Sanctuary, a luxury home we listed and sold in Squamish B.C.

spectacular Three-Level Penthouse in Vancouver

SENSATIONAL TROPHY VANCOUVER PENTHOUSE – Atop a 32 storey skyscraper this three level sky mansion sprawls over 6,000 square feet of living space and 1,700 square feet of terraces. Outstanding first impressions from the direct elevator access leading to a grand living room featuring soaring 16 foot ceilings, panoramic English Bay views and a grand curved staircase. Master boasts gas fireplace, large steam shower and a two person jetted tub situated mid room. Main level offers second master suite with fireplace and numerous built-in cabinets. Bespoke chef’s kitchen with 48 inch Décor six burner range, numerous built-in ovens and appliances anchored by huge granite island and access to 700 square foot terrace with fireplace and built-in Viking BBQ. Family room with grand wet bar, air conditioning, concierge and six-car private garage. LP $7,838,000

Macdonald Realty nominated for HGTV luxury home contest

Tour amazing homes across the globe, vote for your favourites, and enter for your chance to win a $10,000 cash prize! And remember you can vote for your favourites once a day. Follow the instructions below to vote for Macdonald Realty’s Nominee for HGTV’s Ultimate House Hunt 2016:

Step 1: Tour the homes in the category.
Step 2: When you’ve found your favorite, click “I’m Ready to Vote.”
Step 3: Choose your favorite by clicking “Vote.”
Step 4: Click “Continue to Next Category” to tour more homes.

Click here to vote.

Vote for HGTV's Ultimate House Hunt 2016

HGTV’s House Hunt Winner in Best International Home 2015: Timber Frame Home in Squamish

The HGTV House Hunt has finished and the votes are in. Congratulations to all the winners! Thank you to all who helped Macdonald Realty’s International Home nomination become the 2015 winner. Find out more about this amazing listing below on the HGTV House Hunt website:

Timber-Frame Home in Squamish

HGTV_4

This backyard view of the home shows off the pairing of stone and neutral siding that were used for the exterior. The landscape and hardscape includes a small pond and evergreen trees.

Special thanks to our luxury home marketing network partners at Luxury Portfolio International for coordinating our nomination.  What an honour!  Our Squamish listing won over fellow nominees from Queenstown New Zealand, Paris France, Marrakesh Morocco, Australia, South Africa, Mexico and other exotic global locations.

Big Fat Deal: This is what $15 million will buy you in Vancouver | BCBusiness

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Each week, BCBusiness takes you inside one of the most outrageously upmarket real estate offerings in the province in their Big Fat Deal real estate blog.

Price: $14,988,000
Address: 1268 Tecumseh Avenue, Vancouver
MLS: V1100762
Listing agents: Erin Mulhern and Manyee Lui at Macdonald Realty Ltd. in Vancouver

Custom built in 1984 with a Georgian design, this 7,000-sq.-ft. residence’s stately grandeur matches its location just off Vancouver’s exclusive Crescent enclave in the city’s First Shaughnessy district. For history buffs, the Crescent has always been synonymous with wealth and power, being the preferred address of lieutenant governors and the city’s elite over the past century.

Fast forward to present day and the area still holds cache with numerous august homes and estate-sized lots. This gated residence is described by listing agents Erin Mulhern and Manyee Lui as “simply exquisite” with a beautifully appointed interior that starts with a dramatic foyer accented by 18-foot ceilings and a sweeping double staircase leading to a galleried landing that sets the tone for the rest of the home.

The kitchen counts professional-line appliances while an expansive great room with vaulted and coffered ceilings provides an outlook that spans the entire south-facing garden. A butler’s pantry serves as a connection between the kitchen and the dining room, where mirrored ceiling panels and a chandelier add a touch of glamour.

The formal 23-foot living room can easily accommodate a baby grand piano, while hardwood floors flow through to the adjoining study where wainscoted walls imbued with a deep red gloss add a further notch on the imperial chart.

The upper level is home to four bedrooms including a private master wing endowed with the required walk-in closet and a spa-like ensuite bathroom complete with a rain head shower and bench seating, plus a stainless-steel freestanding bathtub. A one-bedroom suite above the three-car garage provides additional accommodation.

Pull up a chair in the recreation room downstairs where a well-stocked bar and separate wine cellar will keep the libation flowing, or decamp into the media room for movie watching.

Multiple french doors lead out into a garden oasis with large terraces that are perfect for summer entertaining, and a swimming pool and a tennis court for friendly—or more serious—competition.

This article was originally posted on BCBusiness, April 24th, 2015.  Written by Nicola Way.

Nicola Way runs the property listing sites BestHomesBC.com and AssignmentsCanada.ca.

Big Fat Deal: $10 million for a castle-like home near Victoria | BCBusiness

Each week, BCBusiness takes you inside one of the most outrageously upmarket real estate offerings in the province in their Big Fat Deal real estate blog.

Price: $9,990,000
Address: 9750 West Saanich Road, North Saanich
MLS: 336209
Listing agent: Peter Nash at Macdonald Realty Ltd. in Victoria

For those seeking a little ooo-la-la in their home life, try this French-inspired chateau sitting on a six-acre estate for size. Even its name ‘Chateau de Lis’ conjures up romance and elegance.

Better still, you don’t have to travel to Europe to find it. Located 30 minutes from downtown Victoria, North Saanich plays host to this 9,800-sq.-ft. residence, which was constructed in 2007.

La noblesse would surely feel at home here. As listing agent Peter Nash explains, the house has been “designed, crafted, engineered and built to a very high standard with great attention to quality and detail.” An exhaustive list of bespoke finishings dominate the house with plastered Italian tile ceilings, turrets, concrete surround with decorative sculptures, travertine fossil floors, custom-made gargoyles, imported antique chimney caps, Juliet balconies, a slate and copper roof, limestone and porcelain floors, and stained-glass windows.

And the gardens wouldn’t look out of place at the Palace of Versailles, either. Along with exquisite landscaping, manicured lawns, fountains, bridges, an orchard, and vegetable gardens comes one of the property’s other showcases: almost 300 feet of easy-access oceanfront and a prime westerly exposure with far-reaching views across the Saanich Inlet.

Beyond the old-world elegance are also two levels of luxurious living, incorporating modern desires such as a theatre room comprising a state-of-the-art projector and two-tier seating with plush leather seats. Of course no stately home would be complete without a wine cellar and this 1,000-bottle temperature-controlled one will not disappoint.

The great room and dining hall would impress even Louis XIV with lofty vaulted ceilings, carved fireplaces, murals and panoramic water views. The commercial-grade kitchen ups the ante with high-end appliances, including a concealed Sub-Zero fridge and freezer and a copper-hooded, vented pizza oven.

There is separate accommodation for guests—designed with the same flair as the main residence—and above the garages for six cars are, of course, those caretaker quarters. After all, what’s a chateau without staff?

This article was originally posted on BCBusiness, January 8, 2015.  Written by Nicole Way.

Nicola Way runs the property listing sites BestHomesBC.com and AssignmentsCanada.ca.

BC luxury home sales above $3-million fell by a third in 2012 | The Vancouver Sun

“Based on a Macdonald Realty Luxury Report, this past year the sales number of luxury homes over $3 million has fallen one third since 2011. However, 2012 is only second to 2011 in sales. In a Vancouver Sun article, Dan Scarrow, Vice President of Macdonald Realty, commented on the impact immigrants buying patterns, investor sentiment and psychology has changed in the past year affecting the lower mainland’s luxury market.

“For the past few years, we’ve seen lots of new investor-class immigrants coming into the market,” Scarrow said. “ … They’re not just buying a house for themselves, but also three or four residential investment properties as well.”

This “exuberance” among immigrant buyers has slowed, Scarrow said, as the economy slowed in China and prices rose rapidly in Vancouver.

Macdonald Realty, REALTOR Will McKitka also commented in the article discussing his specialty of luxury penthouse homes, a segment of the market considered to be attracting buyers.

Read more www.vancouversun.com
Vancouver Sun article BC home sales above $3-million fell by a third in 2012 from March 1, 2013

Luxury real estate booming in Vancouver | Financial Post with Dan Scarrow and Matthew Lee

If you think Vancouver’s housing prices are overdue for a major price adjustment, tell that to the surging number of luxury home buyers.

According to MLS statistics provided by Macdonald Realty, a record 375 homes — including nearly 50 condos — sold for over $3-million in 2010, breaking the record of 209 set in 2009 and more than double the 167 sold in 2008.

Of those, 73 homes sold for over $5 million.

The sales were primarily, but not exclusively, on Vancouver’s west side, with the priciest home going for $17.5-million at 3489 Osler.

The second and third priciest homes — the second also on Osler and the third on Point Grey Road -both sold for about $11 million.

As well, Macdonald Realty says, if current patterns hold, the number of $3-million-plus homes is expected to reach 550 this year, raising the spectre that in some neighbourhoods a $3-million home may no longer be considered particularly exclusive.

In 2000, just 10 properties in Metro Vancouver sold for over $3-million, none of them condominiums.

The market for luxury homes is now “insanely hot,” with mainland Chinese buyers — who are also affecting the Richmond market in a big way — the primary purchasers, said Dan Scarrow, Macdonald Realty vice-president of corporate strategy.

“Ninety-per-cent (of the luxury home purchases) are on the west side, probably some in West Vancouver,” he said in an interview. “But it’s incredibly striking, when you think what the prices were 10 years ago.”

Scarrow said that while a $3-million house has always been categorized as “luxury,” he no longer knows if that’s the case in key West Side neighbourhoods, including Shaughnessy and Point Grey.

“We’re part of a global luxury market by the ultra-wealthy,” he said. “And from the buyers’ perspective, prices here are cheap for what you get.”

Tsur Somerville, director at the centre for urban economics and real estate, Sauder School of Business at the University of B.C., said in an interview that just because there are more homes selling for over $3-million doesn’t mean they’re not luxury homes.

“It’s pretty subjective,” he said. “But $3-million is an expensive home. And just because it’s on a small lot doesn’t mean it’s not a luxury house.

“And the fact that there’s a whole lot more ($3-million homes) than a decade ago, with the price increases, there’d better be.”

Mr. Somerville also said that China is a huge source of immigrants to B.C. and that mainland Chinese immigrants tend to be investors and entrepreneurs.

“Clearly, there’s a very targeted demand for higher-end properties that many associate with the mainland Chinese market.”

But he said there’s an absence of clear data on the specifics of those buyers, whether it’s primarily immigrants or investor money from China. As an indication of how the luxury condominium market has grown, Mr. Scarrow said that last year a total of 49 condos sold for over $3-million — including seven for over $5-million — with the top three closing in on $6-million each, the priciest at Two Harbour Green, 1139 West Cordova, in Coal Harbour, for $5.8-million and the other two at the Shangri-La in downtown Vancouver.

Scarrow said many more properties are crossing the $3-million threshold, which now buys a new or newer house in the 2,500-to 3,000-square-foot range on a smaller west side lot.

“Now, you see multiple $3-million-plus homes on every block. I’d say $5-million is now where you’re going for that luxury range.”

Alice Zhang, who moved from Hangzhou, China, to Vancouver two years ago, now lives in one of six properties that she and her husband have purchased in Vancouver since moving here.

Zhang, who has two children, is waiting to move into a new home they’re constructing on a Shaughnessy lot that they bought for about $3.1-million. The house is expected to cost another $3 million, which Zhang believes is a good deal.

“We moved from the most beautiful city in China to Vancouver, which we consider more beautiful,” said Zhang, whose family owns hotels and a real estate development company in China.

“I think that compared to other Canadian cities, Vancouver is expensive. But, China is more expensive (than Vancouver).

“And the air is very fresh here and it’s very green. You feel like you’re in a garden.”

Scarrow cited another client who purchased a 2,600-square-foot condo in Coal Harbour for about $1,600 a square foot.

“(She and her family) has homes all around the world. In Knightsbridge, London, a flat was sold to her for $8,000 (Cdn) per square foot. Their flat in London was 3,000 square feet and they paid $24 million for it.”

She also has two homes in Hong Kong, one in Lake Tahoe, one in San Francisco, one in New York and one in Madrid, Spain, Scarrow said. “They all say their Vancouver property is their favourite home. They think it’s the best value.”

Macdonald Realty sales manager Matthew Lee, whose firm sold the three most expensive homes in Vancouver in 2009 and two of the five most expensive homes in 2010, believes that it’s not just mainland Chinese who are fuelling the luxury market, “but buyers from Europe and the U.S. are willing to pay these prices as well. Globally, Vancouver is still seen as a relatively good bargain.”

While the west side of Vancouver had the largest number of luxury homes sold, other areas in B.C. have also seen some very expensive sales, including the Fraser Valley’s top three sales between $5.3-million and $6.1-million, the Okanagan, from $5.4-million to $10.7-million, and Victoria, from $3.9-million to $6.8-million.

And while Vancouver has seen some very expensive homes sold over the past decade, including one for $17.5 million in 2008 and one for $17-million as far back as 2004, it’s the sheer numbers that are striking. In 2000, just 10 homes sold for over $3-million, and 78 in 2005.

 

To view this article in Financial Post click here  By:  Brian Morton, Financial Post – Postmedia News

 

Chinese Love Affair with Canada continues | South China Morning Post with Dan Scarrow

Love can blind us to traits others may see as red flags. The Chinese love Canada and it seems even an uncertain performance in the property sector cannot dampen their ardour.

While Canada has fared better of late than its southern neighbour, the United States, its property market has not always reflected that. At times “red hot”, at others lacklustre, buyer activity has been up and down amid worries that external economic forces that could stunt the country’s growth. In its Emerging Trends in Real Estate 2011 survey, PricewaterhouseCoopers (PwC) notes that, even in Toronto, a city with an “impenetrable financial sector, diverse manufacturing industries and immigration flows supporting growth and intensifying tenant demand”, some investors still worry about flattening apartment rentals.

Vancouver’s office and condo markets remain “red hot”, fuelled by international visitors who bought after last year’s Winter Olympics. Yet the PwC report finds that despite the inherent attractions of the city, some investors are uneasy. Says one: “The market is artificially inflated: it’s been hot for too long.”

Market inconsistencies are also reflected in Canada’s Scotiabank Global Real Estate Trends report, which notes that Canada had one of the better performing housing markets among advanced nations last year, but also one of the most volatile.

An “unusually active” winter and spring were followed by an unusually soft summer. Pricing has mirrored demand, the market gaining 16.6 per cent year-in-year in the first quarter, and declining by 1.5 per cent in the third quarter. The bank hedges its bets on Canada, declaring it is “neither overtly optimistic nor pessimistic” in its outlook for this year. It expects interest rates will remain at historically low levels – an “extremely powerful inducement” for buyers. Demand will likely be tempered by more moderate employment and income growth as government restraint takes hold.

Scotiabank is projecting “a fairly lacklustre year” for residential housing. That doesn’t seem to worry the stream of buyers from the mainland and Hong Kong who call Canada their second home. Vancouver-based Dan Scarrow, vice-president of strategy at Macdonald Real Estate Group, says Chinese – mainly from the mainland – are the largest players in the luxury market, where they’re out-bidding the locals at “a ferocious rate”.

In the months before he moved out of sales to focus on management early last year, Scarrow sold 12 C$5 million-plus (HK$39.21 million) condos and multiple C$3 million-plus homes, mostly to mainlanders, but also to buyers from Taiwan, Hong Kong and local Canadians.

“The market in Vancouver for Chinese buyers is extremely hot,” says Scarrow, a Putonghua speaker who is half-Chinese. “It’s a top destination for wealthy mainlanders looking to emigrate from China and, when they land, many immediately look to purchase a principle residence.”

He says wealthy Chinese tend to be more comfortable with real estate as an investment. “Because of the language barrier, many of my clients are less comfortable with putting their investment dollars into financial products or services they do not understand, or know what the risks are. With real estate, they get to see something tangible.

“They are willing to put a greater weighting of their portfolio into real estate. In the wealthier areas, Chinese buyers are consistently out-competing locals for properties. Our research indicates that on the wealthier West Side of Vancouver, 78 per cent of homes of more than C$2 million were sold to Chinese buyers in 2010.” Scarrow says the Vancouver market continues to be strong. “Canada is in the strongest fiscal position of any country in the G8 and has an over-abundance of natural resources to feed its economy in the 21st century,” he says. “Vancouver may be the best-positioned city in the world.”

Stu Bell, of Prudential Sussex Realty West Vancouver, says: “Home buyers coming from [the] mainland and Hong Kong have intensified in the past six months and boosted home prices by up to 46 per cent in the past two years.”

They come because it’s “the best city in the world,” he says. “The buzz for Vancouver must be experienced firsthand to truly appreciate. In winter, gorgeous snow-capped mountains tower over the Northshore, and in summer the beaches and marinas are flooded with activity. Fine restaurants, excellent shopping, world-class outdoor activities, such as golf, skiing and boating and a thriving city centre filled with entertainment, keeps Vancouverites active.”

Bell agrees West Side is “the hottest real estate in Vancouver”, and one most popular among overseas Chinese. Buyers on property-hunting tours will often buy multiple properties with cash, Bell says. Here, the average price of a detached home is C$1.7 million, up 46 per cent from January 2009.

 

Source:  SOUTH CHINA MORNING POST, SPECIAL REPORT by Peta Tomlinson

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

The 2010 Olympics, the Luxury Market, and Asian Buyers | Square Foot Magazine (Hong Kong)

Vancouver’s property market bounces back and is poised to be stronger than ever

With the Pacific Ocean to one side and the Rocky Mountains to the other, Vancouver is one of the world’s most scenic and liveable cities — and anyone from Vancouver will tell you that. Urban without being overwhelming, Canada’s third largest metropolitan area has a laid back pace that belies its economic importance and has been attracting buyers from around the world — and Asia in particular — for years. Only moderately affected by the financial meltdown of 2008, Vancouver’s property market looks to be holding firm, and the immediate future is looking bright.  A bump from the 2010 Winter Olympic Games would be expected, but the rise in interest in Vancouver pre-dates the actual Games. “The Winter Olympics resulted in a bump in the real estate market prior to the event. Vancouver won the bid in 2003 and real estate prices have been on a relatively strongupward trajectory since that time,” explains Macdonald Real Estate Group’s Vice President of Corporate Strategy Dan Scarrow. “The [effects] on real estate prices post-Olympics has been more muted; however, the long-term effect of the Olympics on real estate activity in Vancouver will be positive.”

Few were spared the wrath of 2008’s global financial agony, but things could have been much worse than they were in Canada. The country’s mixed economy spared it from more considerable damage and, “Vancouver, in particular, fared very well through the turmoil,” in Scarrow’s view. Property prices were off 25 percent from their mid-2008 peak but rebounded strongly enough in mid-2009 to surpass their previous peak. “This indicates that the housing market in Vancouver was effected largely by psychology rather than market fundamentals,” theorises Scarrow.

So who is driving the market these days, and what kind of market exactly is Vancouver? Scarrow breaks down the three traditional buyer segments: “The lower end is still driven by local buyers. Before the financial crisis, investors played a large role in Vancouver’s real estate market, however, since then, the market has shifted more towards owner/occupiers as investors remain relatively skittish about the global economy.” Pure investment has been on a slow rise in the last few months, but it has yet to reach pre-2008 levels, as global economies are still in a recovery process.

It comes as no surprise to determine who’s driving Vancouver’s luxury market. “The higher-end of the real estate market (over CA$2 million) is being driven largely by Mainland Chinese buyers. That’s not to say they are the sole purchasers of these properties, but their presence has resulted in this price range being highly active over the pastseveralyears.” According to a February report in the  Vancouver Sun, 31 homes priced over CA$5 million were sold in Greater Vancouver in 2009. But as Scarrow pointed out, they’re not alone: Australians, Europeans and Americans are also getting on the Vancouver bandwagon. Properties in key locations like Shaughnessey, South Granville, urban Yaletown, and tony Coal Harbour, Point Grey and Dunbar (Vancouver’s most expensive location per square foot of land), even with a strong Canadian dollar, are also something of a bargain — with land — for Hong Kong and Mainland buyers.

Vancouver, and Canada in general, has the kind of government and social atmosphere that has made it an investment and immigration preference for decades. “Canada is in a unique fiscal position in the world with relatively low public debt and deficits and a quality of life that is second to none. Thispoliticalandeconomic stability is attractive to a whole host of people from around the world who see troubling times ahead. This, combined with Vancouver’s natural beauty, makes it a perfect place to raise a family,” Scarrow reasons. For Asian buyers, Canada is a strong choice for wealth protection and a good spot to send children for a Western-style education. In addition, Vancouver is, quite simply, relatively close to home.

The same luxury pattern evident in Hong Kong is slowing broadening in Vancouver. The high-end market has been strong for the last few years, including the recent recession, and the city’s burgeoning international image is attracting affluent buyers. “Vancouver’s famous Coal Harbour neighbourhood, overlooking the mountains, ocean, and Stanley Park, now sells at nearly $2,000 per square foot, where less than 10 years ago, it sold for less than $500,” states Scarrow. That’s a middle-class or entry-level price in Hong Kong, where space it at a premium. If Canada has one thing it’s land, and Vancouver has seen its share of shifting with the influx of overseas wealth. “There are two distinct markets in Vancouver, the luxury market and the local market. Like Hong Kong, Mainland Chinese buyers are the largest players in the luxury market and are bidding up prices at a ferocious rate,” admits Scarrow. “This includes former family neighbourhoods like Dunbar and Point Grey, which now boast ‘average’ prices well in excess of $2 million.” But unlike in Hong Kong, the local market can move, and has, “responded by moving east, with former low-end markets such as Main Street, and Commercial Drive gentrifying in order to accommodate local buyers,” who aren’t willing to leave town altogether. “Vancouver is a lifestyle city,” said Macdonald Realty’s Gregg Baker in a press release earlier this year. “It’s no secret that people like being here.”

 

From a 2010 edition of Hong Kong’s Square Foot Magazine.