BNN interview about the Vancouver housing supply problem

Business News Network (BNN) speaks with Jonathan Cooper, Vice President of Operations at Macdonald Real Estate Group about David Rosenberg of Gluskin Sheff + Associates comments on policymakers and housing supply constraints and how they would relate to the Vancouver real estate market.  What change are needed to address the Vancouver housing supply problem?

 

Best policy levers to address Vancouver’s housing supply constraints


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B.C. takes aim at shadow flipping in the real estate market

Business News Network (BNN) speaks with Jonathan Cooper of Macdonald Real Estate Group on the BC government’s new regulations aimed at what is called “shadow flipping”. While the aim is to further protect sellers in residential real estate transactions, just how much of an effect will this move have on the hot housing market?

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2015 charitable donation to local refugee centre | Macdonald Real Estate Group

Dear Friends, Clients, and Colleagues,

In lieu of cards or gifts this Christmas, Macdonald Real Estate Group (MREG) has made a charitable donation to the new Welcome Centre in East Vancouver, which is due for completion in the spring of 2016 to support the refugees arriving in British Columbia.

Refugees escaping war, famine and persecution will soon have help from a regional services hub in Vancouver—a one-stop housing and support centre. Immigrant Services Society of BC is building the new, first of its kind in the world, 58,000 square foot facility that will address the immediate needs of Government Assisted Refugees and immigrants in Vancouver. The New Welcome House will be a regional service hub bringing together a unique combination of transitional housing and targeted services under one roof to streamline access to care. For more information and to follow along with the construction please visit newwelcomehouseblog.org

Season’s Greetings,

Jonathan Cooper
Vice President, Operations
Macdonald Real Estate Group Inc.

 

About Macdonald Real Estate Group
Based in Vancouver, Canada, Macdonald Real Estate Group (MREG) has an annual sales volume of over $7 billion and over $2 billion in assets under management.  With more than 20 offices and nearly 1,000 staff and REALTORS®, MREG offers a full range of real estate services, including residential and commercial brokerage, property and strata management, project marketing, and the MREG Canadian Real Estate Investment Centre in Shanghai, China.  Macdonald Realty is the residential division of Macdonald Real Estate Group. For more information, visit www.macrealty.com.

 

Dispatches from China: The logistics of opening an office in China by Dan Scarrow


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Dispatches-from-China
I’m now in month 2 of a 4-month long assignment looking into the logistics of opening a Macdonald Realty representative office in China.

To recap, we have gone to China as a response to demand from our clients. We determined early on that we’re likely the only brokerage in BC that’s capable of supporting an economically feasible office in China due to our multiple lines of business: Residential Brokerage, Commercial Sales, Project Marketing for Developers, Property Management and Mortgage Financing. Having one or two of these capabilities would not be enough to sustain an office in China, but having all 4 means that Macdonald Realty and its affiliated companies – Macdonald Commercial, Property Management, and Platinum Project Marketing – can make it work.

In the first month after our arrival, the unexpected changes to the Canadian Investor Immigrant Program had a lot of people scrambling, trying to figure out what the impact would be for the Vancouver housing market. I must admit that I’ve changed my mind about how big the impact would be from Large to Minimal. The reason, as explained by some of our Immigration Consulting partners here in China, is that their wealthy clients are more interested in placing their children and a portion of their wealth outside of China than they are in immigrating themselves. Canada offers a perfect solution for this through student visas for children and an accompanying 10-year multiple entry visa for adults. These immigration consultant partners are fairly confident that many of their clients will choose this route and continue to invest in Canada and British Columbian residential and commercial real estate.

Another issue that we’ve had to deal with is representative fraud. This is something that is quite common and widespread in China and only recently has it made its way over to Canada. We have now verified 3 cases of individuals who have fraudulently claimed to be the Canadian representative of a company in China, and we have several other suspicious incidences to follow up on. The cases seem to follow the same pattern: an individual claims to be the representative of a large Chinese company, he/she knows a lot about the company or a decision-maker in the company but most of the information can be found online, and the individual tells us not to contact the decision-maker back in China because they are ‘very busy’. Through the BC Trade Office here in China, I’ve been able to get a hold of the Chairmen of several of these companies and most of them (though not all) have denied having any sort of official representation in Canada. This is just another area where having ‘boots on the ground’ can help.

Moving forward, this month’s task is to determine and solve the logistical, legal, and administrative challenges of opening an office in China. This is one of the biggest hurdles for Canadian companies and is one of the main reasons why so few have set up shop in the country.

As an aside, I recently made a side-trip to Taiwan to learn about the state of the Taipei real estate market. Much to my surprise, I found that housing prices in Taipei are much higher than in Vancouver and their wages are significantly lower. This goes to the heart of the paradox that we’ve been faced with in this business for several years now: Vancouver house prices, wages, and housing affordability. The oft-cited Demographia study is often twisted in Vancouver headlines as being a study of all markets around the world, when in actuality it only covers 9 (mostly western) countries. It explains the paradox of why Canadians often think that Vancouver is so expensive while our Chinese clients continually tell us how cheap Vancouver is. I certainly can’t explain to you how the economics of Taipei’s real estate market work, I can only tell you that they do. And if Vancouver is the most Asian city outside of Asia, it certainly lends credibility to the theory that Vancouver house prices may still have some room to grow.

Regards,

Dan Scarrow
VP Corporate Strategy
Macdonald Real Estate Group

Dispatches from China
Dan Scarrow is Vice President of Corporate Strategy at Macdonald Realty.  A second generation Chinese Canadian with fluency in Mandarin, Dan will be spending several months in Shanghai investigating the opportunity to open a Macdonald Realty rep office in China.  Dan will be sending monthly dispatches with stories from his experiences in Shanghai.

Based in Vancouver, British Columbia, Macdonald Realty has 20 offices and 1,000 staff and Realtors, and offers a full range of real estate services across the province, including residential and commercial brokerage, property and strata management, and project marketing.

For more information contact Macdonald Realty at 1-877-278-3888

Macdonald Realty Wins “Most Outgoing International Referral Closings” Award

We are pleased to announce that for the second year in a row Global Alliance Award for “Most Outgoing International Referral Closings” by Leading Real Estate Companies of the World. Being up against 500+ Leading Real Estate members with over 120,000 sales associate in 40+ countries around the world this is a significant achievement for our Referral Department.

Congratulations to Macdonald Real Estate Group Referral Department for a job well done!

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Thank you to Jonathan Cooper for accepting the award!

For more information on the Referral program or to place an outgoing referral please contact our award winning team at 1-877-278-3888.

Dispatches from China by Dan Scarrow


Dispatches-from-China
Greetings from China.

As explained in the Globe and Mail, I have been in Shanghai for nearly a month to explore the feasibility of opening a Macdonald Realty rep office in China. For the past few years, we have received consistent feedback from our clients asking us how they can access the Chinese market. This is our response to customer demand. Our firm has a large residential presence, along with a separate property management and commercial brokerage division, and a project marketing division so our office in China would look for investors in all three areas: residential resale, commercial properties, and new home construction. We’ve received considerable feedback from homeowners, commercial property owners, and developers who all wish to market their properties in China to Chinese buyers.

I believe we are uniquely positioned to attract investment back to BC because of:

  1. Our focus on this province
  2. The fact that we are BC’s only truly full service corporate real estate company
  3. Our knowledge of the Chinese market

Because our focus is on British Columbia, the goal of our Chinese rep office is to encourage investment back into British Columbia so our clients can be assured that they receive the widest exposure to potential buyers, be it residential, commercial, business, or new construction. Some of Vancouver commercial firms have licenced affiliations with Chinese offices, but the focus of those offices is on building business for China, not Western Canada.

A Chinese rep office is only viable because we are a truly full service corporate real estate company. A few larger local developers have some presence in China, but their focus has been solely their own projects and the results have been decidedly mixed. Our hope is that by combining all of our lines-of-business we will be able to provide the one-stop-shop for investors to look into all British Columbia real estate.

Finally, Macdonald Realty and its affiliated companies have an unparalleled knowledge of the Chinese market. Our owner, President and CEO Lynn Hsu is a first-generation Chinese Canadian who has already accrued a hefty list of Canadian business accolades. I was sent back to China to explore the possibility of an office because of my relative fluency in Mandarin and my cultural understanding from growing up in a mixed Chinese-Canadian household. As a company, we’ve been very successful at luring investment into BC from top Chinese companies and businesspeople, partly because a number of our company’s key staff have in-depth knowledge of BC real estate products and who can speak comfortably to these investors in their own language.

On a more personal note, China has been every bit as interesting as I thought it would be. I’ve been in Shanghai for most of the time I’ve been here, but I expect to go to a few secondary and tertiary cities in the near future (Beijing, Guangzhou, Chongqing, Hangzhou, and Qingdao are on my to-do list). The pollution has been noticeable, but not terrible so far. I’ve heard reports that recently Beijing and other northern cities have experienced terrible smog, but I haven’t been restricted in my movements thus far. That said, you can definitely see the difference between an Air Quality Index 50 day vs. 250 day:


Shanghai_smog_photo
For those who have never been, Shanghai is an extraordinary place that is relatively friendly to tourists. It’s transportation system is incredible, with the Metro alone moving 2.5 billion people annually. Rush hour is a sight to behold, both due to the sheer number of people moving through the system as well as how efficiently it does so. While the city is enormous, the main downtown area is quite manageable. I liken it to New York City: if you ever wanted to explore the whole metro area, it would take you forever, but Manhattan can be understood in only a few days. Same thing with Shanghai. A word of caution though, this area of Shanghai is not at all representative of China. As one expat told me: “Living is Shanghai is really fun, but if we were living in any other city in China, we wouldn’t last very long.”

I suppose that’s why they all want to come to Canada.

My plan is to be in China until the end of May, and I look forward to giving you updates of our progress.

Regards,

Dan Scarrow
VP Corporate Strategy
Macdonald Realty

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Dispatches from China
Dan Scarrow is Vice President of Corporate Strategy at Macdonald Realty.  A second generation Chinese Canadian with fluency in Mandarin, Dan will be spending several months in Shanghai investigating the opportunity to open a Macdonald Realty rep office in China.  Dan will be sending monthly dispatches with stories from his experiences in Shanghai.

Based in Vancouver, British Columbia, Macdonald Realty has 20 offices and 1,000 staff and Realtors, and offers a full range of real estate services across the province, including residential and commercial brokerage, property and strata management, and project marketing.

For more information contact Macdonald Realty at 1-877-278-3888

2014 charitable donation to InspireHealth and the BC Cancer Foundation | Macdonald Real Estate Group

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In lieu of cards or gifts, Macdonald Real Estate Group will be financially supporting cancer research and patient care through the BC Cancer Foundation and InspireHealth.

InspireHealth is a BC not-for-profit which provides integrative care for individuals with cancer.  Their team of doctors, nutritionists, counselors, and exercise therapists focus on the spiritual, emotional, and physical health of patients as they go through traditional cancer treatments like Chemotherapy.

InspireHealth’s cancer care model serves to complement standard cancer treatments.  It helps prepare the individual for the anxiety and emotional complexity that can be major factors when facing a life-threatening illness.  While the cancer itself is treated, InspireHealth ensures that other aspects of the patient’s health – like diet and exercise – are supported.

If you would like more information about InspireHealth you can visit their website or Shelley Ross at sross@inspirehealth.ca.

Sincerely,

Jonathan Cooper
Vice President, Operations
Macdonald Real Estate Group

Macdonald Realty Awarded at the 2013 LeadingRE Annual Conference

We are pleased to announce that Macdonald Real Estate Group won the Global Alliance Award for Most Outgoing Referrals presented by Leading Real Estate Companies of the World® (LeadingRE). It is a significant achievement for our Referral Department as this year we were up against 600+ LeadingRE members with over 140,000 sales associate in 30+ countries around the world.

Congratulations to Macdonald Real Estate Group’s Referral Department for a job well done!

For more information on the Referral program or to place an outgoing referral in over 30 countries, please contact us at 1-877-278-3888.

Why Macdonald Realty is exploring opening an office in Shanghai, China | Inman

After 70 years in business in British Columbia, and much consideration and analysis, Macdonald Real Estate Group has decided to explore opening an office in China. To that end, my colleague, Dan Scarrow, our vice president of corporate strategy, left for Shanghai early in February.

In order to understand our rationale, it is first important to appreciate how Chinese investors have shaped the real estate market in Vancouver, B.C., where our company is headquartered.

Over the past three decades, Macdonald Real Estate Group has assisted thousands of Asian families and investors in real estate transactions in the Vancouver area and across western Canada. In the 1980s and ’90s, there were overlapping waves of Hong Kong and Taiwanese investment, and more recently we have seen the mainland China wave.

Our experience has given us the chance to develop a sizable network of Asian clients, both commercial and residential.

While the official percentage of foreign buyers in the Vancouver area is around 3 percent, Chinese clients make up a much higher proportion of certain segments of the market. The exact percentage is hard to pin down, but our research would indicate that Chinese families account for at least 50 percent of Vancouver home sales over $3 million, and our commercial division has put together dozens of major transactions with Chinese investors on a range of commercial real estate asset classes.

Asian clients are not arbitrarily choosing Vancouver as a destination for real estate investment. Our Chinese clients generally have close family and business ties to the areas in which they invest.

For example, aside from business considerations, the primary factor in shaping immigration-related real estate decisions for Chinese families will be proximity and availability of educational opportunities for the next generation.

Aside from business considerations, the primary factor in shaping immigration-related real estate decisions for Chinese families is educational opportunities for the next generation.””
That said, these clients often maintain a foothold in their country of origin, where they often have ongoing commercial interests.

If we open an office in Shanghai, we will be better able to serve our clients who are based in China, or who those spend significant time there. They will have somewhere to go to review documents, and get insight on real estate issues.

In addition, having a presence in China will give us another channel for promoting real estate opportunities.

I will be providing periodic updates to Inman as we go through our due diligence in Shanghai. Hopefully you can find something in our experience that is useful to you in your business, or at the very least you can enjoy watching the process unfold.

Jonathan Cooper is vice president of operations at Macdonald Real Estate Group (MREG). Based in Vancouver, British Columbia, MREG has 20 offices and 1,000 staff and Realtors, and offers a full range of real estate services across the province, including residential and commercial brokerage, property and strata management, and project marketing.

This article was originally posted on Inman News, Feb 21, 2014.
View the original post at Inman News

For more information contact Macdonald Realty at 1-877-278-3888

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