VANCOUVER'S PROPERTY MARKET BECOMES INSANELY HOT

by Eddy Lok
VANCOUVER, April 29 (Bernama) -- Greater Vancouver has two faces: it is one
of the world’s most liveable cities, yet it is one of the least affordable.

Its appeal to both Canadians and foreign immigrants continues to push real
estate prices up, uncontrollably.

Coastal properties usually fetch princely prices and increasingly "Asian"
Vancouver, is no exception. All Vancouver homes fetch C$1 million or more today.

Home sales here have further strengthened, with buyers and sellers entering
the hot market at a record pace.

Among the most notable house buyers are wealthy Mainland China immigrants,
whose influx into this Pacific north-west of Canada, of late, has been singled
out for the spiralling prices.

There is ambivalence when it comes to educated Chinese with deep pockets –
they are loved by realtors and local home sellers for the high prices they
unhesitatingly pay, but they are loathed by other homebuyers who could not
afford the prices they pay.

Dan Scarrow, Macdonald Realty vice-president of corporate strategy, said the
market for luxury homes is now "insanely hot" with Mainland Chinese buyers
becoming the primary purchasers, especially in Richmond, near the international
airport.

"Activities in the housing market strengthened last month. Things are moving
very fast...over the last 12 months, there has been an appreciation of 5.4 per
cent (in property values). Looking at the price index last year, it would have
been C$30,000 higher," the President of the Real Estate Board of Greater
Vancouver, Rosario Setticasi, told Bernama.

In March 2011, there were 4,000 home sales, the fourth highest in the
history of Greater Vancouver, which includes adjoining cities of growing
Coquitlam, Richmond and Maple Ridge, nearer to the US border.

"When you look at listings, 6,800 homes were listed this March, which was
close to the record set in March last year and this brought the inventory up to
13,000 listings in Greater Vancouver. This was about 10 per cent higher last
month, and three per cent below March 2010," Setticasi said.

This region has a free open marketplace with prices largely dictated by
supply and demand "which has served us well and over the last 40 years, it has
always been on the upside, with fluctuations in early 1980s when prices
dropped," he said.

The City of Vancouver’s tagline found on all vehicle number plates is
"Beautiful British Columbia", reinforces that impression on visitors while real
estate agents trumpet that this is the best place to live, with the city
repeatedly being voted a "global best".

Unpolluted blue skies, scenic environment, friendly Vancouverites, excellent
health care, good education facilities and proximity to Asia, offer attractions
to Metro Vancouver's estimated 400,000 Chinese residents, who make up one-fifth
of the city's population, in addition to other ethnic groups like Indians and
Iranians.

But not everyone agrees with the rating. Vancouver, host of the 2010 Winter
Olympics, has a fair share of crimes. There have been many reports of drug
busts, gang wars, thefts and robberies. Some people even liken the increase in
real estate activity to drug money. There is also relatively high unemployment
here.

It is now a seller's market with sellers taking an average of only 36 days
to sell a listed home in March, which is six days less than in February.

"With springtime, things move really fast. There are good signs. When demand
gets stronger, as it is now, we will experience appreciation in property
prices," he said.

There is hardly any restriction placed on foreign property buyers here
unlike in Hong Kong, Brunei or Australia which place restrictions on foreign
ownership or requiring them to sell off their properties if they do not live
there and barring them from buying existing properties.

Within Canada, only Prince Edward Island, Manitoba, Saskatchewan and Alberta
have laws that restrict non-residents from buying land.

Vancouver had the world's least affordable housing market last year,
according to a report that also put the blame on urban land-use policies
designed to prevent urban sprawl.

A big number of homeowners are motivated to let go of their properties to
relish the high prices. This gives them an opportunity to move to less expensive
areas or they could be wanting to minimise loan amounts or use the money to buy
other things and retire, according to Setticasi.

A Demographia International report cited Vancouver, Victoria, Abbotsford and
Kelowna in British Columbia and Toronto as Canada's least affordable cities.

The five most affordable Canadian cities were Thunder Bay and Windsor in
Ontario; Moncton in New Brunswick, Saguenay in Quebec, and Saint John in
Newfoundland.

Peter Ladner, a former Vancouver City councillor who described the real
estate market as having gone out of control, raised the idea of foreign
ownership restrictions.

He had called for a debate on the issue and said that prices were forcing
people raised here to relocate and preventing others from moving to the area.

The buying frenzy makes Vancouver the third most unaffordable in the world
after Hong Kong and Sydney, based on household income and average house price,
according to Ladner.

"High house prices are some of the reasons why businesses are undermined.
The economy is undermined when housing prices get too high. People cannot afford
to do business and workers cannot afford to live here," Ladner told Bernama.

He blames the existing situation to people bidding up prices of property and
not living here, resulting in local people being pushed out of the market.

"I am thrilled prices are going up. I will benefit but my kids are horrified
every time prices go up, they have less chance of owning property.

"It is a bad system that enables the situation to get to a point where an
average working Vancouver resident cannot afford to live here. You cannot buy in
Vancouver just based on the working salary. The hardest hit are recent
immigrants who don’t have inherited wealth," he said.
-- BERNAMA