Second home away from home
A second home might not be high on everyone's list of priorities in the present economic climate, but for those who are in the market, British Columbia and its largest city, Vancouver, stand out. Chinese investors, in particular, are strongly represented among foreigners buying in the westernmost province of Canada.
'The demand from Chinese investors is the strongest it's ever been in Canada,' says Simeon Garratt, head of Asian business development at Key Marketing Group, known as The Key.
'Right now, around 80 per cent of all real estate sold in Vancouver is to Chinese/Hong Kong buyers, and it doesn't look like it will be slowing down. It's just a matter of what location they will buy in. Demand has been growing over the past few years, but the explosion has really come from media exposure and a sudden emphasis on this market.'
Location-wise, buyers are spoiled for choice. As noted on the website, www.luxuryportfolio.com, property in British Columbia spans the gamut from luxurious mountain estates in Whistler, to vibrant metropolitan condominiums in Vancouver. Just a few miles west of Whistler - home to the world's largest ski resort - waterfront homes run up and down the northern Pacific. The capital city, Victoria, has many chic contemporary condos, and waterfront and country properties.
Garratt says it's not surprising the top-performing real estate agents in British Columbia hail from Hong Kong and the mainland. The Key organised a helicopter tour for eight of them in February to showcase new projects.
'These realtors represent large networks of Chinese buyers and, in many cases, are the eyes and ears of Chinese buyers who cannot make it to Vancouver to see the properties for themselves,' he says.
The tour was mainly to showcase the coastline from Richmond to White Rock. 'We are currently selling a brand new high-rise development and wanted to show Chinese buyers how close White Rock is to Richmond, and the scenery and location. This was the first tour of its kind.'
According to Cam Good, president of Key Marketing, the Chinese love the political and economic stability Canada offers. 'We have a good education system, too, which is why so many mainland Chinese send their children to school here. We also have a large and well-established Asian community, free health care, security of investments, and offer the ability to gain permanent resident status.'
Good says that in recent months his company has sold more than 500 condos in Vancouver and Toronto to Chinese investors. He believes this latest push from the mainland is contributing to residential price increases, which rose an average 15 per cent in the 12 months to March, according to data from the British Columbia Real Estate Association.
Dean Linnell, of Dean Linnell Personal Real Estate Corporation, a Whistler specialist, adds that another draw is the absence of restrictions on foreign ownership of property in Canada. 'There are certainly some tax considerations that need to be taken care of, but we have knowledgeable accountants here who keep our clients abreast of the non-resident taxation issues that need to be handled - there's nothing out of the ordinary, though.'
He says many Hongkongers find Whistler is better value than other mountain resort locations. 'If you compare the type of big mountain, outdoor experience you get here, coupled with what you get in terms of property for the dollar, there's just no comparison to a Vail or an Aspen. There's big perceived value here.'
Whistler properties include ski-in/ski-out condos and townhouses, chalets, land and even quarter-ownership properties. Another popular alternative is condo ownership in one of the flagship hotels in town, such as The Westin, Pan Pacific or the Four Seasons Resort, that can be rented to hotel guests when not in use.
'Much of the Hong Kong ownership here is centred around condo or townhouse ownership because it's a pretty simple and turnkey way of getting into the market,' Linnell says. 'There's no upkeep needed as the homeowner association takes care of that. If you plan to do nightly rentals to derive some income from your investment then you also have a property manager who handles the rentals and takes care of the suite's interior.
'It's a worry-free investment for the most part. Having said that, though, condos are not always everyone's cup of tea, so we also have a healthy range of Hong Kong clients who own multimillion dollar luxury chalets. It depends what your idea of a dream mountain hideaway is.' Linnell adds that prices have come down significantly from the highs of 2005/2006. 'Much of the Whistler market is down by as much as 30 per cent. It does seem over the past three to four months, however, that pricing has stabilised and we just might be at the bottom of the market right now. It's truly a great time to be a buyer here, with sellers very motivated at the moment.'
As for Chinese interest in British Columbia, Good doesn't see demand slowing down any time soon. 'Given the sheer amount of money and buyers that exist in China, I believe we've only seen a small portion of what is to come,' he says. 'This, coupled with the fact that the Chinese government is tightening up on local real estate policies, means that more people are going to be looking at the international option.'