Vancouver home prices are ridiculous, unlike concerns about mainland Chinese money
There’s no better advertisement for Vancouver than mayor Gregor Bethune Robertson.
Like his city, Robertson is laid-back, generally scandal-free and extremely picturesque. Regarded as the most handsome politician in Canada, Robertson is testament to the rewards of clean living, having made a politically correct fortune with his Happy Planet organic juice brand.
In short: He’s no Rob Ford.
So it’s little surprise that Robertson turns out to be a pretty awesome diplomat, too. A relative of Chinese revolutionary hero Dr Norman Bethune, Robertson was in Hong Kong last week where he brushed off suggestions that mainland migration might be to blame for Vancouver’s stratospheric property prices. He told the SCMP the assertion was “ridiculous”, adding that mainlanders brought a “great influx of talent and culture”.
There’s no unassailable proof that mainland money fuels Vancouver home prices, mainly because Canada provides no data on foreign property ownership.
However, there’s enough statistical and anecdotal evidence to make a strong case. It’s far from a ridiculous assertion.
The most comprehensive look at the phenomenon was undertaken in 2011 by Landcor Data Corp, which went through every sales document for luxury properties sold the previous year to find buyers with Chinese names spelt only in mainland fashion, with no Westernised names. The luxury threshold was set at C$3 million for houses in Vancouver’s premier Westside district, and C$2 million for apartments in the satellite city of Richmond.
The methodology was imperfect, but its results? Astounding. Seventy-four per cent of all buyers fit the mainlander profile. And lest it be thought that the “luxury” benchmarks were particularly rarefied: The current price for a typical Westside house is C$2.1 million, making Vancouver the second most unaffordable market in the world, according to the Demographia* study of 378 cities in nine major markets, behind only Hong Kong.
Julia Lau, a leading Vancouver real estate agent, told me this year that 80 per cent of buyers were mainlanders. She saw no downside for long-term locals, who could cash out and retire. “I see a lot of [local] people here who bought in West Vancouver a long time ago, they can sell for a lot of money and move somewhere else outside Vancouver,” she said.
Compared to Hong Kong, roiled by talk of locusts and Chinese hot money, there’s been little backlash or even discussion about this phenomenon in Vancouver.
One of the few voices actively raising the subject had been Vancouver Sun columnist Douglas Todd, an eminent writer on diversity and spirituality.
“It is mostly a mystery to me why more people in the Canadian media do not look more closely at how high immigration and foreign ownership affect the property market,” Todd told me. “That said, journalists are like most ‘nice’ Canadians and are very fearful of offending any ethnic or immigrant group.”
He went on: “I occasionally get accused of writing articles in which hyper-vigilant people say they detect an ‘undercurrent of racism’. They say ‘undercurrent of racism’ because they can't find any actual racism, because it's not there.”
Urban planner Andy Yan has also tried to examine the issue. “It’s difficult to get into it without the risk of the conversation getting ugly,” he said. “There is a reluctance to address it, but the main problem is a distinct lack of data.”
Yan has used proxy measures [such as examining the mailing addresses of property-related documents] to try to gauge foreign ownership levels and said he would not be surprised if mainland money was driving the market. “If you look at housing costs in the premium market, in the luxury neighbourhoods, they don’t come close to reflecting [how much lower the] levels of income are in Vancouver.”
Despite his work being hampered by the failure to provide foreign ownership data, Yan is nevertheless wary of how the discussion could develop. “Perhaps [the data should be released], but also we need to ask, what do you want to accomplish? What are our real goals? And how does this result in building better cities?”
[*this story has been updated to include a link to the latest Demographia study and to describe its scope]
The Hongcouver blog is devoted to the hybrid culture of its namesake cities: Hong Kong and Vancouver. All story ideas and comments are welcome. Connect with me by email firstname.lastname@example.org or on Twitter, Ian Young@ianjamesyoung70