• Thu
  • Dec 18, 2014
  • Updated: 7:54am
The Hongcouver
PUBLISHED : Wednesday, 02 July, 2014, 2:44pm
UPDATED : Thursday, 03 July, 2014, 10:57am

Sister act: Fake Chinese buyers distract from reality of Vancouver’s housing market

BIO

Ian Young is the SCMP's former International Editor. A journalist for more than 20 years, he worked for Australian newspapers and the London Evening Standard before arriving in Hong Kong in 1997. There he won or shared awards for excellence in investigative reporting and human rights reporting, and the HK News Awards Scoop of the Year. He moved to Canada with his wife in 2010 and is now the SCMP's Vancouver correspondent.
 

One of the sorrier sagas involving Vancouver’s obsession with the housing market has drawn to a close, with the Real Estate Council of British Columbia (RECBC) handing down a modest punishment for last year’s use of fake Chinese buyers to drum up sales of a condo development.

Savvy consumers might be used to keeping an eye out for Chinese fakes - but fake Chinese?

The story dates back to February 9 last year, when two young women were introduced to reporters as Chinese sisters “Chris and Amanda Lee” who were supposedly checking out an apartment in the downtown Maddox development for their mainland parents to buy. The pair subsequently featured on two TV news reports, which used them as case studies for the proposition that Vancouver real estate could expect a boost from Chinese investors who supposedly favoured the Lunar New Year period as an auspicious time to buy.

Said “Chris Lee” on CTV: “If we like this place, we have to tell [our parents] and they make the decision. Yes, really, Chinese people like to buy during this time [Chinese New Year].”

The trouble was that Chris and Amanda Lee weren’t sisters, weren’t from China, and weren’t looking for an apartment to buy.

In fact, the pair were local employees of MAC Marketing Solutions, which was selling the Maddox project. MAC executive Nicolas Hans Jensen quit after the scam was revealed by the anonymous real estate blogger, the Rainforest Whisperer.

The RECBC last Thursday announced the results of its investigation into the deception. Jensen was found to have committed professional misconduct by allowing his staff to make false or misleading statements. Jensen, who now works for Onni Realty, was suspended for two weeks, ordered to complete a training course and fined C$1,250.

That hasn’t satisfied the Rainforest Whisperer, who reasonably asked why other MAC staff implicated in the scandal, including the “Lee sisters” and another employee who appeared on camera apparently pitching the Maddox to them, haven’t been investigated.

This tawdry incident raises other serious points.

It was used by some commentators as evidence that the notion that foreign money was propping up Vancouver home prices was, in fact, a myth dreamed up by unscrupulous real estate marketers. Similarly cited: The near-legendary effort by a real estate marketer who loaded what he called a “select group of Chinese realtors” (and a local TV crew) into a helicopter for an aerial tour of purchasing prospects . The passengers were actually local Vancouver real estate agents.

Such stunts make it easy to decry the foreign-money theory as a fraud, especially when combined with the oft-quoted statistic provided by the BC Real Estate Association, that only 1-4 per cent of Vancouver’s sales are made to “foreign investors”.

But to do so ignores a very real body of evidence: The extremely close correlation between international immigration and Vancouver prices, the fact that 74 per cent of luxury buyers in 2010 had mainland Chinese names, and the sheer volume of  rich immigrants who have flocked to the city in the past decade.  More than 40,000 millionaire migrants have moved to Vancouver since 2004, 80 per cent of them Chinese.

As for the BCREA’s 1-4 per cent stat, that’s easy to knock down. It applies only to non-resident foreigners and thus excludes all immigrant buyers.

It’s therefore important to differentiate between the mythical proposition of non-resident Chinese “investors” celebrating Lunar New Year by buying apartments or swooping down in helicopters, and the rather simpler, statistically sound, reality: That tens of thousands of rich immigrants, mostly Chinese, have recently moved to Vancouver and are using their foreign-acquired funds to buy homes, thus fuelling the city’s chronic unaffordability.

Understanding the distinction is crucial before Vancouverites decide whether, and how, to respond to the situation.

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 ian.young@scmp.com or on Twitter, @ianjamesyoung70

Correction: A previous version stated Omni Realty. It should be Onni Realty.

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This article is now closed to comments

johnyuan
Do you think news reporting in SCMP’s Property is real? There are no property ads and how do you think SCMP support the Property with staffs writing daily? Must mostly infomercials? Dishonest and disservice to SCMP’s readers.
.
The day when Property is drop it will be a day Hong Kong truly liberated from slavery over its property culture. At least we don't need our 'sister act' in real estate in Hong Kong.
bloo@cirrealty.ca
Do you believe these happenings also occurred in the City of Calgary, in the province of Alberta, Canada in the last few years? The rumour did spread that it did happen. It might have happened back to years ago, as people simply did not pay attention to it. What about other cities in the rest of Canada, imagine!!!
Billy Lo
pl2011scmp
If one realty agent tells the seller how much he can ask for one listing. The others follow suit.
This created bouts of price increases in the Canadian Market during last year. The prices are out of reach of a lot of working locals. I wonder if there is so much hot money from abroad or the property firms are buying the inventory themselves waiting for buyers to come to give them the margin or, the sold sign on the advertisements were lies to heat up the market.
 
 
 
 
 

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