Rich foreign investors drive up home prices in Vancouver, locking out locals
Prices for homes have risen to an average of US$1m in a city where the average income is US$41,000, so many locals are excluded from market
Vancouver has become such a popular destination for overseas investment that locals can scarcely afford the price of an average house in the city.
And because many of the new flats in some areas are purchased by investors who then leave them empty, local businesses are having a hard time surviving.
On paper, Vancouver is not a wealthy city. But it is a city that is attractive to wealthy overseas buyers, mostly from mainland China, who are driving up prices. Unable to afford real estate, the locals are struggling, and the numbers tell the story.
The average selling price of a small house in Vancouver is more than US$1 million, according to the Royal LePage House Price Survey released in April. The average income in Vancouver is US$41,176 a year, according to the most recent figures. With that income, it's almost impossible to purchase a detached house.
Developer Thomas Fung, who built the Aberdeen Mall in Richmond, outside Vancouver, has major plans for more developments around Vancouver. He says overseas investors are driving the Canadian residential market, with buyers coming from China, Korea, the United States, the Middle East and Russia.
Investors are either securing their money in real estate for several years, or purchasing pre-sale properties and flipping them for tremendous profits. He has an office and retail project under construction, and already has had several of the pre-sale purchasers flip their spaces for around 50 to 60 per cent profit.