Asian influx may push prices higher
A STEADY influx of Hongkong and Taiwanese immigrants to Vancouver will help push many suburban housing prices higher this year, according to a recent Canadian Mortgage and Housing Corp (CMHC) report.
The report shows that prices in the popular Vancouver suburb of Richmond rose by 26 per cent last year, recording one of the largest price percentage increases in Canada.
The continuing flurry of sales is being directly attributed to immigrants from the territory, who now pay an average of about C$300,000 (about HK$1.85 million) to move into one of the area's new two-storey bungalows.
In addition to the Hongkong-style malls of the Aberdeen Centre and Parker Place, a new Yaohan department store and Taiwanese hotel and shopping complex will help establish Richmond's Chinatown as one of Canada's largest.
The airport suburb now boasts the largest Chinese Canadian population in British Columbia outside the city limits of Vancouver, and at roughly 40,000, comprises almost one third of Richmond's population.
An increase this year in applications for construction of single-detached houses and condominiums already made at Richmond municipal hall this month indicates the number of housing starts will continue to rise through the year.
The CMHC report shows that Richmond chalked up almost 3,000 detached and 2,500 condominium sales last year, 31 per cent higher than in 1991.
Canadian immigration officials estimate the number of Hongkong immigrants to Canada jumped by more than 40 per cent to about 38,000 last year, compared to 22,000 in 1991.
A large majority made applications to settle in the Vancouver area, Employment and Immigration spokesman Mr Phil Barter said.
''The trend of immigration from Hongkong and other parts of Asia will continue well into the 1990s,'' he said.
While real estate agents agree the Richmond market will continue to post impressive gains in the year ahead, they are beginning to point to newer destinations for immigrants from the region.
The newest suburb of choice is called Coquitlam, now known by some as goh guai lam, or, the place of elegance and high class.
With some houses still priced below the C$200,000 mark, realtors are calling for sales to spike by up to 20 per cent this year.
This compares to an average price increase of about 10 per cent for a house in Vancouver's city centre, now valued at roughly C$245,000.
Real Estate Board of Greater Vancouver statistics show the total of almost 39,000 residential unit sales last year eclipsed the previous record of 35,000 transactions set in 1989.
The board's president, Mr Satnam Sidhu, said he expected the 1993 market to continue along a similar path as last year, but only if the same conditions continue.
''The economy remains a major factor in the health of the real estate industry, as does the affordable interest rate of today,'' he said.
But he warned investors should not expect such huge returns this year, predicting more moderate price increases of between three and four per cent.
The CMHC report outlines how an expected increase in housing supply for the Vancouver area will take the pressure off the current inventory-to-absorption ratio, which, at about one-to-one as of December last year, was the lowest since 1989.
CMHC figures show that housing starts in British Columbia were up 22 per cent to 41,000 in December from 36,000 a month earlier, recording the largest starts of the year.
By contrast, Ontario reported one of the lowest levels of housing construction of the year, with new projects dropping to 42,000 units from 51,000 in November.
While sales in Ontario picked up in the last half of last year, prices made little, if any, gains as unemployment and recession continued to grip the local economy.
The newest housing phenomenon this year will be the introduction of the smaller 25.5-square-metre apartment, which Vancouver city authorities approved for development earlier this month.
With the previous minimum apartment size set at 29.7 square metres, tenants' rights activists argued the new ''sub-standard shoeboxes'' would resemble dwellings in Hongkong and Tokyo.
Casting his vote to allow such projects to proceed, Vancouver Mayor Mr Gordon Campbell said the units represented an opportunity for the city to offer a ''wider range of accommodation''.
After a raucous debate, the council voted in favour of developer Mr Henry Cheng's test case plan to build a lower-income, rental apartment block, featuring the smaller units.