In recent times, Vancouver has emerged as a popular destination for overseas property investors, especially those from mainland China.
Nearly one-third of buyers in Vancouver had some connection to China, Dan Scarrow of real-estate company Macdonald Realty told Canadian newspaper The Province.
Meanwhile, property prices have been on the rise in the city, putting strain on housing affordability for the locals.
Not surprisingly, there are reports of growing resentment against Chinese buyers in the Vancouver property market.
Now, we come to this question: Is there any solid ground to blame China buyers for making Vancouver properties unaffordable?
Bruce Langereis, president of Vancouver developer Delta Group, has challenged the notion of “Chinese buyers”, especially in the context of Vancouver where nearly one-third of its population is ethnically Chinese.
“There is much attention on Chinese buyers but many of us forget that these ‘Chinese buyers’ have been in Vancouver for a long time,” Langereis said.
According to the Calgary Chinese Cultural Centre, Chinese migration in Canada can be traced back to 1858 when the first wave of Chinese people came to pan for gold in British Columbia.
While “foreign money” is often cited as a major factor that drives Vancouver’s property prices, Michael Ferreira, a managing principal at consultancy firm Urban Analytics, has raised questions on who exactly would constitute “foreign investors”.
“Should we consider foreign buyers with local representation ‘foreign investors’? If their family spends some of their time in Vancouver, does that make them local residents or foreign investors?” he said.
“If you ask ten different individuals, you’ll probably get ten different answers.”
As the local government is not tracking where the buyers come from, Yves Tiberghien, director of the Institute of Asian Research at the University of British Columbia (UBC), believes the lack of reliable data partly fuels the debate on the “Chinese money” in Vancouver’s property market.
“Sometimes, we hear 80 percent of Vancouver homes bought by mainland Chinese, sometimes we read 35 percent, and sometimes we see an official number of 3-5 percent,” he noted.
“A big part of this spread is how you count mainland Chinese – whether one relative has permanent resident or not as opposed to whether they live here full time or not – and there has been no systematic data tracking foreign inflows into the real estate market.”
If the Chinese has been in the region for generations, and if the affordability question is nothing new to Vancouver, what might be worth pondering is why the community is only concerned about the “Chinese invasion” in recent years.
In fact, offshore investment from mainland Chinese buyers is not as dominant as it may seem, according to Delta Group’s Langereis.
Take the Group’s Private Residences at Hotel Georgia for example: only one-fifth of its buyers are from mainland China while nearly two-thirds are locals.
Even though some buyers are not locals, many bought the properties and live in the apartments from time to time, Langereis said.
“In my 30 years in real estate business, I have seen many examples of Asian buyers who buy the properties here to enjoy the lifestyle that the city offers. Vancouver is not necessarily a global economic center. But it is one of the most livable cities in the world,” he added.
Tsur Somerville, director, UBC Centre for Urban Economics and Real Estate, said the fundamental issue is not about foreign ownership, but occupancy. He also highlighted that property prices in Vancouver have always been higher than those in many other Canadian cities even before the immigration wave in 1970s.
But Somerville added that the influx of Chinese capital in recent years challenges how North Americans think about immigrants.
Between 2005 and 2012, according to Statistics Canada, 37,000 mainland Chinese millionaires immigrated to British Columbia through the now-defunct wealth-based Immigrant Investor Program.
As Somerville put it: “We are used to the notion of ‘immigrants’ referring to those who work their way up in the host country but not people who come and buy properties for their children.”
According to him, the resentment against the mainland Chinese also taps into the old school notion of Chinese invasion in North America, referring to the concern about the influx of labor from China in the 19th century.
Somerville recalled a similar period in late 1980s and early 1990s when a wave of Hong Kong immigrants came to Vancouver before the Asian city’s 1997 handover to China, and the local community was complaining about how these immigrants transformed the city.
“Over time when their kids grew up here and they became more integrated into the society, you don’t hear such complaints anymore,” he said, suggesting that time will also remedy the resentment against the mainland Chinese.