China factor hits high-end real estate properties
While an immigration expert says foreign investors are fleeing the market, one local realtor counters that view and says home like this luxury pad in West Vancouver continue to be snapped by Chinese buyers. (PHOTO SUBMITTED)
Chinese investors are cooling on Vancouver real estate, leaving luxury homes languishing on the market, which some experts say will lead to downward pressure on prices overall.
"The bottom has fallen out of Vancouver's high-end homes," according to immigration expert Richard Kurland. "When you have the high end blown apart, people who would buy a house for $2 million now wait. That has a cascading effect. That keeps trickling down. If that trend continues you will see $800,000 down to $600,000 and down and down."
Kurland said foreign investors are fleeing the local market because the Canada Revenue Agency is on the verge of cracking down on overseas tax reporting and the Canadian government is seriously looking at 400 Chinese fugitives living in the country and attempting to send them home by July.
This has led to a decrease in demand for high-end homes, he said.
By example, one home on Vancouver's west side has seen its list price plummet to $4.5 million from $7 million five months ago.
The bust, however, has not hit West Vancouver yet, according to Clarence Debelle.
The realtor specializes in selling to buyers from China and noted 13 of the last 16 homes that sold for more than $3 million in the swanky British Properties since last September were purchased by Chinese buyers.
"I believe we are going to see continued Chinese buying sustained for the next three years. They are here today and they will keep coming," he said.
Canadian Real Estate Agency numbers released Monday reported the average price of a home in Canada in March was $369,677, down from $371,591 a year previously.
The average Vancouver home was $761,742, down from $786,311 in March 2011.