In a Thursday (April 14) forum on global real estate investment, IMF Global Housing Watch director Richard Koss highlighted the role that major cities play in residential real estate, a sector that is rapidly emerging as a global commodity.
“The increase in home prices is modest in most countries. What's difficult is why are some markets picked more than others,” Koss stated, as quoted by CBC News
The joint panel organized by the Centre for Chinese Research and the University of British Columbia's Centre for Urban Economics paid particular attention to Vancouver, and how the amenities and environment in similar cities appeal to overseas buyers.
Geography professor David Ley pointed at the significant fraction of Chinese immigrants that became home owners in their first few years in Canada (85 to 90 per cent). Most of these buyers—who will spend an estimated $220 billion in foreign real estate by 2020—move to Canada because they want to avoid pollution and stringent anti-corruption campaigns in the mainland, Ley added.
Meanwhile, real estate developer Shao Long Li noted that real estate accounts for as much as 50 per cent of Chinese investment portfolios, far more than the 5 to 10 per cent in Western countries. Better prices also fetch a better home in Vancouver than in Shanghai.
Li said that Vancouver has a cosmopolitan ethos and a multicultural character, which—along with world-class education standards and quality of life—make a city a magnet for foreign capital. Furthermore, the generous exchange rate and the market scarcity strengthen the trend of price growth.
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The exceptional performance of Canada’s most active housing markets like Vancouver and Toronto plays a central part in attracting foreign capital, thus initiating a virtuous cycle of further investment and growth in these already dynamic areas.