The report concluded that the heavy investment in Metro Vancouver won’t last forever, and even though some might consider it an “iron bubble,” it still could burst. “Iron bubbles can certainly burst, and the economic shrapnel could be painful,” said the 2011 Residential Sales Summary from Landcor.
Landcor connected much of the recent price increases to Westside Vancouver in luxury sales, where Chinese buyers have been heavily active. In 2008, in the area of Richmond and Westside, 32 of 69 buyers, 46%, had quintessential mainland Chinese names.
By 2009 it was 68%, and in 2010, 74% of buyers were likely from mainland China. Over that same period, the most expensive sale for the year rose from $10.5 million to $17.5 million.
“Although there’s ongoing and lively discussion about affordability in Metro Vancouver and the degree it’s affected by buyers from outside B.C., get used to it,” instructed the report’s authors. “It’s now part of the cityscape.”
Average single-family home prices in Greater Vancouver are up 12% in the first quarter of 2011 over the same period last year, according to Landcor, reaching $811,340 in March. Condos are up 4%, and attached properties up 1.1% over that same period, to $367,572 and $454,900 respectively.
But in other parts of British Columbia, there’s a much different picture. Okanagan sales are down by more than 30%, and condo prices are down 5% from last year in the first quarter, for example. Vancouver Island detached homes are down 2%, condos are down 4%, and attached homes down 5% during that same first quarter period.
Still, China is having a positive influence in areas outside of Vancouver as well in the province, said the report.
Capital investment in resource industries is proving increasingly a profitable trade for Canada with China. China has helped replaced some of the lost business from the U.S., said Landcor.
“More jobs at home means more homebuyers – and that’s good for B.C.’s struggling real estate regions,” the report said.
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