LUNAR NEW YEAR AN OCCASION THAT MAY PRESENT REAL-ESTATE OPPORTUNITIES
February 12, 2015
Vancouverities parse real estate statistics like baseball fans studying earned-run averages and scoring percentages. Monthly, quarterly, and yearly reports blare out from newscasts and become fodder for non-stop online and coffee shop chatter.
Everyone asks: “Will the bubble burst?” “What will interest rates do? “How many foreign investors are there in my building?” “Can our kids afford to live here?” “Can you believe what that house down the street sold for?”
And, though they might not admit it, many Vancouver real estate observers also wonder: “What does Bob Rennie think?”
Each spring, in fact, hundreds of planners, developers and agents pay good money to hear his fabulously entertaining presentation for the Urban Development Institute — backed with plenty of stats from his Rennie Marketing Systems’ research department.
Even for the ever-optimistic Rennie — that is his job, after all — 2014 was a pretty great year. “We started off predicting that we would sell 1,300 new homes — and partway through the year, adjusted that figure upwards to 1,600. By year’s end, we had closed the year out with 1,880 sales.”
At a time when being a “millionaire” still carries some status and cachet, the fact is that the average detached home in Greater Vancouver is now over $1-million mark.
And according to Rennie, many of those homes are owned mortgage free by baby boomers, most of whom will cash out the family home. According to Rennie, there is over $163 billion in mortgage-free property in Greater Vancouver. “This is tax-exempt capital that will flow to new home purchases. These parents will downsize and promptly assist their children with their first-home purchases. Our research shows that up to 40 per cent of first-time homebuyers are relying on assistance from parents or grandparents.”
Rennie Marketing Systems’ head office is in the heart of Chinatown in one of Vancouver’s oldest and most historic buildings. Rennie’s thoughts on immigrant investment are similarly pithy, and he brings up the recent demonstrations in Hong Kong as an example. “First the money comes, then the people come. Whether it’s China, Russia, or any other country where people fear forfeiture of assets and government intervention, Vancouver offers a stable investment climate and governance. Over time, there will be new solutions for foreign immigration issues. We live in a global society now.” Rennie downplays the importance of Lunar New Year as a real estate buying tradition. “I think you have to be respectful; people are mostly here to visit friends and family. I will say, though, that there will likely be Chinese parents visiting their sons and daughters who attend UBC and they might be looking for opportunities out there. People have more time on their hands over the holidays; we sold 47 homes over the Christmas period in Vancouver.”
Dan Scarrow of Macdonald Realty opened up an office in Shanghai in 2014 to assist Chinese buyers and investors interested in Canada. “I would say that the luxury condo market has been strong, but stable for several years now,” he says. “Developers have been fairly good about responding to a strong market by building more [units], which has meant that prices for condos and townhomes haven’t risen as quickly as those for single-family homes, of which there is no more supply.”
“Sometimes, it takes an outsider to appreciate what a neighbourhood can become. That was certainly the case in both Coal Harbour and Yaletown. I think the Richmond waterfront has that same long-term potential. River Green is one of Canada’s largest development projects. Aspac Developments, who transformed Coal Harbour 20 years ago, is behind River Green and identified it as a prime site due to its proximity to the airport, Vancouver and local amenities like the Olympic Oval, as well as its waterfront location and incredible views of the North Shore mountains.”
Bob Rennie agrees. “We are located in the heart of Chinatown, but really, Chinatown was hijacked by Richmond 20 years ago. The downtown Chinatown will have to change with the times, but sometimes Vancouverites are very resistant to change.”Back