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Posted September 16th, 2012 in Real Estate, Real Estate Stuff | 
Commentary in recent months ask if the slowing of Vancouver real estate sales is due to the disappearance of Chinese buyers. Patrick Chovanec’s view suggests that they are having money problems.
Extended translation – no cash for high priced Vancouver homes.
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it is unlikely the ‘Chinese Invasion” was ever much more than realtor hype. Remember the ‘planeloads of Asian buyers” supposedly circling Vancouver last year ? It was all bull crap. The music has stopped and now everyone is looking for a chair……..
Yup – fairly simple actually – the rest of the world (i.e. China’s customers for their exports) are going through the worst worldwide recession and financial crisis since the Great Depression – so of course China’s economy is going to get hammered which will constrain the “rich” in China as their profits and capital get likewise eroded….not rocket science, not surprising…there is “no free lunch” as one economist said a long time ago. The only debate is how serious will be the consequences (i.e. for Vancouver house prices): “just” -25% or -50% to -75% like what happened in several US cities and many other countries.
@form man
“it is unlikely the ‘Chinese Invasion” was ever much more than realtor hype”
awfully sure of yourself methinks
@vanpro
75%!??
- Why not just make it 100% and get on with it.
Money from mainland China may have played a small role in driving up prices in a few small selected areas for a short time. The idea that Vancouver would be over- run with mainland Chinese with bags of cash made for a great fable to keep the party going. Reality is now quickly putting that fable to rest. The math of supply and demand is quite simple. The Vancouver market is over supplied and true demand has long since been satisfied. Within the next 12 months we should get a more accurate picture of just how badly the market has been overbuilt…………..
Larry: while -75% is least likely, just think about how crazy our prices are right now: -75% drop from peak avg SFH price of approx $1.3M still results in avg price of $325k which is on par w/ current Calgary/Edmonton and more than double the current avg price of a SFH in the US….Yes, least likely, but 60%-75% drops have occurred in extreme bubble cities in the rest of the world….it all depends from which height you are starting and there “ain’t no mountain higher than” Vancouver’s right now….
Larry, I’m sounding like a broken record here – what happens in China no longer matters. Canada’s “INVESTOR IMMIGRANT PROGRAM” is over for all but 600 of the earths residents annually. Only 600 rich people per year are allowed in under this program effective July 2011. There was never a limit before this was done quitely and not detected in main stream media. google the caps. I’ve heard estimates as high as 250,000 Asians are here under this program. I believe the Hot Asian Money theory WAS true until July 2011. And now they’re going to get sacked. Sad but true. how will 600 newcomers support the hundreds of thousands of houses? Has there not been any talk of this in the realtor scene?
@trashy
I have the same understanding however, you might want to check the rules in Quebec. I am under the impression it is still an open door.
re: talk – No! Some of us consult (read pay for lunch) with immigration lawyers to get the scoop.
I understood that the “backdoor through Quebec” closed a few months ago as well some time much later than July 2011
yattermatters Says:
September 16th, 2012 at 4:50 pm
@vanpro
75%!??
- Why not just make it 100% and get on with it.
^^^ why would 75% be so hard to believe? In just four years there are areas that have seen 50-100% growth. If it can go up that quickly, it can go down too.
@anon
you missed it!