B.C. real estate firm looks for luxury buyers in China

[Gululu]

B.C. real estate firm looks for luxury buyers in China

Sales of high-end properties are on the upswing in the Vancouver region, spurring one of British Columbia’s leading real estate firms to search for wealthy buyers by setting up shop in China.

Dan Scarrow, vice-president of corporate strategy at Macdonald Realty Ltd., said he has heard enough anecdotal evidence of well-heeled home buyers with roots in China to make it worthwhile to invest in a Shanghai office.

In February, Mr. Scarrow will start the first of two three-month assignments in 2014 in Shanghai. After his fact-finding mission, he plans to hire Mandarin-speaking staff in China to keep the overseas branch office going.

While real estate experts have estimated the proportion of foreign buyers in the Vancouver region’s housing market at only 1 to 3 per cent, Mr. Scarrow said if the statistics were to include recent immigrants with origins in China, the influence of rich Chinese buyers would be greater, especially on single-family detached homes in pockets of Vancouver’s West Side.

Most high-end transactions occur on Vancouver’s West Side and the Municipality of West Vancouver. In the luxury market, there were 644 properties that sold for $3-million or higher in the Vancouver area last year, up 47 per cent from 439 homes that traded hands in 2012, according to data compiled by Macdonald Realty. Of homes that sold last year, there were 148 that fetched at least $5-million, compared with 107 sales in that category in 2012.

Mr. Scarrow said it is hard to determine how many of those elite sales went to recent immigrants from China, noting that the ripple effect due to an influx of new money can easily be exaggerated. Still, he believes the proportion was significantly higher than 3 per cent last year.

“There isn’t this wave of offshore investors with no ties to Canada who are coming in to buy, but the genesis of their wealth is from mainland China,” said Mr. Scarrow, a Canadian who speaks Mandarin fluently. “Most of these people land in Canada first as investor-class immigrants.”

He dismisses tales circulating of wealthy offshore buyers snapping up Vancouver properties sight unseen as false, emphasizing that he will instead seek to nurture a market in which China-Canada family ties are crucial.

The 30-year-old Mr. Scarrow said that as a product of a mixed-race marriage, he is acutely aware that the issue of foreign shoppers is a sensitive one in British Columbia. “The perception among some sellers is that mainland Chinese money is driving the luxury real estate market here,” he said.

But Mr. Scarrow cautions homeowners against hiring real estate agents based only on ethnicity, stressing that the best representatives know Vancouver’s neighbourhoods well, no matter what their race.

Mr. Scarrow’s mother, Lynn Hsu, moved in 1979 from Taiwan to Vancouver. Ms. Hsu is the president and majority owner of Macdonald Realty, which has more than 1,000 real estate agents and staff across British Columbia. Her ex-husband, Peter Scarrow, is a lawyer who has worked in Asia for the past dozen years, including advising wealthy Chinese on Canadian immigration and tax rules.

Dan Scarrow said there will be opportunities to tap into the Chinese market during his stay in Shanghai. Besides seeking contacts who are interested in single-family residential properties, he will be on the lookout for investors in Vancouver’s commercial real estate market and also new condo projects.

[shawnly1000]

lol...all I got from this was another real estate pump article in main stream media


also, there's already an active real estate thread

[duc_evo_sp]

I believe that China has capital controls so Chinese investors have very little opportunity to invest internationally.

[!LittleDragon]

Looking to local media about real estate is kinda like asking the tobacco companies if smoking causes cancer.

[320icar]

What, am i supposed to be surprised?? How the eff is this news worthy
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[Carl Johnson]

You wonder why these rich Chinese would want to come to Canada in the first place. The investors who came here in the last 2-3 years already lost tons of money just in exchange rate along. CAD/CNY is hitting all time low. Also, a lot of these rich Chinese are probably fooled by the scenery and life-style while not realizing the stringent tax policy this country enforces when you become a resident or citizen. Canada tax your global income. So if you are getting business income, rent payment and stock capital gains in China you have to pay taxes in Canada. And lastly, BC barely had any employment growth in the last few years. Oh sure I understand these Bentley-driving rich people don't have to work but why are they putting money in a stagnant economy is beyond me.

[noclue]

Originally Posted by Carl Johnson

You wonder why these rich Chinese would want to come to Canada in the first place. The investors who came here in the last 2-3 years already lost tons of money just in exchange rate along. CAD/CNY is hitting all time low. Also, a lot of these rich Chinese are probably fooled by the scenery and life-style while not realizing the stringent tax policy this country enforces when you become a resident or citizen. Canada tax your global income. So if you are getting business income, rent payment and stock capital gains in China you have to pay taxes in Canada. And lastly, BC barely had any employment growth in the last few years. Oh sure I understand these Bentley-driving rich people don't have to work but why are they putting money in a stagnant economy is beyond me.

I think they dont care if they lose money as long as they can get it out of China. As for tax, typically the father who is the main income earner is not a resident/citizen but the wife and kids usually are. I heard that if they have kids/wife aboard they can wire money out of China relatively easily.

[Mr.HappySilp]

Originally Posted by Carl Johnson

You wonder why these rich Chinese would want to come to Canada in the first place. The investors who came here in the last 2-3 years already lost tons of money just in exchange rate along. CAD/CNY is hitting all time low. Also, a lot of these rich Chinese are probably fooled by the scenery and life-style while not realizing the stringent tax policy this country enforces when you become a resident or citizen. Canada tax your global income. So if you are getting business income, rent payment and stock capital gains in China you have to pay taxes in Canada. And lastly, BC barely had any employment growth in the last few years. Oh sure I understand these Bentley-driving rich people don't have to work but why are they putting money in a stagnant economy is beyond me.

Why would they care as long as they can find a way to get their money out of China. Beside a good number of these money is illegal anyways so losing a bit in exchange rate but able to use them freely is well worth it.

[Carl Johnson]

Explain to me why do the rich Chinese have the need to move money out of the country? It would seem to me there are far more opportunities in a 7.7% Chinese economy than our crap 1.7% Canadian economy. If anything they have their kids learn proper Chinese because they are going to need it more than English for this century.

[ShadowBun]

Illegal $...
Use it or lose it

[Carl Johnson]

Frankly, I just don't buy this illegal money argument unless you have some data to back up this claim. Not everyone is an angel in Canada just so you know. I am saying I just don't see a whole lot of reasons for well-off Chinese to come to Vancouver either to live or just to invest. Of course this runs contrary all the self-serving real estate agents, insurance brokers, and wealth management bankers would want you to think.

[pastarocket]

It's more than just about rich Chinese moving their money out of China. I think that some
of these wealthy Chinese families immigrate to China because
the strengths of Canada help build a brighter future
for the second generation kids of the rich parents. We have a high quality post secondary education compared to
China. Chinese students who graduate from a Canadian university get higher paying jobs than students graduating from Chinese universities.
There's the appeal of a healthier living environment in Canada than China. Things like clean water and air that we take for granted in Vancouver and Lower Mainland are rare in China.
Just google "smog in China" to see the pictures of
the horrible air pollution in big cities like Shanghai and Bejing.

China may have a faster growing economy than Canada. However, that country
is paying a huge price in terms of environmental
destruction.

If you come from a wealthy family
in China, would you want a healthier living environment and better education for your children elsewhere?
Hell yeah! They can afford it. That's why they choose Canada, in particular Vancouver, the lower mainland.
It's partly about a healthier living environment and better education for family members.
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[ShadowBun]

^ a lot of that definitely.
A few of family friends are quite rich, and honestly, not 100% of their $ is clean.
They all moved their wife and children here (or the US) for reasons above.

Obviously there's dirt in every country. There's also the 'catching' of corrupts in China lately. Who knows, I'm poor atm.
Take it as a grain of salt

[Mr.HappySilp]

Originally Posted by Carl Johnson

Explain to me why do the rich Chinese have the need to move money out of the country? It would seem to me there are far more opportunities in a 7.7% Chinese economy than our crap 1.7% Canadian economy. If anything they have their kids learn proper Chinese because they are going to need it more than English for this century.

Illegal money and also political issues is very unstable in China. You could get arrested tomorrow with some BS excuse all because someone with more power doesn't like you.

Not to mention the Chinese gov put very strict restriction on money moving out of the country.

One important thing is that in China there isn't any real freedom. The rich parents want their kids to grow up in a more educated society with better education and a better life.

[RFlush]

Canada does not tax global income to Canadian citizens who are non residents, unlike the us.
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[Qmx323]

Obvious this doesn't fully represent the facts

but, do you want this?

van.jpg

OR

beijing.jpg

[Carl Johnson]

Originally Posted by Mr.HappySilp

Illegal money and also political issues is very unstable in China. You could get arrested tomorrow with some BS excuse all because someone with more power doesn't like you.

Not to mention the Chinese gov put very strict restriction on money moving out of the country.

One important thing is that in China there isn't any real freedom. The rich parents want their kids to grow up in a more educated society with better education and a better life.

I think if you go to China and talk to people then you'll realize they don't care as much about voting rights or human rights like we do here in this country. All they want is a responsible and responsive Chinese government. And I question if our education system is really better than China's. There are a lot of aspiring Chinese universities that are spending huge amount of money attracting scholars from around the world. You are going to start seeing more Chinese institutions on all the different rankings for universities in this decade.

[Ulic Qel-Droma]

cuz you can own property here... lol

what u gonna do... buy (lease) something in china and then what? lol.

[J____]

Corruption is a part of life here in China. 90% of my clients ask for a 'kick back' in order to do business with me. I'm so used to it now in the last 2 years of being here (1 year working in a multi-billion dollar corporation and 1 year running my own business) that I automatically include a percentage in my quote for this commission. When I was working for the corporation in the 1st year, EVERYONE siphon money if they are in a position that allows them to do so, from high level executives to even the fucking janitor! It's horrible but you can easily see why, people's wages are so low and turn over so high that they really have no other choice. I was getting almost 3x the salary than some of the high level execs that was 2 ranks above me simply because I hired as a foreigner, but their net 'earnings' were double mine.

From my personal business' point of view, there's good and bad in this. Good part is it's easy to get the clients highest budget if you know how to talk. Simply put, tell them if they give me the case for their highest budget, they'll get the maximum commission. No negotiating and guessing back and forth on a hidden budget.

Bad side is that everyone you work with is focused on how to maximize the under the table money to actually focus and produce any good work.

All in all, with all this gray cash going around, of course the Chinese are going to invest outside the country any chance they can. Who knows when the government will turn and once again claim all the wealthy citizens' hard earned money like 50 years ago?

[$_$]

Originally Posted by Carl Johnson

Frankly, I just don't buy this illegal money argument unless you have some data to back up this claim. Not everyone is an angel in Canada just so you know. I am saying I just don't see a whole lot of reasons for well-off Chinese to come to Vancouver either to live or just to invest. Of course this runs contrary all the self-serving real estate agents, insurance brokers, and wealth management bankers would want you to think.

I don't know if you have ever lived in China or SE Asia, or anywhere that is third world for that matter, but everyone there wants to move to the west because it's glamorized and for good reason. The people of the West have it easy, and while stress is subjective standards of living is not. Couple that with the fact that when you have higher educated citezens you will a more higher functioning society. Living in China is like living in a zoo sometimes.

Originally Posted by Carl Johnson

I think if you go to China and talk to people then you'll realize they don't care as much about voting rights or human rights like we do here in this country. All they want is a responsible and responsive Chinese government. And I question if our education system is really better than China's. There are a lot of aspiring Chinese universities that are spending huge amount of money attracting scholars from around the world. You are going to start seeing more Chinese institutions on all the different rankings for universities in this decade.

Your right on some levels. Most people aren't educated enough or know enough about whats going in order to care about any of that stuff. You know why? Because people are still so dirt poor that they still have to worry about how to make enough money to feed themselves. They ain't got time to worry about politcal structures or the state of the world's financial stability and enviromental issues. They are still preoccupied with finding ways to feed themselves and put food on the table. That's most people. But the universities that you're talking about? Hells yeah those people want human rights and voting rights and democracy. With the current state of the govt, and the rampant corruption, who wouldn't want some sort of accountability or opportunity for change if they were given a choice? Most people I know are scared though. They know the government will start coming after you if you start speaking out publicly.

[FerrariEnzo]

Im surprise this wasnt done sooner... with all the mainlanders that came in before...

[Marco911]

Even if you lived abroad for most of the year, if you're supporting a spouse in Canada, your global income is taxable in Canada.

[4444]

Originally Posted by 320icar

What, am i supposed to be surprised?? How the eff is this news worthy
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Because Vancouver

[Hehe]

Originally Posted by Marco911

Even if you lived abroad for most of the year, if you're supporting a spouse in Canada, your global income is taxable in Canada.

Many easy ways (legally speaking) to circumvent this.

[SlySi]

Originally Posted by Ulic Qel-Droma

cuz you can own property here... lol

what u gonna do... buy (lease) something in china and then what? lol.

Yep. You dont own in Asia.
You own here.

Also, the mentality of the rich Chinese culture.
Save the money, not only for your kids, or grand kids. But for your grand kids grand kids.
Creating the successful path throughout the family generation.

Different than other cultures. Kick your kids out of the house at 19. Spend all your money before you move on in life.

But lets not kid ourselves. The same saving asians are also balling.