Asian Investors and Our Market

(January 29, 2012 )

Vancouver is becoming one of the most expensive places to live.  Vancouver is now the world's second-least affordable English-speaking city in which to buy a home, according to a public-policy firm called Demographia.

There are many theories as to why our market has skyrocketed over the years.  One common thought is that this is because of the inflow of Asian investors buying up our Vancouver real estate.  The question therefore is why?

Much of China's population is divided into the 'rich' and the 'poor'.  There's very few who are 'middle-class'.  Workers get paid very little, and therefore the 'rich' continue to make more profit.  A small percentage of the overall population hold majority of the money and assets.

The catalyst in China is that, due to unstable political pressure, the 'rich' are worried the government might come and seize their assets.  The causes them to become foreign investors, who 'park' their money here in Canada.  They continue to buy up real estate in our market, thus supporting the high prices we have today.  Our Vancouver market is unique in that it is surrounded by mountains, bodies of water, and our housing market is considered quite stable.

Later on, though we might start to see less foreign investors buying our real estate, I believe a lot of the money and influence they have already injected into our market will continue have a long lasting effect in our housing prices.