I’m a big believer in the “WHY?” You can look to numbers or trends or cycles for answers, but asking why something is happening will give you a clearer picture.
Unless you’ve been living under a rock for the past two years you have probably heard that our real estate market has been very hot. Prices have already soared to new record highs in a relatively brief amount of time, so, why is this happening?
Everyone knows the Vancouver real estate market is hot and is predominantly fuelled by Chinese buyers, and that we are feeling the trickle-down effect or after-shock of the increasingly unattainable dream of home ownership by middle-class people in the Greater Vancouver area. In 2016 48.8% of all Powell River home buyers were from out of area, and roughly half of those out of area buyers – and approximately ¼ of all purchases – were made by people from the Lower Mainland. Those figures are very similar through October 2017, with 47.3% of all buyers coming from out of area, and 28.6% of all purchases coming from Lower Mainland buyers.
Virtually all corners of the province and most of the country are experiencing hot real estate markets. I was reading a 2016 article in McLean’s and the title alone summed it up brilliantly:
China is Buying Canada: Inside the new real estate frenzy
How China’s affection for Canada’s Real Estate is reshaping the nation’s housing market well beyond Vancouver.
The word in the title that struck me the most was ‘affection’. The largest populous on the planet feels affectionately about Canadian real estate…really? As I read on, I realized why they did, and where this ongoing love affair is going.
A desire for Canadian quality of life and familiarity with already established Chinese communities within Canadian suburbs which grew during an era of lax immigration standards is just the tip of the ice berg. More than that, Chinese buyers see western real estate as a safe place to park their wealth. It’s not just wealthy Chinese however; the article goes on to cite the experience of a middle class Chinese immigrant who came to BC because his family couldn’t afford to own in China. That year the Chinese real estate market jumped 60%. While China’s wealthy elite still dominate high end real estate purchases in Vancouver – one study of Vancouver’s three highest end neighbourhoods showed that 66% of all purchase were made by foreign buyers – the growing Chinese middle class also covet Canadian real estate. In fact, real estate is the preferred investment by Chinese. Adding to the desirability of Canadian real estate is the ability to keep these assets away from a shady Chinese Government. One Chinese investor said, “In China, even if the governments name is not on my account, whenever they want my money they’ll have my money.”
It was estimated that in 2014 One Trillion Dollars left China, and the government has placed very strict rules on the amount of money Chinese citizens can take out of the country, and with a low loonie Canadian real estate is a bargain to Chinese buyers whose Yuan is fixed to the US dollar. Vancouver real estate is skyrocketing so fast that the average single family dwelling is north of $2M, and the average Vancouver household would have to use 109% of their disposable income to cover the costs of owning the average Vancouver home.
One of the largest factors driving Chinese investment in Canada is the quality of our schools, and the value placed on education within the Chinese culture. Did you know that in 2016 over 130,000 Chinese students were enrolled in Canadian schools and colleges? That figure doubled from 2011. That makes China the biggest source of international students in Canada. And why not? A recent study has Canada 4th of 70 countries in a survey of science and technology, and second in the world for reading standards. Much of this is attributed to high government investment in education, ongoing training for teachers and competitive remuneration for educators, as well as quality facilities. And, again, you guessed it…it’s on sale! In 2016 Canada’s university tuition fees were a bargain, at 42% of the cost of post secondary education of our neighbours to the south, and significantly less than other Chinese Investor hotbeds like New Zealand, the UK and Australia. One other big reason why China likes Canada’s education system is our comparatively low mandatory IELTS scores. And on top of that, students who qualify for certain post-grad work permits can skip the foreign buyer tax.
Wow! There’s a lot there to consider. It’s obvious that foreign investment in Vancouver is displacing residents who are turning to smaller affordable BC communities, but figuring out why China is buying up Canada – more specifically Vancouver – leads me to believe this climate is not going to change. Why would it? After all a country whose shear mass and wealth we can’t fully comprehend sees our real estate as a vehicle to facilitate the thing they prioritize most for their children, our education system, while simultaneously sheltering their wealth from a crooked government and volatile market in a country with some of the highest quality of life available on earth, where their friends, relatives and culture are already established in enclaves throughout the nation, and to top it off they’re getting it for pennies on the Yuan.
Buckle up! We ain’t seen nothin’ yet.
What an amazing sturgeon excursion with Fraser River Lodge and our expert guide Neil.
This 8’6″ leviathan was the biggest of the 13 we landed, and my buddy Quinton’s second over 8′ that day.
You don’t have to be an avid fishermen to enjoy this experience. Scenic beauty and the rush of cruising the mighty Fraser in a jet boat, and the opportunity to battle a prehistoric River monster is fun for all.
Don’t forget my Tight Lines Photo Contest is underway and we’re in the voting stage. Head over to this link and vote for your favourite entry!
It was difficult to hear over the weekend about the death of Tom Petty. 66 is way too young for anyone to pass, least of all someone who had such a huge impact on music during his life.
Not much else to say other than rest in peace to a legend of the industry, and someone who’s legacy will continue to live on.
Just got back from a week on Savary Island with the family, recharged and ready for the rest of this busy summer real estate market. While we were away some friends visited, and they hadn’t been to the Indian Point side of the Island before, and really hadn’t been in their adult lives – I was shocked! People, if you live in PR and don’t regularly enjoy the benefits of Savary Island, whether day tripping or enjoying an extended stay, you have to find out what you’ve been missing out on:
Down Time: I don’t know how to explain it, but nothing has gotten me more relaxed than a week on Savary in my entire life. I read three and a half books, and we have two kids!
Strolls: There are endless trails and walks to explore.
Diversity: From Mace Point to Indian Point and all points in between, Savary is a collage of unique locations, each with its own different qualities and benefits; try them all, and see what you like best. Some say they love the action of Savary Shores and the area nearer to the government dock, plus access is great here. The Meadows is a picturesque area, but a climb down to the beach. If you are under 30 you probably already know what South Beach has to offer. Sunset Boulevard has great boat access, and, of course, stunning vistas. My personal favourite is Indian Point. Best beaches, great boat access and mooring, sunsets, hikes, I could go on…
Sugar Shack: While Riggers’ wasn’t open this season, the Sugar Shack in the Meadows was worth the walk from Indian Point. It was our first visit to the shack, and we didn’t know what to expect, but this shack if a Candy Land in reality. Probably the highlight of Claire’s trip.
Sea Food: You can’t beat harvesting fresh shell fish, and if you’ve got any kind of boat access, the crabbing is terrific too. Mace Pt. Is a great local hot spot for anglers.
Diversity: This place is an interesting mix. I love the many galleries around the island with island inspired art, and the eclectic vibe. Savary seems to speak to people from every walk of life, whether it’s your year round home or once a year fortress of solitude.
Sunsets: They’re better on Savary…period.
History: For the history buff, this place has got folklore galore. Our friend and island resource Rick Thadeus can give you one amazing tour, and find you a nice little vacation property too!
Market: The Savary Market probably does as much volume as Costco in a torrid two hours every Tuesday.
So, here are just a few reasons Statham Style to enjoy Savary. Do yourself a heap of good and come experience your own.
Last week I posted a great infographic on the first half of 2017 in Powell River Real Estate. I even did a Facebook Live video on this topic yesterday. However I wanted to provide a more in depth look at everything that’s happened up to July 1st.
With just 1.5 months of available Single Family Detached Home (SFD) inventory, our real estate market continues to favour sellers. There are just 67 residential listings on our MLS, and a mere 56 actively listed SFD Homes on mainland PR, just 23 of which are under $400,000.00. With a lack of supply and constantly increasing demand the real estate market has become incredibly competitive.
52 of 177 SFD Home sales through the end of Q2 2017 have been full price or above! 2017 is so far similar to 2016 in many ways. SFD Home sales volume is up 5.3%, but total volume of residential sales is down 6.5%. In 2016 the first quarter was very slow, and the second quarter was a record setter, but this year has been more even, and should continue to be. 2016’s strong second quarter saw a drop in volume in Q3 where often they’re similar, which should again be the case in 2017. Total sales fell 24% between the second and third quarters on 2016, but I wouldn’t be surprised if they’re very close in 2017. Overall, residential sales are on pace to be +/- the same volume as 2016.
While sales volume is stable, sale prices are climbing fairly quickly. At the end of Q2 2016 the average SFD Home sale price was $301,913. When Q2 2017 ended, that number was up to $332,925, a jump of over 10% and trending higher. Comparing each second quarter, the increase was almost 14% as homes sold from April – June this year averaged $346,098. At the close of 2016 the average SFD Home price was $320,058. If the current average increase continues SFD Home sale prices will average north of $350,000 by the end of this year, and if volume doesn’t increase it most certainly will be all of that.
In recent news some Canadian banks have increased rates marginally only on certain products as they anticipate a long expected increase to the Bank of Canada’s key benchmark rate. CIBC and BMO increased longer fixed term rates with 25 year amortizations between 5 and 20 basis points. Rate increases have been long coming, but should not have a negative effect on our real estate market.
Despite the rapid appreciation the average home is still very affordable in Powell River, and a few points either direction is not going to make or break most transactions as it might in major markets.
Canada Day has come and gone and so has the mid point of 2017. Six months and 181 days are behind us, so it seems like an appropriate time to look back at the first half of 2017 in Powell River Real Estate, and look ahead at what’s to come.
Check out this great infographic featuring a few of the key stats from 2017 thus far. I’ll have more in a few days as I take a more detailed look at the second quarter of 2017 and the year overall so far.
It was about a year ago the Matterport 3D Imaging system finally arrived at my office. It was like Christmas in June. I had just listed a beautiful lakefront home, ideal to showcase this groundbreaking new technology. Alex (my right hand man) had just started, and on day one I asked him to research how we could get this machine that creates 3D living models of homes, and if he could run it. Well, the latter was a synch, but considering the company wasn’t direct shipping to Canada yet (that’s how exclusive this technology is), we had to send it from California, to Florida, to Vancouver and up to the beautiful Sunshine Coast.
My business philosophy is predicated on adding value to the listing process; it’s the reason I do what I do. So, to acquire a technology that can put a buyer right in your home, along with my already exciting suite of value added services was a dream come true. To me, anyone can put a home on the market, it’s marketing the home to its full potential that’s so critical, and there’s no better way, especially when nearly half of all purchases in Powell River in 2016 were made by someone from outside of PR. It’s called digital curb appeal. Let’s face it, everything sells online, so, make sure what you’re selling – in this case pretty big ticket items like houses – show to their full potential.
When I meet a buyer at a home who has already told me they enjoyed the 3D model, I know they’ve already made the purchasing decision in their mind because they’ve already experienced everything the home has to offer…seeing it in person becomes a formality. Showings become more like pre-offer meetings.
Our first Matterport 3D listing was in Cranberry on a beautiful two storey home right on the lake. 7032 Cranberry presented amazingly for our new 3D camera and what you get most from the final product is the size and space available from the huge family room to the beautiful entrance way and upstairs master bedroom. You can’t get that from photos, you get a sense of it on video, but only the 3D scan allows you to see every inch of the home, how its laid out and just how big everything is.
Shortly after, we ventured over to Savary Island to capture a pair of homes including a stunning custom build overlooking the south side of the Island and back to Powell River and Texada Island. Take a look at this scan and see how it handles the outdoors by standing on the back deck and checking out the view and landscaped gardens.
In September, we scanned a beautifully renovated home that was staged expertly by Relish Interiors. This two floor family home on Field Street was showcased to its maximum by capturing beautiful photos and creating a 3D walkthrough that allowed prospective buyers to see all the improvements and upgrade, see the views out the window and see how the house was laid out.
Overall, in a year we’ve scanned 36 properties in Powell River and Savary Island. 36 homes with unprecedented digital curb appeal and 36 properties that appeal like nothing else on the market to a growing contingent of out of town buyers. In 2016, almost half of all buyers (48.8%) were from outside of Powell River and it’s no longer an option to cater to that pool of prospective buyers…it’s a necessity.
It doesn’t matter what you call home, you can benefit from my exclusive 3D technology when its time to sell…at NO EXTRA COST! You don’t have to have a million dollar listing to reap the benefits of unparalleled real estate marketing technology, you just have to give me a call. I believe everyone deserves the ability to sell their biggest investment for maximum return, whether you’re down sizing, up sizing, cashing out an investment property, or relocating altogether.
Looking back at all the homes we’ve scanned in the first year it just amazes me the effect this cutting edge technology has when it comes to selling real estate…seeing how this machine brings the beauty of my clients’ home to life.
If you haven’t heard of, or seen it yet, click here for some more examples of local homes we sold in the past year with the help of the Matterport 3D system, and when it’s time to hire an agent remember I’ll be happy to put this high tech marketing tool to work for your benefit.
This is something that I’ve wanted to put together for a long time and I’m happy to now begin offering this moving forward. Every month we collect various stats and information about the transactions in Powell River for Real Estate. These range from where buyers and sellers come from to why they’re coming or leaving Powell River. Combine that with our up to date MLS data featuring asking and sales prices, number of units and much more and you get a pretty complete look at the region.
So we took all that information and put it into an easy to view infographic. The numbers are quite interesting.