As the BC Premier quite clearly stated in her job's initiative, she is looking to Asia for growth and more investment.The fate of our Provincial economy is tied to China in the way it was once tied to the USA. Our housing market especially is hitched to Chinese buyers.
They are the main buyers at the high end, there seems little doubt of that. They are also acquiring mid-level properties, often in bulk from developers for investment or to diversify or to move money out, no one is quite sure about the exact reason since the net returns are so low.
In any case it is a fact that we have to accept and deal with.
The quantities of money are also well beyond what we are used to. We have lots of people in Vancouver earning high 6 figures, but when you see 13 super-luxury cars - some $400K+ impounded for speeding, some driven by teenagers who OWN them too...you know we are dealing with a different level of wealth.
I am sure most of it is legit however I am also sure that some of it is not, and is very hot money.
We have a reputation after all for allowing very hot money to hide, particularly in this Province where we have a huge and thriving cash drug business. And as soon as you set foot here, even if you are a crook, it will take Millions and many years to get you out...it took 13 years for the Thai Government to get this fellow, meanwhile he lived in the lap of luxury in Vancouver.
Dozens of Hong Kong policemen and their underworld associates who amassed huge fortunes and escaped to Canada were never sent back. In fact they became amongst the wealthiest real estate investors in this Province. They came with wives, children and even concubines and yet how many people have even heard of them, and most of them died of old age here, unmolested by the law and enjoying their ill-gotten gains. There is a lot more on the net about this if you want to check.
OK, so we are bound in many ways to the state of the economy in China. It is indeed a double edged sword.
If they falter, the steam comes out of housing, but we may be really hurt. Think the $C hitting 75 US cents again, and big cuts in Provincial spending...OR...maybe instead someone will start to question the origin of the huge funds that are coming into our city and buying $7 homes or new developments.
I think that is very unlikely.
The whole world is now begging for Chinese money. We have it. The last thing our Governments want to do is frighten it away by asking too many questions.
Does this mean there won't be a correction?
On the contrary. My neck is sore from sticking it out so much, but I think we will have our correction anyway because locals are totally priced out and we are already at super-low rates and wages are not keeping up. I also think China will trip a little (but not fall) and that will add some drag too.
