Residential Real Estate becomes Tourism for Chinese in Vancouver

Vancouver, British Columbia has long been a major attraction for homebuyers, but never like what we’re seeing this year. Ever since the 2010 Olympic Winter Games occurred back in February, real estate in the Vancouver area has been so strong that a market for “real estate tourism” has been establishing.

Groups of wealthy travelers have bought into scheduled visits to Vancouver, with the sole purpose being home hunting. Most of these travelers include international buyers from China, as a Chinese-based Internet sales company, SouFun, has two upcoming tours scheduled for Vancouver – one from Beijing and the other from Shanghai. The group of about 20 each will also be visiting Toronto, when they first stop to hunt for multi-million dollar listings this August in Vancouver.

Back in 2008, SouFun put together similar travel packs for Chinese residents who went on to visit American neighbourhoods, from Los Angeles to New York.

This was during the inception of the Global Financial Crisis in 2008, and for Beijing lawyer Ying Guohua, who went looking for a $1 million home through SouFun in either New York City or Los Angeles, he said it was “a great time to buy because of the financial crisis,” since “houses in large cities like New York and Los Angeles will definitely go up in a few years.”

With home prices now climbing in Vancouver, to the point of boasting the highest prices in all of Canada, Royal Pacific Realty agent Angel Wang says that Vancouver is still attractive for residents of China looking to move to the west coast of North America because the prices are still a bargain when compared to those in Shanghai, Beijing, or even other international cities. That and the fact that Vancouver, Canada appears to be a stable market.

Tom Gradecak, owner of Westside Tom Gradecak Realty, remarks how 80% of his showings for his west-side Vancouver listings go to Chinese buyers.

“When prices are getting over $2.5 million to $3 million, then predominantly that’s our market,” Gradecak said. However, when the homes are over $4 million to $6 million, “almost the entire market” of residential real estate goes to Chinese consumers.

The trips that are setup by SouFun though are ultimately used to get a sense of what Vancouver’s neighbourhoods are like – which points to the incarnation of the term, “real estate tourism.” A SouFun spokesman said that potential buyers are usually drawn to neighbourhoods with “famous” schools or ocean view properties.

According to Vincent Chen, a representative for the Chinese immigrate consulting firm Visas Consulting Group, Canada is currently the most popular attraction for mainland Chinese using his firm. Reason for this attraction is Canada’s quality of education, quality of life, the overall safety and stability of Canadian society, and its “attractive investor immigrant program.”

Asian buyers have had a dramatic impact on the Vancouver real estate market over the past two decades and recent developments point to that trend accelerating, well into the future.

On June 24, 2010 during the G20 Summit in Toronto, Chinese President Hu Jintao signed a memorandum of understanding granting Canada an “Approved Destination Status” effectively opening the travel doors to Canada for Chinese citizens.

Not only is this expected to boast Canada’s tourism industry by $100 million a year, it is sure to increase Chinese “real estate tourism” trips with the high end Vancouver real estate market, no doubt being on their shopping list as Canada’s gateway to Asia.