Wendy Stueck, Globe & Mail, September 16, 2002
VANCOUVER -- For years, British Columbia in general and Vancouver especially have attracted foreign real estate investors.
But if the buzz once focused on Asian speculators snapping up downtown condos before the units were even built, today it centres on Americans -- drawn to B.C. by a low Canadian dollar, relative accessibility and in some cases, a desire for a safe haven in troubled times.
"We lost Asia, and America has not replaced Asia anywhere other than downtown -- they [Americans] are not buying in the suburbs," said Bob Rennie, director of Vancouver-based Rennie Marketing Systems and a fixture on B.C. real estate top-sellers' lists.
Mr. Rennie, whose firm sells high-end condominium projects on contract to developers, said the balance began to shift in 1997 and 1998 during the Asian economic crisis. The stream of buyers from Hong Kong slowed, reversing a trend that took off a decade earlier following the landmark 1987 purchase of the Expo 86 site by magnate Li Ka-shing.
Today, most of Mr. Rennie's customers are locals and Americans. U.S. buyers have purchased about 25 per cent of units sold to date in a multi-tower development on Vancouver's Coal Harbour that is being marketed by Mr. Rennie's firm. And Americans bought 45 per cent of units in One Wall Centre, a project from Vancouver developer Peter Wall that went on the market in 1999.
"Offshore Asia is not a noticeable statistic now, compared to at one point when [in the mid-1990s] we would be selling 60 per cent of a building to Asian investors," Mr. Rennie said.
Customer behaviour has also changed. Asian purchasers of the 1980s and early 1990s tended to buy Vancouver apartments as an investment, and typically rented them out or left them vacant with the intent of occupying or selling them at a later date, he said.
Americans, by contrast, are buying Vancouver condos as a second or even third home, don't rent out the units and spend anywhere from three weeks to three months a year in Vancouver.
"There's not the same speculative element," he said.
While Americans may not be buying in the suburbs, they are looking in other parts of the province, said Rudy Nielsen, who sells recreational property, including islands and ranches, through his Niho Land & Cattle Co. Ltd.
In a trend he sees as linked to last fall's terrorist attacks in the United States, Mr. Nielsen has seen more interest, and offers, from Americans.
"For the first time in my 30 years of business, Americans are up to 30 per cent of our sales," Mr. Nielsen said. "Before, [the majority] were always customers from the Lower Mainland" of B.C.
American buyers are attracted by the low Canadian dollar and the chance to buy B.C. properties that can come complete with streams, timber and wildlife, Mr. Nielsen said. Severe drought in parts of Canada and the United States has led to increased interest in properties with streams or lakes, he added.
In recent months, he sold a 14-acre island, priced at $150,000, to a U.S. doctor who "was looking for a safe haven," Mr. Nielsen said. The purchaser didn't visit the site before agreeing to purchase it.
Smaller islands, priced at $30,000 and $70,000, also sold to Americans sight unseen in recent months after being listed on his company's Web site for several years, he said.
The flurry of interest in Niho's listings mirrors rising prices and demand in real estate markets in areas including Whistler, Pemberton and Kelowna.
But not everyone involved in the recreational property market says there has been a marked increase in American buying. Jorma Kivilahti, principal of Recreation Property Marketing Group in White Rock, B.C., and a pilot who often takes prospective purchasers to view sites in his float plane, said "about 75 per cent of viewers are American, and 95 per cent of purchasers are Canadian."
While there may be a perception of vast, open spaces available for purchase in the backwoods of B.C., the reality is different, Mr. Kivilahti said. A full 92 per cent of the province's land mass is provincial Crown land. Applicants for leases on such land must be Canadians or full-time residents.
Mr. Nielsen's Niho Holdings buys and sells private property, including serviced lots in small towns in interior and northern B.C.
Such properties may not seem glamorous, but could appeal to prospective purchasers seeking peace, quiet and perhaps even the cachet of a nearby stream.
"I say that every British Columbian, when it starts raining in the fall, should get down on their knees and kiss the ground," said Mr. Nielsen, who predicts the continent's water woes will become much worse before they get better. "Because they don't know how lucky they are."