Derrick Penner,Vancouver Sun, Friday, March 13, 2009
Seattle resident Steven Thompson admits he’s probably an anomaly as an American looking to buy a condominium in downtown Vancouver.
About 30 per cent fewer foreign buyers, including Americans, dipped into British Columbia’s real estate markets in 2008, compared with 2007, according to data from the property research firm Landcor Data Corp.
Many Americans saw their properties at home deflate in value during 2008, then in September and October watched massive amounts of their net worth evaporate in the stock-market meltdown.
“I’ve got friends in all income scales right across the board,” Thompson, retired from the financial services sector, said in an interview, “and the majority don’t want to make a move [with their money]. Some are hurting terribly.”
Thompson said some got into trouble by relying too heavily on the rising value of their homes, taking out home equity loans to fuel their lifestyle. Now, with U.S. property values falling and job losses mounting, even those who are employed worry about their futures.
“Even Microsoft announced layoffs,” Thompson added, “and Microsoft never lays anybody off. So there is a great deal of uncertainty in the air.”
The numbers on foreign purchases from Landcor seem to back up that view. In 2008, the company counted some 541 sales registered with B.C.’s land title office to American buyers with homes in the U.S., down 34 per cent compared with 819 sales in 2007.
Purchases by buyers from other countries registered by the land title office, 425 in 2008 compared with 545 in 2007, were down 22 per cent.
Thompson’s realtor, Judith Matheson of Coldwell Banker Premier Realty, said U.S. and offshore interest in Vancouver’s market slowed last fall when the bottom fell out of world stock markets.
Now, she added, sales to foreigners are still slower than a year ago, but are picking up.
“Everybody’s regrouping and finding out where they are with their [investment] portfolios, in whatever country they’re from,” Matheson said.
However, she is still dealing with Americans and people from other countries interested in buying in Vancouver.
Many are aware of the market shift that has seen city prices come down and are looking for bargains, though some expect to snap up foreclosures at discounts comparable to those they might find in their more distressed home markets.
“So they have to readjust their minds,” Matheson said. “We don’t have that same problem.”
The American buyers who are coming, she said, still believe the Canadian market is a safe place to sock their money away.
Jamie MacDougal, an agent with Sotheby’s International Realty Canada, said he is still dealing with offshore clients, many from Mainland China who are viewing even his firm’s most expensive properties.
“We all know, yes, things have slowed as far as high-end purchases go,” MacDougal said. “That’s the market that’s been hit the hardest, but it’s not gone. We still do get inquiries.”
He added that the declining value of the Canadian dollar versus U.S. currency has attracted some more interest from American buyers.
Jennifer Podmore Russell, managing partner of the development research firm MPC Intelligence, said anecdotal evidence from the market is that domestic, end-user buyers are currently the dominant influence in B.C. markets.
Podmore Russell said foreign and out-of-province buyers as a whole started bowing out of B.C. about last August. Developers, she added, have also shifted their sights. They are advertising less in airports and airline magazines and aiming more campaigns toward local buyers.
“If you look at B.C. as a whole, we’re really seeing a stop of the influx of buyers from Alberta, from Ontario and from the U.S.,” she said.
Landcor tracked some 4,061 sales to Albertans in 2008, down 36 per cent from 2007. Ontarians bought 420 properties, down 28 per cent from 2007. Buyers from other provinces picked up 444 properties, down 60 per cent from the previous year.
This represents sales of all residential properties (including single detached, townhouse, apartment and bare land) where the owner is listed at an out-of-province/out-of-country address, but won’t necessarily capture owners who purchased using a company or entity in Canada.
Total sales registered with the land titles office declined 28 per cent to 113,654 in 2008