While the world watched the U.S. stock market convulse in January due to fears of a possible recession and troubles related to sub-prime mortgages, Rudy Nielsen was busy closing a million-dollar deal with an American buyer.
Nielsen, the New Westminster–based president of NIHO Land & Cattle Company Ltd., recalled there was little negotiation over the 65-
hectare oceanfront property located somewhere on Vancouver Island. The buyer neither had problems with the high Canadian dollar, nor was he worried about the U.S. economic situation. According to Nielsen, the buyer wants to put up two or three cottages on the land as a summer vacation spot for himself and his family.
“American buyers are still coming here,” Nielsen told the Georgia Straight. “There’s still a great demand for Washington guys to drive up to B.C. and get some great skiing, some fishing, and even some of our golf. So they’re still buying recreational land.”
The veteran realtor, who has been in the property market for more than 40 years, also said that the sales volume being generated by his company doesn’t indicate a slowdown in terms of American purchases of recreational properties.
Nielsen is also the president of Landcor Data Corporation, a firm that tracks all property purchases in the province. Although the company has yet to finalize its 2007 report, Nielsen believes that American interest in B.C. properties overall hasn’t changed much.
A Landcor residential-sales analysis prepared on August 16, 2006, dispels any misconception that Americans are literally buying up British Columbia. For example, the report noted that California-based buyers accounted for 0.24 percent of all sales in the first half of 2006, and 0.31 percent of the dollar value of sales. Purchasers from Washington were behind 0.13 percent of transactions for the same period, the equivalent of 0.18 percent of the dollar value.
Contrast this to buyers from Ontario, who accounted for 0.48 percent of sales in the first half of 2006, and 0.77 percent of dollar sales value. Those from Alberta bought even more, with 2.81 percent of the total sales, representing 2.51 percent of the total value of sales.
Well-known Vancouver realtor Bob Rennie told the Straight it’s B.C. natives who are largely fuelling the property market. He noted that were it not for local buyers who had converted their investment properties into rental accommodations, the province would long have experienced a severe rental crisis, because no purpose-built rental properties have been built in recent years.
“We’ve been losing America since our dollar was at 65 cents,” Rennie said. “As that advantage eroded, so did the American buying power. Now that our dollar is so strong and given the problems America has with its own real estate and liquidity, they’re not”¦a big focus.”
To put this context, he explained that in the condominium sector, for example, Americans have historically accounted for no more than 12 percent in any particular building, and less than seven percent in the overall condo market.
Rennie also said that in recent years, there has been increased interest in B.C. properties from buyers in mainland China, Europe, and even Iran. These new players, according to Rennie, are the ones getting noticed by
In another interview with the Straight, the chief economist of the British Columbia Real Estate Association pointed out that the province will hardly feel any pressures brought about by whatever changes in American buying activity.
“Their numbers are fairly small,” BCREA’s Cameron Muir said. “We wouldn’t notice
the numbers. It won’t make a dent in the overall market.”
Muir also explained that American buyers are hardly considered as a homogenous bloc; one person may have bought a condo at Vancouver’s Coal Harbour for use as a getaway place, while another did so solely as an investment. He added that purchasers come with different motivations, and these influence what type of property they’re going to buy.
“Their overall impact on the market is negligible, because the vast majority of home sales are occurring to people who work, live, and raise their families in communities in the Lower Mainland, not from international investors or buyers,” Muir said.