Is B.C. a global haven or just a port of call?
With housing markets across North America imploding, the question on the minds of B.C. realtors is, Where are the international buyers? In early January of this year, brokers and agents packed the international market sessions of Real Estate Connect, an annual conference that draws more than 1,000 participants to New York’s Times Square looking for insight. But with the secondary-home market dead and international and domestic buyers battening down the hatches of primary residences until conditions improve, hope was hard to find.
The absence of international buyers is keenly felt in B.C., where chic Vancouver hotel properties, chalets in the Kootenays and landmark properties with star power (such as Norman Foster’s ill-fated Jameson House project) were advertised in Architectural Record and other high-profile publications. Touted as a haven for risk-averse investors as U.S. markets collapsed, B.C. is now feeling the impact as high-profile projects scramble for financing. While investors once accounted for 30 per cent to 50 per cent of the buyers in projects around False Creek and Coal Harbour, and more recent projects such as the Hotel Georgia and Revelstoke Mountain Resort attracted interest from the U.K., foreign buyers are now more cautious.
“International buyers are not stepping away from B.C.—their decision-making appetite has simply been curbed,” says an optimistic Kyle Dunn, vice-president of Sotheby’s International Realty Canada, which is marketing both Hotel Georgia and Revelstoke. “We are seeing the same ratio of international buyers versus local buyers. The multiple is simply different; instead of it being 10 to 30, it is now one to three. This doesn’t mean that international buyers have stepped away from B.C. We are simply aligned with the global economy.”
The international presence, in Vancouver in particular, is not insignificant. Canada Mortgage and Housing Corp. data indicates that investor-owned condos account for up to 45 per cent of the downtown Vancouver market, and while just eight per cent of those investors come from outside Canada, many of the units are now home to the 30,000-odd foreign students who throng the downtown peninsula on any given day. Such statistics fuel the fears of architect Bing Thom, who told the 2006 World Planners Congress that Vancouver was fast becoming a resort for the rich rather than a genuine city with an identifiable local character. Then last summer, he grumbled in a Vancouver magazine profile that Vancouver residents were paying the price for the city’s global aspirations. “Foreigners and visitors outnumber residents; you become a stranger in your own home,” he said. And don’t expect the 2010 Olympics to change much either.
While supporters of the event such as condo marketer (and BCB columnist) Bob Rennie tout the Games as our arrival on the world stage, studies by the Real Estate Board of Greater Vancouver, UBC professor Sanghoon Lee and others suggest that the Games themselves haven’t been a significant factor in the long-term real estate trends of host cities such as Atlanta and Salt Lake City. Yes, Vancouver may become a more desirable place in the eyes of the world, but with several international organizations having repeatedly named it one of the best places in the world in which to live, the city didn’t need the Games to announce the fact. What the Games will do, however, is add substance to the city’s aspirations to international status.
Local architecture critic Trevor Boddy has long maintained that Vancouver is the sole city in Canada with a shot at becoming a world city. While Montreal never quite recovered from the political turmoil of the 1970s and 1980s and Toronto imported so-called “starchitects” to enhance its cityscape, Vancouver’s success in developing a downtown where more than 100,000 residents share space with 21.8 million square feet of commercial space birthed the term Vancouverism—and soon spawned imitators around the globe, from San Diego to Dubai. Vancouver’s appeal among international buyers has been a sign of the phenomenon’s success, but now the city has to weather a significant downturn. Being a successful global centre isn’t just a matter of attracting foreign buyers, as we’re about to find out; it’s about keeping them here, in good times and bad.