Richmond-Vancouver Real Estate Market Report


Blog by Arnold Shuchat | July 27th, 2015


Notwithstanding what any local, provincial or federal politician says, our local Vancouver/Richmond real estate market is fueled by Asian money.  Nobody needs a weather vane to see that.  So, I am just imagining the effect of an 8.5% decline in the Shanghai stock market index in one day on local real estate.

It is no secret that default and foreclosure rates are higher on secondary and recreational property than they are on principal residences.  Even if they are very low in the Lower Mainland, Whistler, for example has a rate double that of Vancouver and that is still low.  Now, taking the same view of Vancouver real estate as being a secondary market for Asian investors, there just might be a rush to liquidate their offshore investments to cover possible stock market losses. And what if 8.5% in one day is just the beginning?

Experience has shown me that following large stock market corrections and major external events, such as Black Tuesday in 1987, October 2008 and March of 2011, buyers stop dead in their tracks and take a hard look while sellers push on a string and pile into the market; and they do so at the top, not pricing their property for a quick sell. Hence, downward adjustments take time to rid the sellers of false expectations. If the Chinese market continues in a downward trend, I am sure buying opportunities will arise here.  

Check out: http://business.financialpost.com/investing/global-investor/china-stocks-just-fell-the-most-in-eight-years-as-imf-warns-beijing-to-butt-out-of-market