Friday, March 24, 2006
Vancouver, British Columbia – The New Target Of International Real Estate Investors
In the wake of the forthcoming 2010 Winter Olympics, real estate values are poised to soar from $500 to $1,000 per square foot. Article written by a faithful Vancouverite.
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I am not going to deny it: after thirty-four years of living in this city I am still thoroughly in love with it. And mind you, I was born in and am coming from another beautiful city, renown throughout the world for its beauty and fine arts: Florence, Italy. And this is the thing with me. When you come from a pretty town like Florence, Italy it takes truly a lot to make you fall in love with another pretty town. In this respect, therefore, the judgment I render on Vancouver, BC is certainly more rigorous than the critiques other people might proffer.
There are indeed quite a few things that make Vancouver, BC one of a kind town. For starters, if you choose to make Canada your new home - or second home - this is the only one place where temperatures are ‘civilized’ pretty much all year round. Our 2 degrees Celsius (37 degrees Fahrenheit) minimum wintertime average does not sound that bad when you compare it to the minus XX for the rest of the country. Secondly, Vancouver is definitely not a working town. With a mean yearly income of CAD $84,000 per household, a fantastic scenery and the prettiest girls in Canada, Vancouverites are faithful followers of the West Coast lifestyle, originally imported from San Francisco – except that here we do it better. In fact, whereas in San Francisco people actually work for eight hours a day (or so they say), here we do absolutely nothing day and night – except pretending to go to work.
Like San Francisco, Vancouver is crowded with Chinese people (which include Hong Kong, Macau, Taiwan in addition, of course, to Mainland China), except that ours are the wealthy Chinese – at least judging from the fact that they have snapped up all the real estate they could possibly buy, and then gotten into high-rises development and given the Vancouver skyline a much needed facelift. Which, by the way, brings up to mind the fact that when I bought my one bedroom plus den apartment here in Downtown – one of the five properties I own - where I am writing this Article right now, on the twenty-fourth floor of an ultra-modern skyscraper with all the facilities and amenities one could possibly imagine and a fabulous view, I paid CAD $155,000 for it in 2001 (about USD $124,000 back then), and now a good friend of mine has just sold her own apartment, which is pretty much like mine but on the twelfth floor of the same building for CAD $305,000 (I brought her an offer of CAD $295,000 and she did not even counter ...).
All of which brings me to the substance of this Article: what distinguishes Vancouver from the rest of North America is not the fact that property values have appreciated so much. In the past five years, real estate went through the roof just about anywhere. What does distinguish the Vancouver real estate market from all others is that in the wake of the 2010 Winter Olympics property values are forecasted to almost double within the next four years. And this is at a time when interest rates are on the rise and when north-american markets are poised to expand at an average rate of five to ten percent a year, depending on where you are.
To say that the economy of British Columbia is booming at this time already is probably an understatement. But if one is to believe the projections of the Urban Futures Institute, the British Columbia Economic Council, the City of Vancouver and, heck, even Statistics Canada, this is nothing compared to what it is going to happen to property values in this town. Here is why: the provincial and federal governments will be injecting CAD 1.7 billion (yeah, that’s billion with a ‘b’ … like ‘Bob’) in the final four-year stretch of building, fundraising and planning for the monumental event. World-class facilities have been promised for the 2010 games, including a new Speed Skating Oval and Winter Sports Centre, improvements on the 120 Km Sea-to-Sky highway connecting Vancouver to Whistler, construction of the Vancouver Olympic Village, construction of the Whistler Sliding Centre - host of the bobsleigh, skeleton and luge events. There will be a new ice Hockey Arena at the University of British Columbia (UBC), a new Curling Centre, a separate Figure Skating Centre, a Short-Track Speed Skating Arena, retrofitting of the General Motors Centre and of the BC Stadium, construction of a brand new express subway connecting the Vancouver Downtown core to the airport and a myriad improvements all over town, so as to make Vancouver ready when the olympic torch enters BC Stadium on February 12, 2010. All in all, if one takes into account increased security, installation of all sort of paraphernalia and electronic gizmos to make us all feel more secure, and any and all other ancillary costs, the provincial and federal government will be handling a budget close to CAD $2 billions.
All of which, then, translates into the creation of 228,000 jobs in British Columbia over the next four years, directly or indirectly generated by the resulting estimated CAD $12-billion volley of economic activity. And all this frenzy is expected to promote an influx of approximately 100,000 people per year into the Metropolitan Vancouver area so that its population will reach 2.2 million by 2010 – and that does not even take into account tourists and visitors which will be flocking in from the four corners of the world, but mostly from Ol’ Uncle Sam’s country of residency. Which, besides creating a gargantuan traffic jam, will push prices of condos in Downtown from the present CAD $500 per square foot to about $1,000 per square foot, thus catapulting Vancouver, BC from the present fifteenth most expensive place in the world to live in, to the seventh. And, considering that in Downtown we have just run out of space entirely … I believe it!
So, if you are one of those investors who likes to purchase real estate away from home, before you consider Timbuktu as your next investment destination you may be better off to take a closer look at what’s happening right here, in Vancouver B.C. And since I so happen to be involved, by grace of God, into real estate sales (boy, isn’t this your lucky day ...) and know this market like the back of my hand, if there are any questions, clarifications or merely additional info requested or required, just go to my blog - the Real Estate Chronicle - and send me an e-mail, which I will be more than thrilled to answer.
Luigi Frascati
Real Estate Chronicle
