Sales of high-end homes fell by more than one-third in 2012 from the year before, but the number of homes that sold for more than $3 million was still second only to 2011, a new Macdonald Realty report shows.
There were 439 sales of homes for more than $3 million in 2012 in B.C. Forty-four of those were townhomes or condos and 107 sold for more than $5 million, the Macdonald Realty report shows. The most expensive home sold in B.C. in 2012 went for $19.8 million.
Immigrant buying patterns are driving the luxury market, said Dan Scarrow, vice-president at Macdonald Realty. Scarrow, who is half-Chinese and speaks Mandarin, works with realtors and individuals from mainland China who are looking for homes and may need help communicating.
“For the past few years, we’ve seen lots of new investor-class immigrants coming into the market,” Scarrow said. “ ... They’re not just buying a house for themselves, but also three or four residential investment properties as well.”
This “exuberance” among immigrant buyers has slowed, Scarrow said, as the economy slowed in China and prices rose rapidly in Vancouver.
“A lot of the Vancouver real estate market is powered by investor sentiment and psychology. In 2011 the perception among investors — a lot of whom are from Mainland China, where the economic system was going crazy for the last 10 years — (was) extremely (positive). They had lots of disposable income and the last 10 years have been great for them,” Scarrow said. “They brought that sentiment here when they immigrated here and it resulted in this big uptick in the real estate market here. But in the last two years, housing prices here have gone up a lot, so a lot of investors see that there is not that much more room in the short term for it to go much higher.”
While a luxury apartment on the waterfront in Vancouver might sell for $1,750 a square foot, a similar home in New York or London would sell for $5,000 to $6,000 per square foot.