Vancouver property exclusively marketed to international buyers; sells for $5 million over asking price
WATCH: A huge portfolio of B.C. property has gone off the market, but no one here knew about it. The reason for that might be frustrating for prospective buyers. Ted Chernecki reports.
If the escalating price of Vancouver real estate – and the role international buyers contribute to it – frustrates you, a recent statement by CBRE Group won’t help matters.
“We are pleased to announce that our team closed on a $30 million property portfolio while on tour. The owners had stipulated to not expose the portfolio to the local Canadian market; as such, we arranged an international marketing campaign and brought the portfolio on the roadshow. The sale exceeded market expectations closing $5 million above market price.”
That statement came in an email from the commercial real estate company, which recently travelled to Asia to showcase some of their properties. The international-only sale that went $5 million above asking price is in Vancouver, but CBRE wouldn’t tell Global News where its exact location.
What exactly it means depends on who you ask. To some, it highlights the lack of regulation on foreign ownership in Vancouver. While several provinces limit foreign ownership of agricultural land, and many countries impose restrictions or additional taxes, no such laws exist in British Columbia.
“There are no regulations in British Columbia that restrict foreign ownership of land,” says Alexander Fane, a Real Estate Partner with Bull Housser.
“Controls could be imposed. Would they be effective? It’s hard to say, but there would be an additional administrative burden, and it could possibly be subject to challenge by the charter.”
He argues that Vancouver is simply a victim of incredibly high demand.
“I don’t know what is an accurate reflection of the market, I don’t know what the market is supposed to look like. At the end of the day, it is market economics. If it’s a valuable asset, if more people want it, more people are going to pay for it.”
Tsur Somerville, Director of UBC’s Centre for Urban Economics and Real Estate, says that international buyers of commercial property doesn’t concern him.
“No one buys an office building to hold it vacant. People buy office buildings because they want rent. Who owns it doesn’t matter because they’re going to go out and get it, and fill it best they can anyhow,” he says.
However, Somerville says that vacant properties are a greater problem.
“I’m a lot more concerned with the vacant property, independent of who owns it. I’m much more aligned with ‘let’s find a way to tax property that’s not being used, that’s vacant, [and] use that money to then help low-income people looking for housing,'” he says.
“That strikes me as a nice connection between a need and what’s causing it.”