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Thursday, February 7, 2013

Chinese New Year is upon us... will real estate sales surge? - Updated



This coming Sunday is Chinese New Year.

And Chinese New Year (CNY) has been an annual harbinger of a sales surge in our little Village on the Edge of the Rainforest... at least up until last year.

In 2012 CNY was a dismal flop. Declining market conditions back home combined with the negative images from the Japan Tsunami cast a pall across the CNY euphoria.

But with some semblance of a recovery in the economy, and press reports of fleeing capital in the midsts of a Chinese corruption crackdown, many have been eagerly anticipating another CNY surge.

Sales in Metro Vancouver’s real estate markets have slowed, but realtors are still gearing up for the Lunar New Year period when, in recent years, the region has seen a bump in transactions associated with an influx of visitors for the holiday.

“It’s hard to say what’s going to happen this year, but I expect we will see a bump in sales activity during the month of February,” said Cameron McNeil, president of project-marketing firm MAC Marketing Solutions.

However, McNeil said Asian buyers have been more active in the Metro Vancouver market in recent weeks than they were through the middle of 2012.

By the end of 2012, property resales had declined 23 per cent to 25,032 transactions within the region of Metro Vancouver covered by the Greater Vancouver Real Estate Board, and realtors were describing the market as a standoff between buyers and sellers.
Asian buyer have been more active in the Metro Vancouver market in recent weeks?

Oh?

Now it must be said that the daily sales stats are not an accurate reflection of what went on that particular day.  They can be delayed weeks at a time.  But those numbers have been abysmal.  So the first reaction is to scoff at the statement.

It wreaks of another lame attempt to generate phantom demand as a lever to encourage buyers to "buy now before the surge prices you out".
McNeil said his salespeople are seeing an increase in activity, including from Chinese buyers.

“To me, (Chinese buyers) are a leading indicator,” McNeil said. “What I mean is, when Chinese buyers are active, it is a little bit of a bellwether (for the overall market), and the Chinese are active.”

Buyers are taking their time, McNeil said, but for developments in good locations with “fair values, prices aren’t coming off and are selling very well.”

He added that locations with established neighbourhoods, good schools and proximity to rapid transit are popular.
The message here is clear: Chinese buyers are a leading indicator and realtors are here to tell you "they're buying." The implication? Get ahead of the curve before prices start going up again.

As one comment at VCI noted (hat tip Bo Xilai):
Yeah, I can see wealthy Mainland Chinese buyers consider proximity to rapid transit as being SUPER important to their buying decision.

Why take the Bentley when you can ride the Canada Line?

Maybe Mr. MacNeil is trying to get his real audience – brokeass first time home buyers – off the fence.
And that is exactly what the entire "news piece" is all about.

Comically - after the big pump - the stage is set to soften the inevitable disappointment.
On the Chinese zodiac, 2013 is the year of the snake, but McNeil said that factors little in anyone’s buying plans.

Lunar New Year is one of the times of the year when the Chinese visitors who are drawn to Vancouver tend to come, which is something the real estate industry noticed and catered to with receptions and sales events. The result, McNeil said, has been “quite a few transactions out of that time period.”

Albert Leong, managing broker for the Macdonald Realty Westmar office in Richmond, added that China shuts down for Lunar New Year, which gives executives and business owners time to take a break from their companies and travel.

“At the same time, they come here with some money,” Leong said, and those inclined to spend some time in Vancouver might buy property.

However, Leong is also sensitive to China’s internal economics, which haven’t been as strong as in previous years as the economies of its customers in Europe slow down and the United States struggles to bounce back.

And his impression is that there are fewer Chinese coming to Metro Vancouver.

“I think they are in recession just because their customers, the U.S. and Europe, are doing less business (with China),” Leong said. “I think for the government, the incentive is there to keep everyone home and keep their own economy (growing).”
The CNY period is upon us and sales data over the next few weeks is going to paint a very telling story.

Four sales days after the first of the month and we already have a net inventory increase of almost 600 new listings (an average increase of 149 per day).  If net daily listings were to increase at this rate, February would close with an astounding increase in inventory of (+2,832), a total which would eclipse any increase seen in 2012.

Those planeloads of vacationing Chinese nationals better start buying quick. 

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12 comments:

  1. OMG... it is so shameless and transparent.

    ReplyDelete
  2. If anything, it's the year of the dragon when Asians should buy. It's the year of the dragon where Asians want to have their babies.

    Not the year of the snake.

    I think realtors are now grasping at straws and using anything they can to "spice up" the media for attention.

    *rolls eyes*

    ReplyDelete
  3. Why are we allowing the destruction of our country by selling property to non-citizens? If we let them buy and screw us all, at the very least we should charge them a very high % tax every year they own. There is no justification whatsoever to allow non-citizens to 'invest' in our real estate market. It is of no advantage to anybody living in Canada.

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    Replies
    1. Our government knows what's best for us.Then you get the real estate cartel telling us that foreigners will return and everything will be OK.In other words the real estate market in Vancouver is meant for foreigners and not local tax paying citizens.
      Don't other countries have laws to protect their citizens from this kind of crap.

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    2. Deport all of them. Chinese spies subverting federal provincial and municipal governments. police and military too. Vancouver scumbag locals happily sold the country out for a few hundred thousand

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    3. China has more than 1000 spies in Canada, more than in any other country outside China. The Canadian government fears that the Chinese have stolen considerable business and industrial secrets from the country. The head of the Canadian Security Intelligence Service Richard Fadden in a television interview was assumed to have implied that various Canadian politicians at provincial and municipal levels had ties to Chinese intelligence. In an interview, he claimed that some politicians were under the influence of a foreign government

      Delete
  4. Bo Xilai very happy with Hat Tip.

    Bo Xilai not so happy with VREAA who ripped off Financial Times article about dumb McNab realtor brothers and Crib Crawl flop.

    VREAA give no Hat Tip.

    No Snake Soup for VREAA during CNY!

    ReplyDelete
    Replies
    1. Why noooooooooooo Haaaaaaaaaat tiiiiiiippppppp. !?!!?!?!?

      Delete
    2. No tip in Chinese restaurant

      Delete
  5. One musn't confuse pre CNY "activity" with actual intent to purchase. To many Chinese, perusing open houses in the spring without buying has become a recreational pastime... kind of like walking around the malls without actually having to spend any money. What else do you do in rainy Vancouver in February?

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  6. I've got a fee Vancouver Sun at the Skytrain this morning. I saw the RE article about "sales surge"....the comedy never stops here !!! Since when wishful thinking is a news? Propaganda and nothing more.

    ReplyDelete
  7. Whether they be locals(which is more often the case now) or offshore investors, Chinese are the only buyers left in the Vancouver market. A realtor telling us that "the Chinese are active" doesn't tell us anything at all.

    ReplyDelete