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Showing posts for category Foreign Investment (Back to Index)
Showing posts for category Foreign Investment (Back to Index)
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Impact of Vancouver’s Foreign Buyer Tax Still Unknown
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(Posted on Mar 26, 2017 at 01:00PM by Michelle Bogle)
Last year, the provincial government implemented a 15 percent foreign buyer tax on residential home purchases (including multi-family properties) in Vancouver, B.C. Since then, the local housing market’s price growth and sales volume have relatively slowed, yet the levy’s actual impact on the residential and commercial segments remains unknown.
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In an interview with the Canadian Press, Dan Morrison, President of the Real Estate Board of Greater Vancouver (REBGV), said that while it’s probable that investors have redirected their funds from residential to commercial properties in response to the tax, no data currently exists to conclude one way or the other.Â
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“I would attribute it more to the economy than anything else,†added Morrison.
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On the other hand, NDP housing critic David Eby argued that this situation underscores the need for the provincial government to diligently collect transaction data across all property types.
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“As far as we know, the province isn’t collecting any data about these sales. We're one of the few provinces that doesn't collect this type of information and we really need to know what is driving these prices,†Eby stated. “There are a lot of small businesses facing huge property tax hikes because the perceived value of their property is higher. It's driving a lot of small businesses out of business.â€
These statements came after the REBGV released 2016 sales data, which revealed that the value of commercial real estate sales in the Lower Mainland grew by $12.990 billion last year – a 47.4 percent increase from the $8.815 billion total in 2015.Â
“It's really the confidence in the B.C. and Vancouver economy,†Morrison said in the same interview with the Canadian Press. “It's no surprise that we see the same thing happen with commercial properties as has been happening for residential properties.â€
These statements came after the REBGV released 2016 sales data, which revealed that the value of commercial real estate sales in the Lower Mainland grew by $12.990 billion last year – a 47.4 percent increase from the $8.815 billion total in 2015.Â
“It's really the confidence in the B.C. and Vancouver economy,†Morrison said in the same interview with the Canadian Press. “It's no surprise that we see the same thing happen with commercial properties as has been happening for residential properties.â€
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Foreign investment remains a hot topic not only in Vancouver, but nation-wide. For more information and insight, please contact our office to speak with one of our knowledgeable commercial real estate advisors.
Foreign Investment in Canada Up 33% in 2016
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(Posted on Feb 20, 2017 at 02:00PM by Michelle Bogle)
Transactions of Canadian office, hotel and retail properties reached record-breaking heights last year, stimulated by a strong inflow of foreign investment into the country’s commercial real estate sector.Â
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Commercial property deals involving foreign investors (worth $10 million and up) increased by 33% year-over-year in 2016, which equates to $34.7 billion. This figure exceeded the previous record of $32.1 billion, which was set in 2007. Within British Columbia, Vancouver accounted for $8.1 billion in 2016 – an increase from the previous year’s $5.7 billion.
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Industry watchers suggest that foreign investors are choosing Canada as a safe haven to park their money amid fiscal and political uncertainty around the world. A recent article by the CBC also indicates that foreign investors are also choosing Canada for our educational and business opportunities.
Earlier last summer, the B.C. government introduced legislation that adds a 15% property transfer tax for foreign residential real estate buyers. This new tax took effect on August 2, 2016, and only applies to home purchases in Metro Vancouver, as well as multi-family properties. Since then, B.C.’s housing market has experienced some cooling, while interest in the province’s commercial real estate sector has continued to simmer.
Earlier last summer, the B.C. government introduced legislation that adds a 15% property transfer tax for foreign residential real estate buyers. This new tax took effect on August 2, 2016, and only applies to home purchases in Metro Vancouver, as well as multi-family properties. Since then, B.C.’s housing market has experienced some cooling, while interest in the province’s commercial real estate sector has continued to simmer.
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Foreign investment remains a hot topic across Canada and especially in Vancouver. For more information and insight, please contact our office to speak with one of our knowledgeable commercial real estate advisors.
Asian Investors are Vying for Kelowna’s Commercial Real Estate Assets
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(Posted on Oct 30, 2016 at 01:00PM by Michelle Bogle)
According to a recent industry report, Kelowna is becoming a desirable alternative to the Lower Mainland for Asian investors looking to avoid the 15% foreign buyer tax and cash in on higher capitalization rates. Over the last 18 months, specifically, the area has seen a spike in Asian investment, including multi-family, winery and golf course assets.
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There are a handful of notable transactions, including the former Monaco multi-family site, which sold for $6.5 million, and the Lake Okanagan Resort sale, a 300-acre property purchased for over $10 million. Asian investors also purchased 25% of the 172 suites sold at the unveiling of Cambridge House Kelowna, a condominium development in the city’s downtown core.
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As a result, Kelowna is currently experiencing a compression on capitalization rates as Asian buyers begin to outbid local investors; however, these cap rates are still much higher and more desirable than that of Vancouver.Â
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As well, there has been an overall decrease in office, industrial, retail and rental property vacancy rates from 2014 to 2015. Tenants are now signing longer lease terms, averaging between five to ten years versus the previous average of three to five years – a definite sign of market assurance.
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Foreign investment continues to be a hot topic across the province of British Columbia. For more insight, please feel free to contact our Vancouver office to speak with an associate.
Could Foreign Residential Tax Increase Interest in Vancouver’s Commercial Assets?
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(Posted on Oct 3, 2016 at 07:29PM by Michelle Bogle)
With so much news coverage about the recent 15% foreign tax placed on Vancouver residential properties, much speculation has shifted towards commercial assets and the probability of foreign investors cashing in on office, retail and industrial properties – especially as these assets are reaching all-time high numbers.Â
The plausibly of this happening is quite promising. Since the tax was instituted, home sales and price growth have cooled, particularly for luxury real estate.
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Commercial real estate, on the other hand, is hot. Transactions climbed to $7.14 billion (CDN) in the first half of 2016 – almost double the year previous and nearly triple compared to the same period of 2014.
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Another consideration is the supposed housing bubble risk that Vancouver is harbouring. According to a report by Swiss bank UBS, Vancouver's bubble risk is unmatched on the planet, thanks to the boom in foreign investment and loose monetary policy.
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Some might smell disaster; others might smell opportunity. Either way, our commercial advisors are keeping a close eye on B.C.’s provincial government and the real estate sector across the Lower Mainland.
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To learn more, please contact our Vancouver office to speak with a broker.
Chinese Investors Purchased $1.3 Billion of Canadian Commercial Real Estate This Year
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(Posted on Jul 5, 2016 at 05:50PM by Michelle Bogle)
Buyers from China and Hong Kong are now the largest group of foreign investors in the Canadian commercial real estate market.In Q1 and Q2 of this year, they spent $1.3 billion on commercial real estate properties – a drastic increase from last year’s $309 million.
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Chinese investors now hold 65% of the Canadian commercial real estate market. Five years ago, that number was just 4%.Â
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Much of this activity can be seen in major markets, like Toronto and Vancouver. On the local stage, Metro Vancouver had the most active first quarter for commercial real estate sales in the last five years.Â
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One major landmark transaction that occurred in that timeframe is the sale of Vancouver’s Bentall Centre to China's Anbang Group. It represents the largest commercial real estate transaction in the history of Vancouver with a reported sale price of more than $1 billion.
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Chinese investors have taken a keen interest in Canadian commercial real estate because of our safe haven for capital. The low Canadian dollar and European uncertainty due to the Brexit have also helped to attract foreign interest.
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At Marcus & Millichap Vancouver, our team of advisors have a watchful eye on the foreign investment activity in our market. For more information or insight, please contact our office.
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Vancouver is the New Home for Global Business
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(Posted on Apr 8, 2016 at 01:00PM by Michelle Bogle)
Foreign Investors Set Their Sights on Vancouver
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(Posted on Apr 1, 2016 at 04:11PM by Michelle Bogle)
Foreign investment in the Canadian commercial real estate industry has been on the rise for quite some time. In fact, in the last six months, foreign investment figures have climbed by 143%, which translates to an astounding $1.85 billion.
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And, the Metro Vancouver Area is seeing a bulk of that incoming capital – $798 million of it, to be exact, with most of it funneling in from China.
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Many industry insiders claim that global uncertainty, the low Canadian dollar and perceived factors, such as political stability, an emphasis on higher education and livability, make Vancouver an ideal market for foreigners to invest in.Â
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And, they are. Take the multi-family rental market, for example, which saw a huge increase in 2015 – sales rose by 47% to 181 transactions and the dollar volume increased by 99% to $1.55 billion last year compared to 2014. Many of these investors are from outside of Canada.
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This trend isn’t looking to slow either. In fact, according to Dan Scarrow of the Canadian Real Estate Investment Centre located in Shanghai, China, younger Chinese-Canadians are expected to buy real estate in the future, as they are set to inherit more than $1 trillion over the next three decades.
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It’s no wonder why the world has their eyes on Canada’s commercial real estate market, especially on the Lower Mainland.
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For more information on foreign investments in the Vancouver area, please contact our office to speak to one of our advisors.
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