The appetizers have been eaten and mains are being tackled when architect Bruce Haden mentions that a house he designed, after sitting for months at an $8 million list, recently sold for a healthy $7.2 million. The buyers: a couple from Beijing, one child. Looks are exchanged as the other diners -- interior designer Shelley Penner, architecture critic Adele Weder, and I -- consider the vendors’ good luck. The federal government has just announced the end of the investor immigrant program. Who is going to buy all those $7 million houses now?
Well, somebody. In the weeks after the program’s termination in early February, the market failed to collapse. In Richmond and on the West Side, bellwethers of the Chinese-dominated luxury trade, February sales of detached homes rose more than 50 percent from the same month in 2013 (admittedly, a stinker); on the West Side the median selling price hit a new high: more than $2.5 million per house.
Theories abounded, of course. A few die-hard housing bears grasped it as evidence that the HAM (hot Asian money) thesis had always been overstated, and a bigger problem was the willingness of Canadians to indulge their edifice complexes using cheap money. After all, entries under the investor program have been tailing away since 2012, when the federal government froze applications and paused approvals.
Others speculated that it takes time for sales to close and psychologies to change, so the reckoning would come later in the spring. Then again, maybe it wouldn’t come at all. With at least 45,000 rich Chinese intent on making Vancouver their home, according to Citizenship and Immigration Canada data, many would find their way regardless. Other recent immigration amendments include an extension of visitor visas up to 10 years and changes that make it easier for foreign students to gain work visas and then citizenship, opening the door for family that way; the air in Beijing isn’t getting any better.
And then there’s the Quebec Problem. That province, with its parallel immigration system, continues to hold the gates open for as many immigrant investors as will pay the toll, some 7,000 a year. Quebec skims off some of their money, but an estimated 90 percent never have to test their French because they head straight for Vancouver. The feds have vowed to fix this loophole, but who knows if they even can? For that matter, they’ve also hinted that a new investor program, one with a bigger rake for federal and provincial governments, is in the offing.
And maybe it wasn’t just the rich Chinese buying all those houses, but the people living off the rich Chinese: the realtors and developers, car and furniture dealers, spa owners and restaurateurs, lawyers and consultants, even the bankers. As outlined by immigration lawyer and blogger/columnist Steven Meurrens, beyond government’s fairly meagre take, some $60,000 to $90,000 was being netted from each investor immigrant before they even saw the inside of a Mercedes dealership, with about half going to lawyers and consultants and the rest to the banks that facilitate things and post a bond in lieu of the stipulated $800,000 “investment.”
So maybe the cancelled program was indeed a bad deal for federal and provincial governments, and for the majority of people trying to make their home in Vancouver, wherever in the world they happen to have been born. But it did make life just a little nicer for a subset that included, as it happens, three of the four at our table. No one orders dessert.