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International investors will drive British Columbia market for years

7th May 2008 Print
Vancouver, British Columbia Vancouver and the province of British Columbia, Canada, have the economic indicators, quality of life, and regulatory provisions in place to provide property investors with a safer environment for their money. Local people express wonder at prices of $750 per square foot downtown - compare that with $3-4000 in Central London (and $6-8000 in Knightsbridge), and there is clearly scope for growth. Combine those figures with near-zero rental vacancy rates and continued immigration (an extra 51,000 people are expected to move to the province during 2008), and that scope for growth is great.

The real estate market is becoming increasingly international, with investment across national borders. In London (UK), the impact of new international money: from Russia, India, China and the Arab States has been a major driving force in price rises. In British Columbia, the growth of the Pacific Rim economies and the exponential rise in China's fortunes are having a significant effect, particularly in Vancouver.

It is plain that these buyers measure and assess real estate values by international benchmarks. While Vancouverites express wonder over prices exceeding $750 per square foot for residential property the price is small potatoes by comparison to Central London where $3 - 4,000 is now routine, and to areas like Knightsbridge, where $6 - 8,000 per square foot is being achieved.

A host of other international cities have prices almost as demanding as London's.

Value Measured by International Standards

Vancouver and the stunning province of British Columbia in which it is set, is now attracting buyers of residential and recreation real estate based on those international benchmarks, as opposed to those of the local populace.

It is with the bird’s eye view of international comparison and experience that these buyers assess ‘value’ in the Vancouver real estate market.

The “World's Most Liveable City” boast was inevitably going to start attracting greater numbers of investors and migrants in because, by contrast, so much of the world is seemingly becoming less and less “liveable”.

Whatever constraints exist on personal immigration to BC, no one is prevented from investing for profit, for vacation and recreation purposes, to perhaps gain a foothold for a future move, or to have some alternative place to call home. Henceforth, Vancouver real estate should always achieve the highest prices in Canada.

And just as the world is waking up to the fact that British Columbia is an amazing place to live and to own real estate, the City of Vancouver and Whistler are about to climb astride the marketing rocketship called the 2010 Winter Olympics.

2010 Winter Olympics – A Multi-Billion Dollar Advertisement

It has been rightly said that Vancouverites perhaps underestimate the impact the Winter Olympics are going to have on their city. Millions of televisions around the planet will relay the view from Cypress Mountain where the moguls, freestyle and snowboarding events will take place, 30 minutes from downtown. The televisions will reveal a view of Vancouver which citizens of the city already know well: the snowboarder in mid-air, the panorama of the skyscaper cityscape below, set in a sparkling ocean, and all in one frame.

Combine that image with the message that this is a friendly, relatively clean, relatively safe, terrorism-free, stable, English-speaking western democracy - in other words, a good place to invest - and in a very short time from now, that $750 dollars per square foot won't seem quite so preposterous.

Strong Demand For Commodities

The growth of British Columbia's economy has been conspicuous in recent years. The impact that the economies of the western provinces have on the economics of Canada is considerable. It is in this part of Canada, rather than any other, that the elements are in place for prices to assume the same sort of levels as other world cities.

The past ten years have begun a golden era. The Pacific Rim has the fastest growing
economies in the world. Continuing growth in the Pacific Rim means demand for British Columbian commodities will inevitably remain strong.

Exploiting Vast Mineral Resources

Recently the Provincial Government announced its intention to elecrify a large part of northwest British Columbia for the first time at a cost of $400 milllion. The Northwest Transmission Line Project (NTL) shows the clear intent that both Federal and Provincial governments have to exploit the vast mineral resources that lie in this largely uninhabited and remote area.

Over half of all proposed mining projects in Canada are in British Columbia, many in the province's northwest region. Across the Pacific are economic giants ready to consume all the commodities they can to feed their growth.

Oil Wealth

Next door to British Columbia is the province of Alberta where oil is the economic driver.

Second only to the Saudi Arabia reserves, Alberta's oil sands deposits were described by Time Magazine as "Canada's greatest buried energy treasure," which "could satisfy the world's demand for petroleum for the next century".

Alberta is a prosperous place and an expensive one. One of the spin-offs of Alberta's prosperity is the purchasing power which Albertans now wield in the British Columbian property market. Albertans are widely represented in the purchase of much of the recreational property within reasonable striking distance of their province.

One is forced to speculate what will happen to property prices when BC's own mineral wealth kicks-in in the same way.

The Winter Olympics are generating many significant infrastructure projects in the province. As well as the many new venues and facilities being built, the Sea to Sky Highway connecting Vancouver to Whistler is undergoing a $600 million improvement scheme. The $1.9 billion dollar Canada Line Transit system is being built, connecting the airport to downtown by rail for the first time. On the last remaining piece of waterfront in the City of Vancouver is being built the community of South East False Creek, 1200 homes which will act first of all as the Athletes Village for the duration of the Winter Olympics but which is now being marketed for sale to the public with completion in Spring 2010.

The picture of the province therefore is of economic and population growth accelerating, and infrastructure being made ready. Overall inflation is low as are interest rates. Commodity prices remain strong, job growth and immigration are on the rise: cue the worldwide multi-billion dollar Olympic advertisement.

British Columbia has had a great last few years. Economically, all indicators are that the best is yet to come.

If you have questions about the BC property market, contact us at info@britishcolumbia-properties.com.

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Vancouver, British Columbia