by Al Campbell
VANCOUVER, Jan. 16 (Xinhua) -- Vancouver is going to face a shortfall of apartment units following its hosting of next month's Winter Olympics Games, said the realtor known as the city's "CondoKing," responding to the local realty company Royal LePage's recent forecast that property in western Canada's largest city would rise 7.2 percent this year.
Bob Rennie, principle of Rennie Marketing Systems, Canada and USA, told Xinhua in an exclusive interview that Vancouver properties would conservatively rise 4 to 4.5 percent in 2010, which would present an ideal opportunity for investors.
The high-profile designer and marketer of condominium developments said with the city going through a difficult economic downturn in 2008, in Greater Vancouver alone the construction of between 4,000 to 6,000 apartments units had been put on hold.
"If there was ever going to be an Olympic overhang we took care of it in 2008-2009 by canceling buildings. We are now coming into a shortfall where banks are very conservative, Canadian banking practices are always very conservative, and developers are just coming off the sidelines."
Rennie predicted by the first quarter of 2011 the shortfall in apartment units would be noticeable in downtown Vancouver as there were very few major sites left to develop. Also, with a lot of "money on the sidelines" earning low interest, this coupled with a low supply of available properties, would put pressure on the market.
Another consideration facing Vancouverites was the July 1 introduction of the harmonized sales tax. British Columbia, Vancouver's home province, is following Ontario's lead in implementing the HST, a blending of the seven percent provincial sales tax and five percent federal goods and services tax. The move will increase the price of new properties by two percent.
Regardless, Rennie said Vancouver was still an affordable city by world standards and a good investment. "The unique thing about Vancouver is nobody builds rental towers (anymore). For the offshore investor properties are easy to rent out as there is no rental stock."
Unlike China where real estate speculation is rampant, Rennie added in Vancouver it was "more passive speculation" with investors buying for the long term.
"Every market has people who want to jump in and jump out, but there is something unique about Vancouver that once people get their name on title they tend to hold and that's what maintained prices. And a very low vacancy rate has maintained prices on property prices." With Chinese-Canadians about 300,000 of the city's 2.2 million population Rennie said Asian investors were increasingly an important factor to the market, accounting for about 25 percent of the overall sales.
"With the amount of money being made in China, and with the acceptance of China to Vancouver, we have to be in the top two places on the planet for China to look at, to move money to. We see it happening right now, it's happening a lot. It used to just happen in the luxury market, now it's happening in all the market."
One of Rennie's big projects following the Olympics and March Paralympics will be the marketing and sales of the Olympic Village which will be released May 15. To date, 265 of the 737 condo units have been sold. They range from 600,000 Canadian dollars to 10 million Canadian dollars.
"They are right on the water, across from downtown Vancouver. You can walk into town," said Rennie, ever the salesman. "Most Olympic villages are in suburbs. They are put into depressed areas as economic generators. We built the Olympic Village literally right downtown on False Creek. They have amazing views of the water and shopping in the greenest community in North America."
He went as far to say that much like the World Expo that the city hosted in 1986, when Concord Pacific, a company then controlled by Hong Kong tycoon Li Kashing developed the land following the exposition, the Olympics would "ensure" the Vancouver brand forever.
"I'll guarantee it won't hurt our values. I'll guarantee it will maintain our values. The frightening part is if values go up too much. We don't have financial sector head office jobs, no manufacturing. If we are basing things on local incomes, how does housing keep up with local incomes if we have a shortage? We have to be very careful on the affordability side."
According to Royal LePage, the median price for properties in Greater Vancouver in 2009 was 592,000 Canadian dollars, about 1,000 Canadian dollars off its 2008 peak.
"When people watch the Winter Olympics, I don't think they say 'I want to buy a house in Turin' or 'I want to work from Lillehammer'," said Rennie, referring to the Italy and Norway cities, respectively, that hosted the Games in 2006 and 1994. "But they do for Vancouver. This is one of the most amazing cities on the planet to work from."
"That's the danger of the Olympics. As the world sees it, they go from 'I want to spend two weeks in Vancouver', to ' spending two to five months in Vancouver', to 'I want to send my children to school here'."