- Eric Christiansen
- PRICEY IN ANY CURRENCY: This house in West Vancouver hit the seven-figure mark in Canadian dollars.
A fresh wave of Chinese buyers, coupled with Canada’s already frothy home prices, has vaulted Vancouver into the ranks of the world’s most unaffordable real-estate markets.
Bungalows—small, detached, single-story homes, some in need of significant repair—can command prices well above a million Canadian dollars (US$1.02 million.) One local website, crackhouseormansion.com, invites visitors to guess whether homes pictured on the site are property sold for more than C$1 million or are alleged crack houses.
The Canadian Real Estate Association says the average house price in Canada in April was C$372,544, up 8% from last year. In Vancouver, it was more than twice that, at C$815,252, up 21% from a year ago.
Demographia, a property-affordability survey published by Illinois-based consultant Wendell Cox, estimates that median real-estate prices in Vancouver are 9.5 times median household income. Only Hong Kong and Sydney are less affordable by that measure. (New York comes in at 5.1.)
The price rises are especially sharp in the high end of the market, with real-estate agents pointing to a flood of foreign buyers, particularly Chinese. Condominiums are popular, but so are single-family homes, including fixer-uppers that buyers eventually tear down. While there is some speculative buying, Canadian and Chinese agents say Chinese buyers are looking for longer-term investments to diversify their holdings outside of the mainland.
After keeping its currency tightly linked to the US dollar for years, China in July 2005 revalued its currency by 2 % against the US dollar and moved to an exchange rate system that references a basket of currencies.
The Chinese government seeks to add energy production capacity from sources other than coal and oil, and is focusing on nuclear and other alternative energy development.
China has emphasized raising personal income and consumption and introducing new management systems to help increase productivity.
Some economists believe that Chinese economic growth has been in fact understated during much of the 1990s and early 2000s, failing to fully factor in the growth driven by the private sector and that the extent at which China is dependent on exports is exaggerated.
The country is one of the world’s largest producers of a number of industrial and mineral products, including cotton cloth, tungsten, and antimony, and is an important producer of cotton yarn, coal, crude oil, and a number of other products.
A report by UBS in 2009 concluded that China has experienced total factor productivity growth of 4 per cent per year since 1990, one of the fastest improvements in world economic history.
By the early 1990s these subsidies began to be eliminated, in large part due to China’s admission into the World Trade Organization (WTO) in 2001, which carried with it requirements for further economic liberalization and deregulation.
On top of this, foreign direct investment (FDI) this year was set to “surpass $100 billion”, compared to $90 billion last year, ministry officials predicted.
“The growth rate (for ODI) in the next few years will be much higher than previous years,” Shen said, without elaborating.
China is aiming to be the world’s largest new energy vehicle market by 2020 with 5 million cars.
In large part as a result of economic liberalization policies, the GDP quadrupled between 1978 and 1998, and foreign investment soared during the 1990s.
Even with these improvements, agriculture accounts for only 20% of the nation’s gross national product.
Except for the oasis farming in Xinjiang and Qinghai, some irrigated areas in Inner Mongolia and Gansu, and sheltered valleys in Tibet, agricultural production is restricted to the east.
Sheep, cattle, and goats are the most common types of livestock.
There are also extensive iron-ore deposits; the largest mines are at Anshan and Benxi, in Liaoning province.
China’s leading export minerals are tungsten, antimony, tin, magnesium, molybdenum, mercury, manganese, barite, and salt.
China also has extensive hydroelectric energy potential, notably in Yunnan, W Sichuan, and E Tibet, although hydroelectric power accounts for only 5% of the country’s total energy production.
Before 1945, heavy industry was concentrated in the northeast (Manchuria), but important centers were subsequently established in other parts of the country, notably in Shanghai and Wuhan.
Read more here:
Chinese Fuel Vancouver Home Boom
