Richmond’s real estate market is unlikely to feel the full effect of the federal government’s sudden axing of the immigrant investor program.
That’s the view of some of the city’s prominent realtors in the wake of the government’s decision to shut the door on the 28-year program, which allowed wealthy overseas residents with a willingness to invest in Canada a shortcut to permanent residency.
Many of those investor immigrants — B.C. received 2,622 investor immigrants in 2012, compared to 5,867 in 2008 — enter the high-end real estate market when they arrive in the country.
And there are fears of significantly fewer potential buyers for the monster homes that have sprung up in Richmond and Vancouver.
However, some local realtors see their colleagues across the bridges in Vancouver being more acutely affected by the change than Richmond.
“I think it’s only going to affect a very specific part of the market,” said realtor Steve Latham, who once acted as a guide for a bus-load of Asian property investors on a tour of Richmond and Vancouver homes valued between $2.5 million and $3 million.
“And I think it’s going to affect Vancouver more than Richmond, mainly because Vancouver has maybe about ten times the amount of properties in the price range that these people are looking for.
“We don’t have too many homes going for more than two or three million dollars and the vast majority of new immigrants in our market have already gone through all the (immigration) channels and are looking at houses in the $500,000 to $800,000 bracket.”
Another Richmond realtor, Patti Martin, was also suspect about the impact on the local market with the change to the program which, some experts claim, used to especially bolster the Vancouver housing market with money from wealthy Chinese investors.
Martin said there might a short-lived effect on the local market — something she’s witnessed many times in the past.
“Things happen, such as the investor program being closed, that create a public perception of the market and that perception can have an effect for a short time,” said Martin.
“But once things settle down, which I think they will, you will find that reality kicks in.
“We witnessed the same kind of reaction in 2008 during the financial meltdown. But once the dust settled, our markets weren’t really affected.”
Martin, who’s hoping to close this week on a $2 million property deal, said she had heard from a colleague of a $6 million sale in Vancouver that a foreign customer tried to pull out of after hearing the government’s decision.
“That person realized pretty quick, however, that they couldn’t back out and I think the deal went ahead,” added Martin.
Announcing the end of the program in his budget speech last week, federal Finance Minister Jim Flaherty said that, for decades, the government has “significantly undervalued Canadian permanent residence.
“There is also little evidence that investors, as a class, are maintaining ties to Canada or making a positive economic contribution to the country.”
For $1.6 million, of which $800,000 was a loan to the government, immigrants under that category got fast-tracked into becoming citizen.
The government says the outcome of the investor program hasn’t paid off for Canada.
