A newly released luxury real estate advisory counts Vancouver among five global markets it recommends to ultra-wealthy homebuyers investing in properties outside their own countries. In particular, the report from Wealth-X and Sotheby’s International Realty identifies condominiums in the West End and Coal Harbour and single-family homes in the Shaughnessy and Arbutus Ridge neighbourhoods as suitable for prospective investors seeking safe assets with upside potential for value gains.
Based on its research, Wealth-X tallies an existing population of 975 ultra-wealthy individuals in Vancouver. Members of this group, which includes eight billionaires, have an average net worth of US $165 million (CAD $216 million).
The Wealth-X Ultra High Net Worth Residential Real Estate Index — tracking average price per square foot and average price of sold properties in New York, Hong Kong, London, Singapore, Dallas, Mumbai, Los Angeles, Paris, San Francisco, Washington, D.C., Palm Beach, Monaco and a composite index of country estate properties worldwide — rose by 8.3 per cent from June 2014 to 2015. Average housing prices in Vancouver increased 12.3 per cent in the same period, but are still three to five times less expensive than in London and New York.
Luxury market analysts predict Vancouver will attract still more ultra-wealthy homebuyers from Brazil, Russia, India, China and South Africa — known as the BRICS nations — who currently face economic and/or political turmoil at home. Notably, China’s Shanghai Composite Index has fallen sharply since mid-June, making real estate in another country something of a hedge against the volatile equities market.
“Luxury homebuyers of international origin are motivated by both financial and family security,” the Wealth-X/Sotheby’s report states. “Canadian real estate is regarded as a safe and secure financial investment. At the same time, many of these homebuyers want their family and children to live in a city that is renowned for its liveability.”
Sydney is likewise promoted as a stable locale for investment diversification, while Sao Paulo, Malta and the Bahamas are touted for policies that offer clearance for residency and/or opportunities to obtain citizenship to offshore homebuyers. “All offer great appeal and opportunities for ultra-wealthy individuals who are seeking to purchase luxury residences overseas,” observes Wealth-X chief executive officer Mykolas Rambus.
Of the two Pacific Rim cities, Vancouver appears to offer the bargains. The average price of listings in the $1-million+ range is US $ 3.3 million (CAD $4.6 million), equating to US $1,063 (CAD $1,392) per square foot. In Sydney, the average $1-million+ listing is US $ 6.6 million (CAD $8.65 million), translating to US $1,468 (CAD $1,923) per square foot.
However, those numbers also indicate that listed luxury properties in Sydney are typically much larger — averaging nearly 4,500 square feet versus slightly more than 2,000 square feet in Vancouver. This may point to the prevalence of condominium units in Vancouver’s luxury residential sector.