According to Robin Wiebe, a senior economist with the Centre for Municipal Studies in Ottawa, the answer is “very strong”.
In a commentary posted on the Conference Board of Canada’s website, Wiebe argues that a slowing Chinese economy could take a big toll on Vancouver’s housing market.
He argues that:
“There is a clear correlation between Chinese immigration and real estate activity in Vancouver. In fact, the Chinese immigration peak of 2005 was matched by a peak in existing home sales in that same year. The 42,000 resale transactions that year were nearly 50 per cent above the previous decade’s average and remain a record high for this market. By contrast, Vancouver existing home sales volume was fewer than 22,300 units in 1999 when less than 7,700 Chinese arrived.”
As such Wiebe warns that China’s cooling economy could “be considered as big a drag on the Vancouver housing market.”
However, in an article in The Vancouver Sun Cameron Muir, Chief economist for the B.C. Real Estate Association disagrees. He argues that “the vast majority of sales are generated by people who live, work and raise families here. A [Chinese] slowdown might translate into some weakness, but foreign investors account for just a small percentage of sales.”
Muir does concede that certain neighbourhoods might be impacted. In particular, he thought areas that Chinese investors prefer – such as Richmond and Vancouver’s west side – could be vulnerable to changes in the Chinese economy.
One thing is for sure: if China’s economy does cool, we’ll be watching Vancouver’s housing market very closely.