The Vancouver real estate market has been popular among overseas real estate investors for quite some time. If you are interested but don’t know how to get started, check out this video with Aaron to learn more about the Vancouver real estate market and what to be aware of.
Aaron Wong and is a real estate agent at Regent Park Realty. The firm is located in Vancouver West- Kerrisdale neighbourhood and it has agents who specialize in all areas of Greater Vancouver. Their goal is to provide insightful advice to ensure that the clients are well-informed in making any buying or selling decision. Aaron mainly works with residential clients both on the buying and selling side and specializes in the Metro Vancouver area.
- Different characteristics of the Vancouver neighbourhoods
- The potentiality of different types of investments in Vancouver
- Which areas do overseas investors tend to invest in?
- What to be aware of?
- Tax and mortgages policy.
As it can be difficult to catch some minor errors, transcripts may contain a few typos or inaccuracies.
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Alright, let’s get back to the transcript of the show. Enjoy!
Darren: Hey, Aaron, so welcome to the show.
Aaron: Hey Darren!
Darren: Yeah, so like this is exciting because I used to live in Vancouver and I went to high school in Vancouver so that’s like a one and a half decade by now and then. So I know you through Jerry, my ex-colleague from Vancouver. So this is good because I want to kind of be nostalgic a little bit about Vancouver, what’s going on because Vancouver has been a very hot market and a lot of people here I know in Hong Kong are also from Vancouver as well. And I want to share with them what’s going on. And then maybe for them they’ll think about Vancouver a little bit, miss home a little bit. So I’m really happy to have you here today.
Aaron: Thank you.
Darren: So before that, right, would you mind telling the audience a little bit about yourself and your work?
Aaron: Yeah, so my name is Aaron Wong. I was actually born in Vancouver, so I’m very familiar with the city. I’ve Pretty much lived here for my whole entire life and in terms of real estate, I started doing it actually straight out of university. So I’ve been working on it for almost a fifth year now, actually. So five years in the business and working in a medium sized brokerage where mostly residential focused and we’re located in Kerrisdale. So we specialize with a lot of ties in the area. But in a brokerage, we also have agents who specialize in the tri-cities and other parts of Vancouver as well.
Darren: Hmm. I see. So for some audiences that may not know much about the different neighbourhoods in the greater Vancouver area, which obviously would be great if you can describe a little bit about the greater Vancouver area. Would you mind telling them about how is the neighbourhood like and then where like the overseas investors tend to invest?
Aaron: Yeah, for sure. So Vancouver how you would think about it is that we’re actually in a Greater Vancouver area, what they usually call it. And within the greater Vancouver area, you actually have different cities. So one of them, of course, being the city of Vancouver. So that’s the main city center of Greater Vancouver. And then it branches out into other cities such as Burnaby to the east, Richmond to the south. And then you also have the tri-cities, which is further to the east and that’s around Coquitlam, Port Coquitlam and also Port Moody. So usually I find that overseas investors, they tend to focus in Metro Vancouver a lot. So that would be in the city of Vancouver, Burnaby, as well as the Richmond areas, just because, you know, those are the areas with the most density in the redevelopment right now.
Darren: I see. So a few topics, a few people around my circle, there’s always tea talking about Vancouver real estate. And then what’s the reason behind this trend that is booming recently and how do you think it will evolve in the next couple of years?
Aaron: Well, right now, I think a lot of people see Vancouver as very attractive because first of all, you know, you’ve been a Democrat before. You know, the lifestyle here is very healthy, relaxed. You know, we have air and water, a lot of cultural diversity. And also I find that we have quite a few good schools here. And a lot of people, when they move here, it doesn’t have any parts of the world they can kind of feel at home in certain neighbourhoods one way or another. So from the trend, I think, especially this past year, we had a lot of investors, especially from Asia, Hong Kong, and they’re just looking to relocate here just could be as they just like the city.
Darren: I see, you know, like I always remember the Vancouver lifestyle is Lululemon and good vibes. You know, there’s no problems, relaxing everyday is very similar. The weather in the winter is a bit gloomy sometimes, but summer is beautiful, it’s a paradise. So, you know, by being said, right, do you think there are some areas in Vancouver that are a bit overrated, overpriced at the moment?
Aaron: Well, right now, it’s kind of interesting because we just came out of a three month city lockdown and then so the real estate market has kind of started to pick up again. But in general, I mean overrated, a lot of investors tend to focus on West Vancouver and Vancouver West just because, you know, being in a more higher end and prestigious area. So even until today, when we had the market peak back in 2016-2017, some of the prices are still fairly overinflated in those areas. So, I mean, I wouldn’t say that necessarily it’s overhyped. Whether it’s just, you know, some of the pricing you have to be careful what you’re buying into, because a lot of the investors are trying to maybe liquidate some assets and then you may or may not be getting the best deal depending on what homes you’re looking for.
Darren: I see. So, you know, just now you mentioned a lot of people are coming, moving to Vancouver and moving to different places and stuff like that. So do a majority of your investors tend to be moving there or and also too right, with that, how would you suggest differently for investors applying to be either self or investment only?
Aaron: Well, I work with a couple of different groups, so some of them, they’re mainly based overseas and they’re looking for investment only properties in the Vancouver area. And so these investors, we tend to focus more on the numbers, rental return, rental stability, kind of lower vacancies, whereas there’s another group of investors where they plan to purchase a home here, whether or not their children are coming over for school or they maybe eventually plan to retire or leave and make it work part time. So it sounds like there’s a few different focuses, of course, the main element being the overall value of the property, but also it becomes a lifestyle, too, because we have so many different neighbourhoods. It really depends on what works for them as lifestyle, what kind of place they prefer, and usually this is more of an emotional purchase because they do tend to live in the property, so a little bit of mixed up with clients, little bit of a different approach, depending on whether it’s just a pure investment or investment/principle residence.
Darren: I see, I have done a lot of interviews so far, and I always want to have an episode that we can deep dive into the cities. Like in my head I was thinking about maybe having a Google maps, we share it with your screen and then you can go through, walk through the block and street with me. It’s something that we can do in the next episode in the future. But then let’s go back to this, because I think that for a lot of investors, they want to know where to start, because Vancouver obviously some investors in Hong Kong look into Toronto, Vancouver, US, Malaysia, Singapore, a lot of different places. So this episode will be focusing on very high picture, high level picture. Obviously, at the end of this episode, we can ask them to talk to you more about what’s going on in detail. So I have another question like what are some things that oversea investors should be aware of when assessing the opportunities in Vancouver? You know, it’s something that I think they’ll appreciate if you can give them some pointers for that.
Aaron: Yeah, I think one of the biggest parts that overseas investor, because, you know, Canada in general, especially B.C., we actually have a lot of different types of taxes, especially types that deal with real estate. Now, the biggest thing is that if you are an overseas investor and you’re not a citizen or a PR, there is an additional 20% foreign buyer tax. So when you think about some of the price of the property, a 20% tax is actually quite a big premium right. So then I would say first of all, it’s best to talk to ,of course, a real estate professional and then they can suggest you ways to structure your purchase in order to minimize the actual closing costs and other aspects of purchasing the investment property.
Darren: Hmm, I see. So go back to that because tax is obviously a big subject and a lot of people will always be like, “Okay, tax, how much is this?” So, like, just now you mentioned right, I heard there’s a new high-end home tax like what’s that about.
Aaron: Ok, so the high-end home tax is funny, they call it that, because whenever you’re purchasing a property in Vancouver or in the metro Vancouver area, they have what you call a property transfer tax. So then the buyer actually has to pay the government a tax to transfer the property to their name so you know this is the buyer bearing those costs. And so traditionally these taxes they’re tiered, of course, you know, just like our income taxes. And what the government decided to do and I think February 2018 was that they added another tier to the property transfer tax. So normally, let’s say you’re buying a house, two or three million dollars. You’re paying your first tier, which is the one percent on the two hundred thousand. And then you have the two percent from two hundred thousand to two million. And then usually you’re pretty much set unless you buy something even higher. So now what they have is that above three million, there is another tax that they add another two percent on there. So you end up paying more of a five percent anything above three million dollars and it could really add up to the total.
Darren: That’s pretty expensive. Jesus.
Aaron: Yeah, yeah, it’s hard to explain in a short video, but the more expensive the property, the more expensive the taxes, just like how B.C., also introduced a luxury car tax because it’s getting kind of crazy you know.
Darren: Yeah, well before that too, I actually neglected a little bit like would you mind telling the audience about the property transfer tax and then how it works?
Aaron: Yeah, so property transfer tax, so usually these costs are costs that the buyer should be aware of, because when you’re buying any kind of property in Vancouver, there is a property tax upon closing. And the only exception is if you’re buying a piece of property under seven hundred fifty thousand dollars and you’re going to plan to live in it as a personal residence then the tax is exempt. But in most cases, you do have to pay the property transfer tax, whether you’re buying a commercial property or even any kind of residential property.
Darren: I see. So I think that the tax is a big topic and I’m sure people can reach out to you more about that in detail. But I want to know more about the lockdown. How does that affect the market like where are the opportunities for investors now during this time with the pandemic?
Aaron: Oh well, it’s interesting because it’s been a long time, I think a lot of people who are just across the lot of the busier metropolitan areas, they explain to me the prices to maybe go down or soften, but with Vancouver it was actually quite resilient. I mean, there was overall less listings on the market during the few months because, of course, you don’t want people going to view during that time, right. But overall, I think there was less affect of the prices. They haven’t really dropped much. And with now the lockdown coming down, people are actually coming out in waves and buying again. And we’re seeing actually quite a lot of activity in the market from that.
Darren: I see, I see. Okay, that’s good. I want to know right, because I kind of lost touch in Vancouver for awhile. I’m kind of embarrassed to say that because I’ve always had Vancouver in my heart, are there any hip places that attract a lot of younger crowds that are willing to pay more in rent? And then in addition, What are some places that have a lot more commercial activities that people should look at?
Aaron: So I mean, in terms of the younger audience, of course, Vancouver, downtown, it’s very popular because that’s where all the nightlife and the central business district is located. So I would say Yaletown has always been very popular amongst the younger crowd and recently actually they’re developing part of East Vancouver called Main street and Kingsway, I’m not sure if you’re familiar with the area still, Mount Pleasant area. And they’re building a lot more of Boutique buildings there and it seems to be attracting quite a lot of the young crowd. So that seems to be pretty popular with some of the younger investor clients or even people looking for a first home.
Darren: I see. I think I’m selfish because I kind of want to ask for myself if one day I move back so I know where to go.
Aaron: We’ll definitely do a big, a good tour of the city before you decide.
Darren: I got to browse on the Google Maps, like which street exactly, how fast they go to different bars and clubs and stuff like that. So, you know, it’s funny, right? So Vancouver has been promoting a lot right past few years about Silicon Valley and Hollywood of the North, right. There are a lot of startups in Vancouver. There are a lot of people always trying to shoot videos and movies in Vancouver now, is that still relevant? And how does that affect commercial activities regarding the residential side?
Aaron: You know, it’s definitely still relevant because right now, actually, Amazon is still working on their office in downtown. So then they bought that old Canada Post site and then now they’re developing into a really big Amazon office space. And, of course, they have the Microsoft Office that was recently set up a few years ago. Facebook is moving in here, Apple pretty much like they call the Silicon Valley of the north. You know, they’re Vancouver based. And within the film industry, it’s well, maybe not as active in these last few months, but in general, there’s actually a lot of opportunities, real estate wise, especially in a short term rental market, that a lot of these celebrities are movie stars. They would always looking for short term housing and it’s actually quite a lucrative business for some of those landlords.
Darren: That’s good. That’s good. It’s something that I didn’t know until I moved back away from Vancouver. I was like, oh, I didn’t know that big scene at the moment. Obviously, real estate and mortgage come hand to hand right, What are some tips you have for overseas investors when it comes to getting a mortgage?
Aaron: I will say for the mortgage, because right now the banks, they’re usually pretty open to foreign investment, they always have new investment programs for foreign investors. So I would say the most important thing is that you can talk to a mortgage broker or existing banking relationship with the Canadian bank. Definitely check with them first to just see your eligibility and then you can go shopping from then on with your budget.
Darren: I see. Okay, and then like I think there are a lot more questions in my head, but obviously I’ll save it for next time and then we can do this whole Google map browsing around, see the street going on stuff like that in the next episode. So I want to know right, what kind of tips and advice would you have for the audience when it comes to investing in Vancouver?
Aaron: I would say the biggest tip of our real estate, definitely you want to be making an informed decision no matter what you’re investing in right. And one of the things I find with overseas investors is that a lot of them, they don’t seem to be used to working with agents, because I know that, for example, in certain markets, especially with the representation, they’re worried, that they have to pay more fees and all that stuff for a buyer’s agent to take them around right. But actually how it works in Vancouver is that for you to be represented as a buying party actually doesn’t cost them anything for professional advice, which is why I always recommend, you know consult a buyer’s agent to take you around because they know what they’re doing and they can make sure you’re fully represented. And pretty much warn you of any kind of caveats or, you know, things with certain properties that you plan to invest into.
Darren: I see, I think that is good because people keep forgetting that, people keep asking around and stuff like, but maybe they should just talk to you. People should talk to you more on what’s going on. So I know I’m just curious because we have phone calls a couple of times before. Like, I just want to know, what else are you working on besides being a real estate agent or, you know, as a whole?
Aaron: Right now, actually, I have a few side projects. One of the things is that I’m also looking into small businesses, so I actually have a few clients who are looking to actually acquire businesses. So, you know, being in the network where we also work with small business owners. This is kind of something I’m working on on this side as well, on top of this residential sales and whatnot.
Darren: I think that’s awesome. I think that a lot of people in real estate keep forgetting that you know, you have these different exposures to people who have the money in the capital and then a lot of people have good ideas so I think it is a good time, especially in a recession. So a lot of good companies tend to respond when times are like this. So I think that this episode actually have a lot of good buy size information. What kind of takeaway would you like the audience to have in this whole interview so far?
Aaron: I would say takeaway points, definitely, if you haven’t been in Vancouver, visit the city, especially summertime, you know obviously winter can be a little bit cold and rainy, but most likely people who visit say they definitely fall in love with it. And, you know, in terms of real estate, it’s a very popular thing here in Vancouver. And I always encourage touring different neighbourhoods, see what you like because, you know, Vancouver, there’s lifestyle at the end of the day, right? If you’re planning to invest or move over to the city and another take away of course, you know, just to reiterate, if you plan to buy property, always have someone representing you do not walk into a random open house or call an agent, because most of the time you may not be getting the best representation for the, you know, your property purchase.
Darren: That’s good. And how would we suggest the audience to reach out to you when it comes to learning more about the Vancouver real estate market.
Aaron: You can contact me through my brokerage website, I have my email and phone number there. For the younger audience, you can also Instagram, although I should be updating that more often, but I can send you the information after the interview.
Darren: Yeah, I’ll put everything in the show notes and then I just want to say thank you because I know we never met in person, we’ve had a couple of phone calls and everything and thanks, but Jerry, if you listens to this for introducing us and then I want to do another part two in the future about really deep dive into neighbourhoods, because not only for myself, I think a lot of people would appreciate it and learn for example, Vancouver has so many different neighbourhoods within even the city itself. So thanks again for your time and I really appreciate it. And then I hope that you can join us for the next episode.
Aaron: Yeah, most definitely. Thanks for the interview.
Darren: No, thank you. Thanks a lot. Talk to you later then. Good day, bye.
That’s all for today. See you later!