Why is the Richmond market so hot?
By Martin van den Hemel
Richmond Review - Thursday, February 17, 2011
It's a puzzle that's left many realtors scratching their heads: What triggered the local real esate boom last November that's seen house prices jump hundreds of thousands of dollars in just three months?
The Ming Pao Daily, in a joint investigation with The Richmond Review , has learned that the local boom coincided with the introduction in Hong Kong of a special duty intended to curb speculation in residential properties.
The 15% duty on properties resold within 24 months of acquisition was introduced Nov. 19 by the government of Hong Kong.
According to Ming Pao, property flipping is common in Hong Kong and has contributed to numerous housing bubbles over the last decade.
Richmond realtor Austin Kay said he has quite a few clients from China, but he wasn't aware of the new duty introduced in Hong Kong.
"Timing wise, I'm not sure if it's just a coincidence."
But Kay said that would help explain some of what has happened in Richmond over the past few months.
The bulk of the investment money is coming from mainland China, he said, and perhaps instead of those investors sinking their money into Hong Kong, the cash is rediverted into Richmond.
Ming Pao reported that investors may be bringing their flipping practices to Richmond, where Chinese buyers are familiar with the practice.
One local firm that's actively re-selling properties prior to the deal's completion date is also offering investors and homeowners another option.
As reported in Saturday's Richmond Review, New Land Strategies has upwards of 10 properties on the market, none of which were listed on MLS, the multiple listing service commonly used by most realtors.
Now New Land is pitching a real estate investment club that "guarantees" a 10% return on investment. Prospective clients are told that they only need to pay 80% of a property's down payment, and the club will pay the remaining 20%.
The incentive is that New Land claims to have connections with rich investors from China, and the goal is to drive up property prices and thereby sell at a higher price to the end buyer.
One realtor, who spoke on condition of anonymity, said that New Land's activity has angered many honest, seasoned realtors. The realtos said New Land is responsible for much of the rising prices currently being seen in Richmond's housing market.
New Land could not be reached for comment.
Richmond Review - Thursday, February 17, 2011
It's a puzzle that's left many realtors scratching their heads: What triggered the local real esate boom last November that's seen house prices jump hundreds of thousands of dollars in just three months?
The Ming Pao Daily, in a joint investigation with The Richmond Review , has learned that the local boom coincided with the introduction in Hong Kong of a special duty intended to curb speculation in residential properties.
The 15% duty on properties resold within 24 months of acquisition was introduced Nov. 19 by the government of Hong Kong.
According to Ming Pao, property flipping is common in Hong Kong and has contributed to numerous housing bubbles over the last decade.
Richmond realtor Austin Kay said he has quite a few clients from China, but he wasn't aware of the new duty introduced in Hong Kong.
"Timing wise, I'm not sure if it's just a coincidence."
But Kay said that would help explain some of what has happened in Richmond over the past few months.
The bulk of the investment money is coming from mainland China, he said, and perhaps instead of those investors sinking their money into Hong Kong, the cash is rediverted into Richmond.
Ming Pao reported that investors may be bringing their flipping practices to Richmond, where Chinese buyers are familiar with the practice.
One local firm that's actively re-selling properties prior to the deal's completion date is also offering investors and homeowners another option.
As reported in Saturday's Richmond Review, New Land Strategies has upwards of 10 properties on the market, none of which were listed on MLS, the multiple listing service commonly used by most realtors.
Now New Land is pitching a real estate investment club that "guarantees" a 10% return on investment. Prospective clients are told that they only need to pay 80% of a property's down payment, and the club will pay the remaining 20%.
The incentive is that New Land claims to have connections with rich investors from China, and the goal is to drive up property prices and thereby sell at a higher price to the end buyer.
One realtor, who spoke on condition of anonymity, said that New Land's activity has angered many honest, seasoned realtors. The realtos said New Land is responsible for much of the rising prices currently being seen in Richmond's housing market.
New Land could not be reached for comment.