Geography Reference
In-Depth Information
repatriated with the bursting of the bubble economy around 1990, so the
crisis in the tiger economies led to the retreat of investment to cover home
bases. Spatial withdrawal of capital was already underway in the lead-up to
the end of British rule in Hong Kong, propelled by the stick of Canada's
foreign assets disclosure law and the carrot of an upswing of confidence in
Hong Kong's future, but the flow intensified in the final months of 1997.
Barely a year after filing a report from Hong Kong on the renewal of buying
in Vancouver, the
Vancouver Sun
's Asia-Pacific reporter wrote, 'Offshore
owners of Vancouver real estate are instructing their realtors to liquidate
their holdings here to cover losses in failing Asian financial markets' (Chow
1997g). Collapsed deals, price slashing, and forfeited down payments in
Canada added up to a tactical withdrawal to meet immediate problems at
home. Asian investors, notably from Singapore and Hong Kong, also cut
back their buying in London, contributing to the end of the property boom
there. The sales of London property at Hong Kong hotels, with four sepa-
rate sales events each weekend, were bearing little fruit since the collapse of
the Hang Seng stock exchange in October 1997 (Behrmann 1998).
The 1997 'Asian flu' brought to an end a decade of frenzied real estate
trading between Hong Kong and Vancouver. With negative property equity
continuing well into the next decade in Hong Kong, trans-Pacific invest-
ment declined, even when the Vancouver market took off once again in the
cheap credit boom of the 2000s. Immigration from Hong Kong to Canada
also fell away; from a peak of 44,000 in 1994 there was a rapid decline after
1996 to less than 2,000 in 2001 (Li 2005). Indeed by the end of the millen-
nium return migration to Hong Kong might well have led to net outward
movement. Canadian immigration entered a new period, with Mainland
China becoming the leading source of newcomers, primarily professionals
rich in human capital but much less privileged in financial capital than the
Hong Kong and Taiwanese business migrants. The housing market in
Vancouver sagged in phase with the lull in new demand from East Asia, and
when it took off again in the new century it was driven by a fresh dynamic
of local purchase plus overseas buyers from a range of origins, including the
United States. The larger or more fortunate investors who were able to ride
out the storm in East Asia sustained their Vancouver property as a hedge,
integral to portfolio diversification.
Indeed, one curious feature of this off-shore investment is that it was less
speculative than that of earlier inflationary periods. While speculative
marauders are commonly blamed for price surges, British Columbia data
display an unexpected trend. Quick housing re-sales within six months of
purchase, known as flipping, have declined over the past 30 years.
8
Flipping
as an indicator of speculative intent, already high in the 1970s, reached a
peak of over 20 percent of sales in the 1980-81 price bubble. It then fell
steadily, only briefly exceeding 10 percent in the price take-off in 1989, and
