Geography Reference
In-Depth Information
home, especially if it contained a basement suite as a mortgage helper
(Chow 1998e). No one doubted that the withdrawal of East Asian investment
was the principal cause.
Conclusion
A final argument for setting aside made-in-Canada causes of real estate
trends was the gaping mismatch between local incomes and house prices in
Vancouver from the late 1980s onwards. Despite dramatically rising house
prices, real median family income in metropolitan Vancouver actually fell by
3 percent between 1990 and 2000 (Heisz and McLeod 2004), creating an
unbreachable affordability barrier for many families. The metropolitan
labour market simply did not generate enough steam to raise house prices
through the pressure of local demand alone. In 1990 and 1994 it would
have taken over 60 percent of the median pre-tax income in Greater
Vancouver to service a typical mortgage on a standard detached bungalow,
including property tax and the cost of utilities; affordability would be yet
more severe for a detached two-storey house.
36
This figure had risen rapidly
from under 40 percent as recently as 1986. By the end of the decade the
index remained above 50 percent and rose again by 2006 to match the pro-
hibitive levels of the early 1990s.
Instead, the property price lid was raised by pressure from off-shore
investment, some of it in absentee portfolios seeking asset diversification,
much of it embodied in immigrant households eager to purchase property,
including those landing in Vancouver through the business immigration
streams - whose available 'total money' was estimated earlier at $35-$40
billion. The arrival of these flows of investment and immigration were pal-
pable signs of the maturation of Canada's Pacific Rim policy and the suc-
cess of the nation's struggle for inclusion within the Pacific Rim growth
region. While the scale of this capital relative to city size might be specific to
Vancouver, the research raises broader questions about the globalization of
the property market in gateway cities, and the role of immigration as a
driver of market trends (Ley 2007). Vancouver events also highlight the role
of a power elite in actively facilitating globalization through boosterism and
different forms of persuasion including the output of market-friendly
research centres.
Chapter 4 showed how trans-Pacific economic flows encountered sub-
stantial, often incapacitating, challenges in crossing national borders. The
ability to move money from Asia to Canada was not the problem; for immi-
grant entrepreneurs the ability to make it profitable most certainly was,
within a new national context where variations in economic culture pre-
sented barriers to entrepreneurial success. So too the arrival of real estate
