With Lunar New Year beginning on Friday, Vancouver realtor Grace Kwok smiles and notes that this year’s zodiac figure — it’s the Year of the Dog — carries with it advice that she would follow year in and year out in the world of real estate: Consider your needs first before consulting the stars.
Under Chinese zodiac lore, if you were born in a Year of the Dog, one of the 12-year cycle of signs, you possess the best traits of human nature. According to the website, www.yourchineseastrology.com, you are honest, friendly, faithful, loyal, smart, straightforward, and you have a strong sense of responsibility.
A one-bedroom condo at 1565 W 6th Avenue in Vancouver listed for $698,000. The overheated entry-level home buying market is being caused by conflicting initiatives from various levels of government, says Dan Scarrow. SUPPLIED
The federal government’s tougher mortgage lending rules and the British Columbia government’s affordable housing measures are working against each other. Ultimately, these moves will hurt first-time buyers the most, says a senior real estate executive with a leading Vancouver-based firm.
Canada’s banking regulator, the Office of the Superintendent of Financial Institutions, says it wants to reduce the risk of mortgage defaults due to high levels of household debt. But applying stricter lending guidelines is making it more difficult for home buyers to access mortgage funds, says Dan Scarrow, vice-president at Macdonald Realty.
Last year, the former Liberal provincial government offered first-time home buyers help in covering the cost of a mortgage down payment with an interest-free loan of up to $37,500 that is payment-free for the first five years, Scarrow said, adding the new NDP government says it wants to continue the program for the time being.
These initiatives, on top of government intervention with the 15 per cent foreign buyers’ tax introduced last year and two interest rate hikes this year, are causing major market distortions, such as overheated entry-level home buying and a cooling of the higher priced homes in Vancouver, he said.
Over the past year, MLS statistics show that the benchmark price for a single-family home in greater Vancouver rose only 2.9% to $1,617,300 while condo prices soared 21.7% to a benchmark price of $635,800.
In the end, all these initiatives are hurting the very people that various levels of government are trying to help, says Bill Dick, managing broker for Macdonald Realty.
“Since many of the government reforms have been implemented, the top end of the market has softened while the entry level has performed extremely well,” he said.
While Macdonald Realty realizes there is a place for some government intervention in the housing market, it is against the mortgage regulation changes that it sees as unnecessary, especially considering that Canadian banks have long been recognized globally for managing their business well.
“The regulators have arbitrarily insisted that buyers undergo stress testing that artificially limits the amount that they can borrow, making it harder for first-time buyers to compete with already wealthy landowners,” Scarrow says. “The banks have their own risk assessment and they have made the determination that these are acceptable risks and returns that they are willing to take.”
Macdonald Real Estate Group employs more than 1,000 people in over a dozen real estate offices across British Columbia. Last year, sales volume exceeded $8.9 billion while assets under management grew to over $5 billion.
This story was created by Content Works, Postmedia’s commercial content division, on behalf of Macdonald Realty. The article was originally posted on vancouversun.com November 6, 2017. Written by Michael Bernard.
At least one major Vancouver real estate firm believes that the election results mean that housing policy in the province will remain uncertain for the foreseeable future.
“The one thing you want the government to provide is certainty in policy,” said Dan Scarrow, vice-president of Macdonald Realty, which has almost 1,000 staff and agents throughout B.C. “This election result means that housing policy in the province will be up for negotiation between the three major parties.”
Scarrow said many believe that government holds the solution to issues like affordable housing. He said the reality, however, is that governments’ power, particularly the power of provincial governments that do not control either immigration or interest rate policies, is limited because there are so many forces that impact the real estate market.
“People have already forgotten that when the 15-per-cent foreign buyer tax came in, it was a shock to the system,” he said. “At the time, even the most vocal critics of foreign investment in Vancouver acknowledged that this was a far bigger move than anyone could have anticipated. And now, less than a year later, it has had no discernible impact on demand.”
Scarrow points to examples all over the world of cities struggling with affordability. “The one commonality seems to be that governments are incapable of stopping demand. Draconian policies to restrict demand have been tried in Hong Kong, Singapore, Sydney and many first-tier cities in China with limited to no effect. Vancouver can now be added to this list,” he said.
In fact, some argue that local governments often make things worse by artificially restricting supply. The 13th Annual Demographia International Housing Affordability Survey: 2017, which ranked Vancouver as the world’s third-least affordable market, states: “The affordability of housing is overwhelmingly a function of just one thing: the extent to which governments place artificial restrictions on the supply of residential land.”
Scarrow said that affordable housing is a complex problem for which there is no easy solution. “Everyone’s definition of affordability is different,” he says. “So if no one’s defined the end goal, we just end up building a highway to nowhere.”
Ultimately, regardless of what policies are eventually introduced, the issue of affordability will likely remain. Says Scarrow: “I expect to see this as a major election issue in 2021. And 2025.”
The article was originally printed in The Province newspaper on May 11th, 2017 and posted on vancouversun.com May 12, 2017. Written by Michael Bernard.
Vision and hard work – that sums up how Lynn Hsu grew a real estate company from one office to 20 offices and 1,000-plus employees, making it Western Canada’s largest full-service brokerage firm
As seen in… Profiles of Excellence 2017
Originally from Taiwan, Hsu immigrated to Canada in the late 1970s – alone, with no family or friends, no job prospects and speaking little English. Today, she has turned Macdonald Realty into Western Canada’s largest full-service brokerage firm.
From the moment Hsu purchased that single boutique residential firm, she had a vision.
“The real estate industry has two distinct businesses – one creation, the other servicing. On the servicing side, almost all the companies in BC were a single-purpose company, i.e. residential or commercial brokerage, property management or project marketing firms,” says Hsu. “I wanted to create a company that could provide our clients all-encompassing real estate solutions under one roof –from guiding a home buyer through the biggest investment of their lives, helping an investor manage and add value to their properties, to assembling ground intelligence to assist developers to create the right products for the marketplace.”
Today, the company’s interests encompass residential sales, commercial sales and leasing, property management, strata management, development and project management, project marketing and mortgage brokering and lending. It now includes the Macdonald Commercial and Macdonald Realty Platinum Project Marketing divisions.
Dan Scarrow, vice-president, says it’s Hsu’s ability to hire the right people that also helped propel her to the top of the industry. “Lynn has always understood how important it is to empower employees. She is a leader who inspires people through a shared vision and she has created an environment where people feel valued and fulfilled,” says Scarrow. “Her strongest point is that she has never wavered from her commitment to serve and protect our customers.”
Hsu believes that a business model based on a fundamental principle of upholding the highest standard of excellence, coupled with a strong conviction that every problem has a creative solution, would allow Macdonald Realty to grow organically. “When you have the belief and knowledge that you are doing your best to adhere to your core values, problems, rather than deflating you, energize you to action,” adds Hsu.
Hsu went on to explain: “Professionalism and integrity mean a great deal to me and my entire team. They are our company’s core values.”
As the demands of the BC real estate market change, realtors and their respective real estate agencies must react accordingly to stay in the game. For one agency, this meant thinking outside of the box and stepping out of its time zone.
When Macdonald Realty opened its office in Shanghai, China, last year, it was branded as “The Canadian Real Estate Investment Centre.” But Dan Scarrow, who manages the Shanghai office, says that his Chinese clients had their own words to describe it. Impressed with the office’s scope, they say that it covers “an entire dragon of services.”
Those services include residential resale, commercial sales and leasing, new development project marketing and property management. While American, Australian, New Zealand and European real estate companies had established offices in China, Macdonald Realty was the first company in China with a sole focus on Canadian real estate. The company decided to open the office as a response to their clients’ desire for better access to the Chinese market.
Scarrow is uniquely qualified to run the office. He has been working with Macdonald Realty for nearly 10 years, and has worked as an executive assistant for the CEO, and as a residential and a commercial agent. He is a born-and-bred Vancouverite, but he is half Taiwanese. “The upshot is that Mainland Chinese see me as a white Canadian, but I’m also able to communicate with them in Mandarin,” he says. “I guess you could say that, in China, I am an authoritative foreign curiosity and hence memorable.”
His company, says Scarrow, has several competitive advantages. “Our intimate knowledge of the market is what makes us uniquely valuable to investors here,” he says. “We are small enough to be agile, but big enough to provide a full range of brokerage, management and advisory services.”
Scarrow works with Chinese clients who are in the process of immigrating to Canada, with new Canadians and with pure investors. Those interested only in investment tend to look at new condos and commercial properties. “What resonates with investors in China is the perception of Canada as a safe and secure investment climate, in contrast with China’s robust, but volatile, environment,” says Scarrow.
In order to stand out in today’s highly competitive real estate market, Macdonald Realty has undertaken several innovative marketing strategies. As technology has made property information widely available to the public, Scarrow notes that the role of the real estate agent has shifted: from gatekeeper of information to interpreter and negotiator. To meet the demands of those roles, Macdonald Realty has been working with an outside training organization to offer all agents the exclusive Certified Negotiation Expert (CNE) designation. Macdonald Realty has also launched its own magazine called Macdonald Realty Luxury Homes, to help market its luxury home listings in Canada and in China. Produced by the company’s own in-house creative marketing team, the magazine has proven to be a hit.
But from his own experience, Scarrow says that the most important way for an agent to get ahead is to be a competent professional first. “Doing a fantastic job with one client will generate more long-term business than even the most successful email campaign,” he says. “Start with the people who know and trust you, do an unbelievable job for them and continue learning about how to be a professional from the good agents and managers around you.” Dan Scarrow manages Macdonald Realty’s Shanghai office sults just come a lot easier.”
This article was originally posted on BCBusiness, June 12th, 2015.