Vancouver’s foreign buyer tax is encouraging those investors to look outside the lower mainland, according to one report.
Foreign investment is having a growing influence in Kelowna and the Okanagan Valley in general, according to a report by HM Commercial Group.
“The past 18 months have seen a significant increase in Asian commercial and winery property investment in the Okanagan valley, particularly in Kelowna which, according to StatsCan, is now the fastest growing metropolitan area in Canada with a 3.1% growth rate,” the commercial real estate firm said in its October report
. “Kelowna has attracted a good deal of attention in the business media recently, including feature articles in BC Business Magazine and The Globe and Mail.
“Additionally, very low cap rates in the Lower Mainland, compounded by the 15 per cent residential tax for foreign nationals, is driving Asian investment and development into Kelowna and the Okanagan Valley.”
Specifically, the firm said Asian investors are targeting commercial projects in the area, including; a $6.5 million site that has been approved for 161 hotels and 128 condos, the $10 million 300 acre Lake Okanagan Resort, and a $2.4 million downtown commercial building.
“Asian investors are also actively pursuing wineries and golf courses throughout the valley, in some cases due to the prestige they offer. Six vineyards and wineries have been brokered by Macdonald Realty Kelowna,” HM Commercial Group said. “There are numerous examples of large land parcels (often 50 acres+) being purchased, and because in some cases they include functional businesses, they also meet the criteria of the federal government’s immigration and foreign investment policies.
“Although Cap Rates have compressed over the past 2 years, both foreign and domestic investors are flocking to Kelowna because the capitalization rates are much higher than in Vancouver.”