Bentleys and Bordeaux: Chinese newcomers drive Vancouver's luxury market
By Elizabeth Dilts and Julie Gordon
VANCOUVER (Reuters) - At a luxury car dealership in Vancouver, a 19-year-old college student recently traded in his 2014 Ferrari for a 2016 Bentley that cost C$350,000 ($268,446).
MCL Motor Cars Manager Scott Warren says the teen was his typical customer: young, Chinese and eager to swap a relatively new car for an even newer, trendier model.
"They don't mind taking a C$75,000 hit," he said, noting that some brand-sensitive teens change cars every few months. "They just trade them in and dad puts the money in their account."
While Vancouver is often called the gateway to Asia and has been a top destination for wealthy Chinese immigrants for some time, the boon for luxury retailers this year is particularly noteworthy given the summer plunge in the Chinese stock market and President Xi Jinping’s campaign against corruption.
The crackdown, which has included Chinese demands that Canada arrest and deport former Chinese officials accused of corruption, has had no apparent impact on demand for everything from C$350,000 Bentleys to C$3,000 bottles of wine.
But cracks could be starting to show. Detached home sales volumes in the city of Vancouver fell 41 percent from June to September, with listings down just 3 percent, the largest drop in sales for that period since 2008.
Real estate agent Tom Gradecak, who sells on Vancouver's affluent westside, says it "feels" like the market has slowed, but prices have not dropped yet.
"It could be the Chinese stock market - probably is - but it could just be a bit of a breather from an insane first part of the year," he said, adding that he just sold a home for C$300,000 over the asking price with seven competing offers. Continued...