Rapid growth for a young Vancouver developer
Austin Zhang is a 26-year-old developer from northern China whose family came to Vancouver 15 years ago to settle down and start a development business.
His parents purchased a house on the west side of Vancouver, and the Zhangs, who were involved in food manufacturing in China, soon met other people from their home country and developed a strong network of friends. After they rebuilt their own house, they began building other luxury single-family houses for their new friends, and those friends became investors.
If city approvals are given, within the relatively short time they’ve been in Vancouver, the Zhang family will have gone from knowing nothing about the development industry to building some of the region’s tallest residential skyscrapers. Their company, Westland Developments, has built at least 40 houses on the west side. With the help of investor and realtor friends, they scaled up. It started when they purchased old apartment buildings as a land assembly on West Boulevard in Kerrisdale, which they sold to a developer to build the two-year-old McKinnon building. A two-bedroom there is listed for $1.5-million.
They built a successful condo-with-retail mid-rise on West 16th Avenue, where the old Dunbar Lumber was once located. Standing at Vancouver’s highest geographic peak, with unobstructed views of the North Shore, the units sold for a whopping $1,600 per square foot.
Now, Mr. Zhang has launched presales for a 10-storey condominium called the W68 in Marpole, currently the site of a retail building with rental apartments above. He’s also building a couple of major skyscrapers, under review in Burnaby and Surrey. And he has a staff of just six people.
“I do have confidence in the Vancouver marketplace that everything will recover, and those investors that we saw in 2016 and 2017 will come back,” says Mr. Zhang, who now runs the family business. “Vancouver is at the top of the list of where everybody comes to start a new life.”
He wants his young company to have the same brand-name recognition as Polygon or Westbank. He also wants to clear up misperceptions about the Chinese investor who comes to Canada and is often blamed for the increase in property prices.
“Vancouver has always been a destination for Chinese immigrants. And it comes with land-ownership issues, right? A lot of Chinese people believe that you really have to own land. It’s your only real asset. That’s why a lot of Chinese buyers are investing in real estate.
“I think it’s just the mentality, and it just so happens a foreign-buyer tax was put into place. But a lot of people that are investing in real estate are Chinese people here in Vancouver. I wouldn’t go as far as [calling the foreign-buyers tax] racist. But it’s one of those things that get more attention than others, and I think the blame is always pointed towards real estate being one factor that’s inflating costs.
“But then again, the only thing we really need in life is a place to live and food to eat, so I don’t blame people for blaming real estate.”
The foreign-buyer tax, as well as the speculation and vacancy tax, definitely had its impact on house prices, he says. But he believes the impact is short term. The foreign buyer will become active again when prices drop, and extra taxes aren’t so impactful.
“When they were first introduced, we definitely saw a decline in prices, in investment buyers, foreign investment buyers especially, even now. In terms of the deals that we are writing and the ratio of that being foreign buyers, yeah, it has definitely changed, I mean – to a certain point. When that happens prices go down, and once prices go down, those buyers come back, and then the taxes make sense. I mean, maybe it works in a short term, but it may not be something that addresses this in the long run.”
Many countries impose a tax on foreign buyers. Hong Kong has a 15-per-cent stamp tax for foreign buyers. In Singapore, foreign buyers pay an additional surcharge of 20 per cent. Singapore also charges its own citizens an additional stamp tax for owning more than one home.
What it comes down to is land ownership, and who owns it, Mr. Zhang says.
“Somebody has to own the property at the end of the day, right? If it’s not government, then it’s private owners.
“A lot of bad light gets shone onto the fact that a lot of people own multiple homes as a commodity. Some yes, are being used for being flipped, or sitting empty. But a lot of them are being used as rental properties.
“What kind of society would be in if the government owned all the rental housing? It would be like being back in China.”
Mr. Zhang believes Vancouver is appealing because of its low-density lush areas and the fact that residents can fully own the land. Part of the appeal for the Chinese investor is that in much of China, people can only buy leasehold land. Canada offers them the opportunity to own property in perpetuity, he said.
And the fact that he can stand in West Vancouver and look over at Point Grey and see trees instead of a sea of buildings is a unique and enviable quality, he says.
“There are some clusters of high-rises, but the majority of land is single-family. So when you look at that, we are living within the forest and on a global scale that is very rare. Some of those cities like Singapore, like Tokyo, it doesn’t exist anymore.
“I think the city has taken a great approach in retaining that aspect of Vancouver, of Canada. That is why people are attracted to this place. I don’t think if, one day, densification goes up and the parks become condos, then Vancouver may not be as desirable as it is now.”
But he is working on adding density to his plans for a two-building complex at the University of British Columbia, which must include rental. And Westland has two of the region’s tallest multifamily towers under review, with a 52-storey condo high-rise and 22-storey rental tower on Telford Street in Burnaby, and a 50-storey condo tower in Surrey.
“At the end of the day, it’s my city and I want to see it get better in every way that I can. And having the opportunity to build and to develop a 50-storey tower – definitely my friends aren’t doing that yet.”
WESTLAND DEVELOPMENTS/WESTLAND DEVELOPMENTS
Their story, he says, is an equal-opportunity story of immigrants who pulled together to build a thriving development business in a highly desirable city. But he often gets buyers at the show rooms asking if they are offshore developers. His family and their investors are based in Vancouver, he says.
“I’ve always had some opinions about what people thought of us,” he says. “I want to clearly define Westland is a local community builder. We only operate in cities that I know, personally,” Mr. Zhang says.
They are, he says, “a local developer, and not some overseas offshore company that just owns real estate here and is destroying homes for people.”
He says he is proud of the large houses he is building throughout the city and plans to drive his daughter by them one day to show her what her family achieved. And by redeveloping the old apartment buildings he owns, in Marpole, at UBC, and in Burnaby, he can add considerably more units to the rental supply.
“On each project we do we have investors. For a 50-storey tower, we are talking hundreds-of-millions-of-dollars range [in cost], but we are all family friends – friends that immigrated here early altogether with us. It was a very small community back in the early 2000s among Chinese people that immigrated here. So we developed our relationships through those avenues. Our parents knew some of those investors through early English-language programs that they took.”
Mr. Zhang said he has already had to deal with the eviction process. He was directly involved in a long, embittered and public battle with tenants at the site of the upcoming 51-storey Telford building. Some tenants had mental and financial challenges, he says, and hadn’t paid rent for months.
Tenants who are evicted will be offered the option to return to the new buildings at the same rent, in keeping with City of Burnaby policy. He applauds the cities’ efforts to retain tenants, and he’s happy to bring them back to the new building at their old rents.
“This does accomplish my passion, too, because at the end of the day we aren’t just building condos, we are building homes.”
As for the high prices that Vancouver is experiencing, it is simply what happens when the population goes up; demand for housing goes up, and prices increase as demand outpaces supply. It’s a natural evolution of a city, he says. And immigration, and foreign money is coming from everywhere, not just China, he says.
“One of the things that attracted our family in the early 2000s, why we got into house building, was just the beauty of Vancouver, and that’s what everybody sees when coming to Vancouver, to Canada.
“In my opinion, everybody here wants to make Vancouver great, and it is great, and the better it gets, the more expensive it gets.”
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