What is a millionaire? Most would describe them as an individual with assets worth $1 million or more. However, politicians are using the term “millionaire” to describe an individual who makes more than $1 million a year. They are labeling these individuals as taxpayers that are in the “millionaire’s tax bracket” but there is a big difference between these two groups of millionaires. Obviously, the individual who makes $1 million a year is in an elite group of earners.
Countries, governments, and cities around the world prosper significantly from millionaires but the real miracle of a millionaire is when individuals or households are earning in excess of a $1 million per year. In 2015, approximately 400 households in the US earned more than $1 million per year, while 1 out of 15 households has more than $1 million in assets. The big earners are the difference makers. They are consumers of all things, from expensive dinners and retail goods to real estate and anything in the goods and service industries. Moreover, they pay more than their fair share of taxes. The miracle of millionaires is that they bring a higher level of financial success to the economies that they are a participant in.
Migration of millionaires is on the rise over the last number of years. In 2015, 64,000 millionaires relocated to other countries around the world and in 2016 the numbers increased to see 82,000 millionaires relocating or immigrating. These mobile and wealthy individuals do not like uncertainty and are fleeing for countries that can offer them security. The six top reasons for their exodus are education, healthcare, climate, cleanliness, personal safety, and financial security. They are relocating to countries that excel in these six areas.
The top five countries that are losing their wealthy are France, China, Brazil, India, and Turkey. France tops the list for the second year in a row. The French tax system is super unfriendly to the rich, and religious tensions and terrorism continue to rise making for an exodus of a whopping 12,000 millionaires in 2016. China had 9,000 millionaires flee. Meanwhile, Brazil with its massive economic issues forced 8,000 of the wealthy to look for safe havens for their money. India and Turkey each had 6,000 millionaires flee. Turkey is undeniably beautiful but unfortunately, they’re in a constant state of crisis with terrorism growing on a monthly basis. This bumps it down the list of safe countries to live and trade in.
If these countries are the losers of the wealthy, who are the winners? Australia, USA, Canada, UAE, and New Zealand. These five countries excel in education, healthcare, climate, cleanliness, personal safety, and financial security. Australia saw the largest gain with an intake of 11,000 foreign nationals in the millionaire bracket, USA saw a gain of 10,000, Canada was third with a gain of 8,000, UAE saw a gain of 4,000, and New Zealand brought up the rear with a gain of 4,000 millionaires. Miracles do happen in these countries because of the immigration of millionaires.
These ultra-rich immigrants have the big bucks to spend. They may not be the big earners within the country, however they are still difference makers. Like the big earners, they are consumers of all things. On the downside, they may not pay their fair share of taxes. However, they do contribute by helping residents of the country earn a better living through their consumption. In return, helping the locals earn more and then contribute more in taxes. Essentially, foreign miracle millionaires are creating new local miracle millionaires. Remember, the miracle of millionaires is that they bring a higher level of financial success to the economy that they are a participant in. In the end the country, government, and the region prospers.
Vancouver and the Fraser Valley have been huge benefactors of the foreign miracle millionaire, or more appropriately, the miracle multi-millionaire or even miracle billionaire. These wealthy foreigners have significantly transformed and shaped the Greater Vancouver area over the last few decades. Some critics would say for the worse. However, many of us have benefited by these individuals. For instance, Vancouver has an incredible food and restaurant scene offering expensive, over the top, multi-cultural, and fusion gastronomic experiences, but also offers locally grown and simply inspired dishes, and street and food truck vendors. These culinary experiences are a direct result and influence of the foreign millionaire.
The quality and quantity of Vancouver’s shopping and retail markets can also be traced to the miracle millionaires. In fact, Vancouver is the luxury car capital of North America. ICBC claims that there are more than 2000 cars registered in Metro Vancouver that are worth more than $150,000. In West Vancouver, one in every 142 people owns a luxury vehicle. In Richmond, it’s one in 577, while in Vancouver it’s one in 615. The consumption of high-end goods and services by the miracle millionaires directly results in the creation of local Vancouver miracle millionaires.
The most noticeable miracle is the miracle of Vancouver real estate. The miracle millionaires certainly have influenced the Vancouver and Fraser Valley real estate market. Over the last 10 years, prices have risen approximately 100%! Market appreciation on this scale only occurs and sustains with miracle millionaires. The question is, will this miracle market continue? And, if so, for how much longer?
The February market in the Greater Vancouver and Fraser Valley followed the trend that was set in January of 2017. Sales volume and new listings for single family were both down significantly. Much of the Vancouver single-family market was in a buyer’s to balanced market. Meanwhile, the more affordable Fraser Valley enjoyed a more robust February market with the majority of areas in a balanced to seller’s market. Townhomes and condominiums in both Vancouver and the Fraser Valley finished in a strong seller’s market. The strongest sub-area in Vancouver was North Vancouver with single family STR (Sell Through Rate) at 25%, townhomes STR finished at a super strong 46%, and North Vancouver condominiums at 41%. In the Fraser Valley, the strongest subarea was Cloverdale with single family STR at 29%, townhomes, again at a super strong STR of 49%, and condominiums in Cloverdale at 44%. When the STR (Sell Through Rate) is greater than 18% the market is considered to be a seller’s market. It is clear from the statistics that we are still in a very strong market, especially in the more affordable sub-areas and property types. I guess we need to thank, or blame, the miracle millionaires for changing, manipulating, and influencing the market over the last number of decades.
Personal Real Estate Corporation
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STR (Sell Through Rate) Formula = Sales ÷ Active Listings + Failed Listings + Sales