Qiqi Hong walks past her sleek, blue-tiled hot tub and an infinity pool that seems to disappear like a waterfall into the chilly air above West Vancouver. She leans on the patio railing and breathes in the majestic ocean view that takes in the towering Douglas firs of Stanley Park, the skyscrapers of Vancouver, the Asia-bound freighters anchored in English Bay and – way off in the misty distance – the faint, rugged outline of Gabriola Island.

“We’re in heaven,” says Ms. Hong. “I can’t find any house that can compare to my house.”

The serene West Coast lifestyle did not come cheaply: Ms. Hong’s home cost $6-million. But it is an investment she can easily afford. The irrepressible businesswoman founded a successful lighting-design business in Beijing that thrived in China’s building boom. It now has more than 100 employees. But tired of Beijing’s hectic pace and foul air, she decided to come to Vancouver – after looking in Switzerland, Germany and the United States – on the Canadian government’s immigrant investor program in 2011. She now also owns three other houses on Vancouver’s west side, each valued in excess of $1.3-million, as well as a downtown condo she uses on weekends and lends to visiting friends.

Demand from wealthy migrants from mainland China such as Ms. Hong has helped make the Vancouver area the most expensive real estate market in Canada. The average price of a single-family detached home is $1.26-million, higher than any other Canadian city. The rising flow of foreign capital – stemming from a long tradition of transpacific migration and investment – has turned Vancouver into a truly global real estate market. One large real estate firm calculated that roughly one-third of the detached homes it sold within the City of Vancouver last year went to buyers from China. Vancouver developers and real estate firms have hit the jackpot, and some have rushed to set up offices in Shanghai and Beijing. Some now say Vancouver is a bedroom community for the world.

The upscale Point Grey neighbourhood is on Vancouver’s west side, where benchmark prices for detached homes have soared. DARRYL DYCK FOR THE GLOBE AND MAIL

But Vancouver real estate prices have also become increasingly unhinged from local incomes, prompting concerns about affordability. It has led to middle– and even upper-middle class Vancouverites renting permanently or fleeing for cheaper suburbs such as Burnaby. There is a search for better data on foreign buyers, which is only haphazardly tracked. There is now a heated debate – that includes accusations of racism – about whether anything should be done to curb foreign buying, or if what is happening is simply an inevitable, and welcome, facet of globalization in a free market.

After all, the ebullient Ms. Hong hasn’t just bought houses here. She founded a charity with other wealthy migrants from China; the group just held a Thanksgiving lunch for 1,000 seniors and recently collected $250,000 for a local hospital and pet shelter. She has founded several businesses in Vancouver, including one in real estate, and drives to ESL classes. She’s learning English, and has even joined a protest, hitting the streets during the recent B.C. teachers’ strike. While she stays busy in Vancouver, her husband frequently flies to China to manage the firm.

“In my opinion, I think it’s good for the economy,” Ms. Hong says, noting that the number of Chinese residents on her street has soared in recent years and that the local businessman she bought her house from made a cool $1.5-million more than he originally paid. “In Vancouver,” Ms. Hong says, “the house prices are perfect.”

Chinese entrepreneur Qiqi Hong left Beijing to live in West Vancouver. The $6-million property is one of five that she owns in the city. IAIN MARLOW/GLOBE AND MAIL

Vancouver’s housing boom has much to do with soaring demand for detached homes in tony neighbourhoods. Vancouver’s west and east sides, West Vancouver, Richmond and large pockets of Burnaby have most of the region’s top-tier properties. On Vancouver’s west side, detached home prices soared 51.5 per cent over the past five years to nearly $2.3-million for the benchmark index, which strips out the most expensive resale properties.

Dan Scarrow, who recently opened an office in Shanghai for Vancouver-based Macdonald Realty Ltd., one of the largest real estate firms in British Columbia, makes no apologies for courting prospective home buyers in China. He says 178 of the firm’s 531 sales of single-family detached homes within Vancouver’s city limits last year – or 33.5 per cent – went to buyers with ties to China.

“Vancouver has become a global resort city. The prices have decoupled from local wages,” says Mr. Scarrow, whose mother, Lynn Hsu, moved from Taiwan to Vancouver in 1979 and is now president and majority owner of Macdonald Realty.

As he pursues investors in Shanghai, he intends to steer buyers toward commercial properties if they have no interest in settling down in Vancouver. Some foreign buyers have purchased Vancouver real estate purely as an investment, without occupying the properties or renting them out, but that has triggered some resentment because it’s sometimes seen as detracting from the vitality of a neighbourhood.

But in general, Mr. Scarrow believes the positives of offshore money far outweigh negatives. Baby boomers can cash out at a profit and downsize with enough money left to help out their children. Selling houses also increases sales of appliances, furniture and home renovations. Vancouver’s housing market has become an important ecosystem unto itself, which explains why developers are anxious to keep foreign money flowing.

On the rise: Prices have climbed sharply for Greater Vancouver's single-family detached homes *Benchmark price: September home price index that strips out the most expensive detached resale properties sold on Multiple Listing Service. SOURCE: Real Estate Board of Greater Vancouver Five-year increase in price of Greater Vancouver's detached homes SOURCE: Real Estate Board of Greater Vancouver

The twentieth century’s geopolitical turmoil sent wave after wave of Asian migrants across the ocean. Some fled Mao’s China. Taiwanese moved during cross-strait tension. Sikhs arrived after persecution in India. Many Persians have fled Iran. One of the biggest waves came in the late 1980s and 1990s, as wealthy Hong Kong residents – flush from a housing boom there – sought a more stable home ahead of the 1997 handover.

Hong Kong investment in Vancouver real estate had been going on for years, but real estate companies began marketing massive new developments in Vancouver and Richmond. In 1988, Li Ka-shing, the richest man in Asia, bought the 203-acre Expo 86 site in Vancouver for what would become Concord Pacific Place. David Choi, the entrepreneurial founder of Royal Pacific Realty who sold real estate in Hong Kong, puts it this way: “Hong Kong people don’t vote with their hands,” he says. “They vote with their feet.”

That migration is part of Greater Vancouver’s proud, multicultural history and present cosmopolitan identity: The population in the suburb of Richmond, for example, is now nearly 50 per cent Chinese, the most ethnically Chinese city in Canada.

‘Millionaire investors’

Richard Kurland, an immigration lawyer who works with wealthy Chinese migrants, says “the main difference” between previous waves of Asian immigration to Vancouver and the current flow of wealthy investors is “the mega-size of the [Mainland] Chinese economy.”

The tectonic economic rise of China has created – in the most populous country on Earth – an enormous new millionaire class. And nearly half of all wealthy people in China also want to immigrate to a developed country within five years, according to a Barclays PLC survey.

At least 30,000 millionaires from Mainland China have immigrated to B.C. over the past decade using the federal government’s investor immigrant program, almost all of them settling in Vancouver. The federal program allowed those with a net worth of $1.6-million to lend the government $800,000 interest-free in exchange for permanent residency. The program was ended in the 2014 budget – with a backlog of 80,000 applicants, roughly 80 per cent of which were from Mainland China – but is expected to be relaunched soon.

“We’re going to continue to get a solid supply of millionaire investors,” Mr. Kurland says.

While Chinese demand is practically unlimited, supply in Vancouver – particularly for detached homes – remains restricted: There are mountains to the north, the U.S. border to the south, the agricultural land reserve, multiple rivers and bridges, and the vast Stanley Park. “There’s not a lot of dirt here,” says David Goodman, a principal at real estate firm HQ Commercial.

A 2013 report from Sotheby’s said 40 per cent of Vancouver’s luxury home sales went to foreign buyers – mostly buyers from Mainland China, but also from Iran and the U.S.

Ryan Rosenberg, another Vancouver-based immigration lawyer, says wealthy Chinese see Vancouver as a safe haven. Some immigrants, however, still spend much of their time overseas, especially businessmen who leave their wife and child in Vancouver, he says. At some luxury homes on Vancouver’s west side, he notes, agents have noticed a pattern: A lot of master bedroom closets contain only women’s clothing. “If China is a place to make money, Canada is a place to save it,” he says. “Canadian immigration status is one of the world’s best insurance policies. Vancouver has become an international bedroom community.”

The affordability problem

The Vancouver housing market has been less kind to Brent VanderRose and his wife Amy, who are both nurses. A few years ago, Mr. VanderRose purchased an older one-bedroom, 643-square-foot condo in Vancouver’s Fairview neighbourhood for $385,000. He and his wife Amy loved the neighbourhood and the ability to bike to work, and wanted to start a family there. But they could not afford a bigger place nearby. “It was really disheartening,” he says. “I feel like it’s a Canadian right to own a home.”

The VanderRoses finally decided on a $585,000 detached, three-bedroom home in the suburb of Surrey, but couldn’t sell their older condo before the move-in date. Because they couldn’t afford two mortgages and condo board rules meant they couldn’t sublet their property, they rented out the new house at a $500-a-month loss, moved into a sublet with their newborn, and temporarily sent the cat and dog to in-laws. They finally sold the condo at a loss for $335,000. They are expecting another child, but say they are stopping at two – because of housing costs.

This is typical of Vancouver’s polarized boom: While owners of detached homes see big returns, condo and townhouse owners sometimes see little gains in a flat market, or lose out.

Although it’s surrounded by some of the priciest real estate in the city, the University of British Columbia has been sideswiped by the boom, since many students and faculty can’t find affordable housing. The university launched a housing action plan, pledging to build more affordable housing, but it can do little as prices for local properties rise beyond the reach of even well-paid professionals. Yves Tiberghien, director of UBC’s Institute of Asian Research, joined UBC in 2001 and has two kids, but he is still renting. “I am much less attached to Vancouver, because settling down is impossible,” he says. “An academic salary cannot allow someone any more to buy a family home, especially if you don’t have time to commute far.”

After Hong Kong, Vancouver is now the second most unaffordable city in the world with house prices 10.3 times the median household income, according to a 2014 report from the Demographia research firm. Unaffordability is also a vicious circle. “Severely unaffordable markets are also more attractive to buyers seeking extraordinary returns on investment,” the report says, which in turn raises prices further.

“What is interesting about Vancouver is how disproportionate the affordability issue is, how big the house price is compared to the average income,” says David Ley, a UBC geography professor who wrote a book about Vancouver called Millionaire Migrants.

In his 2010 book, Mr. Ley shows that the rise in house prices were “prised loose” of local factors, and correlate almost perfectly with international migration to British Columbia. Vancouver now has the highest household debt as a percentage of annual income in Canada, he adds, citing a 2013 paper by University of Toronto professor Alan Walks. “In a bigger city, that effect might be a bit more diluted. But here, with 2.5 million people – with limited land for development – it has a huge impact.”

“In my opinion, I think it’s good for the economy,” Ms. Hong says. “In Vancouver, the house prices are perfect.” IAIN MARLOW/GLOBE AND MAIL

The race issue

That outsized impact has led to heated discussions in Vancouver, mainly between those who think something needs to be done about affordability and those who want to keep the foreign money flowing. These debates have been muddied by a lack of data and inflamed by accusations of racism.

They have also been complicated by subtle tensions between Mainland Chinese immigrants to B.C. and earlier arrivals from Hong Kong, some of whom assume wealth accumulated on the mainland is the result of rigged competition in a state-ordered economy, proximity to government officials – or corruption.

The U.S. National Association of Realtors knows that 8 per cent – $92.2-billion (U.S.) – of U.S. housing sales are from foreign buyers, and that Chinese buyers accounted for 24 per cent of that volume. They also know that Asian buyers prefer West Coast property. But in Canada there is no such data. And some like it that way. Developers, Mr. Ley says, have long claimed racism to suppress discussion of foreign investment. One developer says limits on foreign investment would “tread very close” to the Chinese head tax. Others suggest it is racist or inflammatory to even discuss the source country of investment.

“It is racism. Maybe I shouldn’t say that. It’s small thinking,” says Ian Gillespie, the chief executive officer of Westbank, a Vancouver developer with offices in China that built Vancouver’s Fairmont Pacific Rim hotel.

The real estate sector, which has played down talk of offshore investment, does not think foreign capital is an issue. “Just because you have a Chinese name doesn’t mean you’re a foreign investor,” says Cameron Muir, chief economist at the B.C. Real Estate Association.

Many remain unsure about what exactly could be done to restrict foreign buying. Statistics show foreign buying is a Vancouver phenomenon, but higher levels of government with power to act don’t necessarily care. One long-shot candidate in Vancouver’s mayoral race, Meena Wong, who is from China, suggested a tax on empty homes to fund affordable housing.

Some point to Singapore, which recently raised its tax – called a stamp duty – on foreign purchases of local real estate to 15 per cent of the purchase price, with a 5-per-cent tax on permanent residents. The British government, eyeing London, moved in the 2014 budget to have its 15-per-cent stamp duty on foreign buyers apply to a greater percentage of home sales, reducing the target threshold from £2-million to £500,000.

Teranet National-Bank Monthly House Price Index - Vancouver vs Canada Tracks the change in house prices. Not seasonally adjusted. June 2005=100 SOURCE: Teranet National-Bank

David Ren, who made his fortune in telecom equipment and purchased his ocean-side West Vancouver home for about $3-million (Canadian) several years ago, says an open-door policy has brought prosperity.

Sitting on a gold-coloured couch with ornately carved wooden arms, he compares what is happening in Vancouver real estate to Qingdao’s fish market. Decades ago, only locals in his hometown bought seafood and prices were low. As China’s economy took off, Qingdao fisherfolk found they could sell to a global market, and locals saw prices soar.

“It’s globalization. As long as Vancouver welcomes immigrants, there will be people willing to move here – and inevitably prices will get driven up,” Mr. Ren says. “That’s the choice of Vancouverites: Whether we will welcome the benefits that come with this foreign investment, or whether we want to say no to globalization.”

The view from David Ren's patio at his home in Vancouver. IAIN MARLOW/GLOBE AND MAIL

As evening falls over the palatial lots of West Vancouver, Ms. Hong’s guests begin to arrive. Her husband Qing Feng is turning 51. And before the white bottles of Moutai baijiu (rice wine) come out, he is cooking amiably with his 10-year-old daughter, trying to recreate a ratatouille she has seen on YouTube.

He then prepares a feast of a dozen dishes with the wok on their gas stove: A whole fish, various vegetable dishes, stir-fried egg-and-tomato, a bowl of peanuts. Guests, including their friend Mr. Ren, toast Mr. Feng repeatedly. More baijiu is poured. Wine glasses are refilled. Lights twinkle on the far shore.

The ratatouille is roundly praised. But there is something about it that is not quite French. A Chinese guest, a former employee of Ms. Hong’s, asks Mr. Feng if he has tampered with the original recipe. He roars with approval. He has, indeed: Soy sauce, some spices, pork.

“Fusion!” he yells out.

Editor's Note: After the publication of this article, Ms. Hong has now told The Globe and Mail that while she owns the condo and the $6-million house she lives in, a real estate holding company in which she is part-owner, owns the three other houses on the west side.