BUSINESS

Chinese Homebuyers Eyeing Canada Jump By 30%, Despite Foreign-Buyer Taxes

"Chinese buyers still appreciate Canada."

09/13/2017 11:22 EDT | Updated 09/13/2017 11:22 EDT
Ben Nelms / Reuters
A real estate for sale sign is pictured in front of a home in Vancouver, British Columbia, Canada, September 22, 2016. Data from real estate portal Juwai.com shows Chinese interest in Canadian homes jumped 30 per cent over the past year.

Interest in Canadian real estate among Chinese buyers soared 30 per cent in the first half of this year, compared to a year earlier, according to data from Juwai.com, China's largest real estate portal.

The data suggests that neither the foreign-buyer taxes in the Toronto and Vancouver areas nor a crackdown by the Chinese government on cash outflows has slowed the Chinese middle class' voracious appetite for homes abroad.

"People are no longer worried that Chinese are responsible for high local prices, but Chinese buying continues unabated," said Byron Burley, a British Columbia-based vice-president at Juwai.

"Chinese buyers still appreciate Canada. Chinese students are still coming here to study. Chinese investors still believe the Canadian market is a good one, and Chinese seeking a better life are still taking Canada as one of their preferred destinations."

More about Ontario's recently-introduced foreign buyer tax:

The cities with the most Chinese buyer interest in the first half of 2017 were Toronto, Montreal, Vancouver, Ottawa and Victoria.

Interest in Canada grew faster than overall Chinese buyer interest in foreign homes, which grew 8.7 per cent over the past year, Juwai said.

But Canada lost its rank as the number-three destination for Chinese homebuyers, falling to fourth place behind Thailand. The U.S. and Australia remained the number one and two markets, respectively.

Juwai

"The fact that Thailand has pushed past Canada as a favored country for Chinese investment doesn't represent any loss of interest in Canada," Burley said.

"Many of the buyers active in Southeast Asia are new to the market and don't yet have the wealth necessary to purchase in a developed country like Canada, where average prices are much higher."

Of those surveyed by Juwai, 74.9 per cent said they were buying for their own use, while 32.3 per cent said they were buying for investment, and 23.7 per cent said it was for education. Respondents were able to choose more than one answer.

Ambivalent attitude towards Chinese investment


The Juwai data comes as a new poll from Angus Reid shows Canadians are feeling "either ambivalent or skeptical about Chinese investment in this country."

With Canada's federal government holding exploratory talks on a trade deal with China, 35 per cent of Canadians said Chinese investment is more bad than good for Canada, with only 15 per cent saying it is more good than bad. Fully half said it's about equally good and bad.

Angus Reid

Canadians were more likely to feel positive about investment from the U.S., U.K. or European Union than investment from China, the survey found. But Canadians were more pessimistic about trade with Russia or the United Arab Emirates, Canada's largest trading partner in the Middle East.

Fifty-eight per cent of respondents said discouraging Chinese investment would be "worth it to prevent Chinese takeovers of Canadian companies."

Canadians were most positive about Chinese investment in technology, retail and manufacturing, with a majority saying investment in those areas should be encouraged. But very few Canadians agreed that investment in banking and finance (26 per cent) and military/defence (17 per cent) should be encouraged.

The survey did not ask about investment in residential real estate.

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