Photo: James Bombales
Foreign investment has often been overestimated as a factor in high Canadian real estate prices. Non-resident ownership across all property types was just 4.8 per cent and 3.4 per cent in Vancouver and Toronto, respectively, last year, according to Statistics Canada.
Nevertheless, Chinese buyers did inquire on $1.45 billion of property last year, according to a new report from Chinese real estate website Juwai.com.
The most viewed listing on the site came in at the hefty price of $18.9 million, with other properties falling to as low as $500,000.
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The report notes that the majority of Chinese home buyers are looking for homes to live in, rather than to purchase as investments. Many are looking for homes for their children, who are studying abroad.
“Chinese parents often buy property for children studying overseas, and Canada is a top education destination,” reads the report. “Chinese students in Canada hit a record 138,467 in 2017, accounting for 28 per cent of its international student population.”
While $1.45 billion is a high number, a recent report from the Canada Mortgage and Housing Corporation found that a perception of a larger surge of foreign investment drove up prices in Toronto and Vancouver in 2017.
“Sixty-eight per cent of respondents in Vancouver believe foreign investors have a lot of influence in driving up home prices while 48 per cent of respondents in Toronto believe foreign investors have a lot of influence driving up home prices,” reads the report.
At the same time, 48 per cent of buyers in both Vancouver and Toronto reported spending more than they budgeted on their home purchase last year, while 55 per cent reported experiencing a bidding war.
“The survey allows us to better understand how home buying is influenced by attitudes and perceptions, giving rise to sustaining local narratives,” writes CMHC analytics housing research senior manager Guillaume Neault, in a statement. “As we can see, psychological drivers can be at odds with economic fundamental drivers.”
It’s something that Juwai.com CEO Carrie Law has been saying for years.
“There is a myth that Chinese are buying vast numbers of properties in Canada and leaving them empty,” she tells Livabl, in an email. “This mystifies me and the Chinese families we work with. Some Chinese — like many Canadians — do have second homes in Canada, which of course are not occupied while the family is back in China, but it is rare that a Chinese family buys a Canadian home in order to do absolutely nothing with it.”