Chinese homebuyers are showing increasing interest in Canadian real estate again — just not in the in the same places as they were before, a new report suggests.
Juwai.com, a real estate portal that connects residents of China with homes abroad, says Chinese enquiries into Canadian properties increased 8 percent last year compared to 2017, when demand was stagnating in the wake of the introduction of two separate foreign-homebuyer taxes in major urban centres within a span of 12 months.
In August 2016, the BC government imposed a 15-percent tax on non-residents purchasing residential real estate anywhere in Metro Vancouver. Ontario followed suit in April 2017, slapping its own 15-percent levy on the Greater Golden Horseshoe, which encompasses Toronto and surrounding municipalities. Starting February the following year, BC expanded and increased its tax to 20 percent, covering a larger geographic area.
The moves followed media reports and other speculation that foreign nationals were driving up home prices in Canada’s most expensive cities.
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The subsequent measures are one reason Chinese buyers are turning away from Toronto and Vancouver to different Canadian markets, suggests Juwai CEO Carrie Law in a statement. “With steep foreign buyer taxes and high prices in Vancouver and Toronto, we have seen an increasing number of Chinese buyers shift to other cities in Canada,” explains Law, also director of the company.
Chinese buyer enquiries into Vancouver properties declined 2.8 percent on a year-over-year basis in 2018. Over the same period, they fell 10.3 percent in Toronto.
Meantime, enquiries were up 394 percent in Halifax, 234.4 percent in Calgary, 35.7 percent in Montreal and 32.5 percent in Ottawa.
Law puts the Halifax and Calgary gains in perspective by noting respective market sizes. “These growth rates appear startlingly high because Chinese buying in Calgary and Halifax during 2018 grew from such low numbers,” he explains. “Doubling a small number gives you 100% growth but leaves you with a product that is still small,” he adds.
Halifax and Calgary were only on the radar of a “relative handful” of those based in Mainland China — until 2017, at least. “And many fewer purchased property in them,” Law adds.
As well as the lack of foreign-homebuyer taxes in these markets, the comparative affordability they offer has sparked recent interest.
Local real estate industries have gotten better at selling the cities to an international audience. “They are successfully marketing local real estate in terms of affordability, lifestyle, and educational institutions,” says Law.
Juwai anticipates enquiries this year will grow at a similar rate to what was observed in 2018, barring political factors discouraging investment abroad or future Canadian policy moves that impact foreign-homebuyers.