The introduction of a foreign-buyer tax in two of Canada’s hottest markets, Vancouver and Toronto, doesn’t appear to be stopping Chinese investors from considering Canadian real estate.
In fact, Chinese buyer inquiries for Canadian properties have soared 30 per cent compared to a year ago, according to Juwai.com, a Chinese international property search website.
“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,” Byron Burley, Juwai.com Vice President tells BuzzBuzzNews in an email statement.
Juwai.com is a global platform based in China that allows homebuyers in the country to search property listings spanning 89 countries.
According to the company, the global Chinese buyer inquiry growth rate increased roughly nine per cent from a year ago — placing Canada’s rate well above the international level.
In the first half of 2017, the top Canadian cities Chinese buyers were interested in were Toronto, Montreal, Vancouver, Ottawa and Victoria.
However, this year Canada lost its global third place title in the number of buyer inquiries to Thailand. After experiencing a surge of inquiries this year, Thailand moved up from sixth place globally in 2016 to third place in 2017.
Although Thailand claimed the third spot in inquiries, Canada still receives more Chinese real estate investment than Thailand, when measured in aggregate value compared to number of inquiries. Juwai.com says this is because Thailand has a much lower average transaction price.
“The fact that Thailand has pushed past Canada as a favored country for Chinese investment doesn’t represent any loss of interest in Canada,” says Burley.
“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,” he adds.
Although Chinese interest in Canadian real estate is apparently growing further according to the Juwai data, the Ontario government says foreign buyer activity has dropped.
In April, the Ontario government introduced the Fair Housing Plan for the Greater Golden Horseshoe region, in an effort to cool the region’s sky-high real estate prices, particularly in Toronto.
One of the measures included in the plan is a 15 per cent foreign-buyer tax, similar to the levy introduced in Greater Vancouver a year ago.
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According to the Ontario Ministry of Finance’s latest data, foreign transactions accounted for 3.2 per cent of home purchases in the region between May 27th and August 18th compared to 4.7 per cent between April 24th and May 26th.
This represents a 1.5 per cent drop in foreign-buyer activity since the levy was introduced, a move the government says paid off.
“The measures that we introduced as a part of the Fair Housing Plan are working — we are seeing increased housing supply and evidence that more people are finding affordable homes,” says Charles Sousa, Ontario’s Minister of Finance, in a statement.
Even though foreign activity is down in the Greater Golden Horseshoe, Juiwai.com says Chinese buyers will continue to invest in Canada.
According to the survey results from Juwai.com, Chinese nationals say they primarily buy in Canada for personal uses, followed by investment opportunities and education.