Paul Shen can tick off the reasons Mainland Chinese people buy property in Canada as surely as foreign investment in vancouver fast-talking B. Some long to escape the fouled earth and soupy air of their country’s teeming cities, he explains, while others are following relatives to enclaves so well-populated by other Chinese expats they hardly feel like foreigners.
The richest, of course, regard homes in the West as stable vessels for disposable cash, but Shen lays no claim to such affluence. Last spring, the 39-year-old left behind his middle-management advertising job in Shanghai to seek the dream of home ownership he and his wife couldn’t afford in their home city. We can make the house dream come true in Canada. The starting point was one-half of a modest duplex near downtown Victoria, close to the university where his wife is seeking a master’s degree, and priced about right for their limited means. Selling points ranged from the quiet of the street—perfect for their six-year-old son—to the stunning Vancouver Island vistas all around. High on his list, though, was Victoria’s comfortable distance from the bustling Chinese communities of B.
It’s hard not to smile at his idealism. Substitute any one of two dozen nationalities, after all, and you have a chapter in Canada’s cherished narrative of migration, settlement and shared prosperity. In the past five years, the flow of money from mainland China into Canadian real estate has reached what many consider dangerous levels, contributing to a gold-rush atmosphere in the nation’s leading cities, while stirring anger among young, middle-class Canadians who feel shut out of their hometown markets. Its impact on Vancouver’s gravity-defying boom is the best known—and most hotly debated—example, as eye-popping price gains leave behind such quaint indicators as average household income, or regional economic activity. Justin Fung, a software engineer and second-generation Chinese-Canadian who counts himself among those frustrated by Vancouver’s surreal housing market. Yet the amphetamine rush of Chinese cash has been felt far beyond the disappearing pastures of the Fraser Valley—especially in the last couple of years.
Meanwhile, Chinese developers have made buys in locations that have left analysts scratching their heads, including Nova Scotia’s remote Eastern Shore and an abandoned mining town in the B. But the broader incentives are easy to see. Next to China’s own volatile real estate markets, property almost anywhere in the Western world can seem an island of financial sanity, says Matthew Moore, president of Juwai’s North American operations. All of which has landed Canada in an economic paradox. In Vancouver, and increasingly Toronto, fear abounds that Chinese money has helped inflate a property balloon of Hindenburg proportions, driving house values out of reach for even well-off professionals, while raising the risk of a crash at the first sign of adverse conditions.
May 3, 2016 – Vancouver, B. House for sale signs with Mandarin or Cantonese. How far we’ve travelled down this bejewelled highway is only starting to come clear. The CMHC’s latest condo numbers tracking the ownership of condos were part of a concerted effort on the part of the Crown corporation to measure the phenomenon, based on its mandate to gather data on housing, and to foster market stability. The agency has been roundly criticized in the past for Canada’s dearth of dependable real estate statistics. CMHC’s plan now is to produce a more comprehensive report by the fourth quarter of this year, says chief economist Bob Dugan, capturing not just condominiums but all forms of residential property. Gathering the data requires co-operation on the part of everyone from provincial property registries to local realtors—not all of whom are eager to shed light on their lucrative sources of new-found income.
The CMHC’s current definition—an owner who does not reside in Canada—excludes all kinds of domestic arrangements under which foreigners purchase homes abroad, suggesting the recent condo numbers understate the influx of outside buyers. It’s common for foreign-based buyers to send their children and spouses here while remaining in their home country. Yet even the crudest measurements suggest a breathtaking upsurge in interest that would rate Canada’s big cities on par with London and New York in the eyes of Chinese buyers. 12 billion on real estate in Vancouver, accounting for 33 per cent of the city’s sales. 4 billion, representing 14 per cent of sales.
Other analysts have dismissed the estimate, which Routledge produced by combining U. Related: What’s the point of Vancouver? At least part of the message is beyond dispute: the cash flowing out of China into assets around the world has hit tsunami proportions, driven by fears of a slowing economy and a declining currency. 1 trillion, up more than sevenfold from 2014.