Global recession, weakening commodity prices, periodic forecasts by serious sounding pundits about the real estate bubble burst, all combined have failed to dent the strong Canadian housing market registering a high growth rate. The country's real estate has always been a subject of interest for foreign buyers as they witness investments, especially from China, having steady growth over the years.
What Do Chinese Love The Most About Canada?
Canada is ranked among the top most favoured locations and is the third largest destination for Chinese buyers next only to the United States and Australia. Byron Burley, vice president, developer and strategic sales of Juwai Limited, explains the most common reasons:
This is primarily due to Canada's strong education system, its safe and inclusive society, and the affordability of properties compared to the major cities in China and other big cities globally.
The top Canadian cities popular among Chinese buyers are Toronto, Vancouver, Montreal, Ottawa and Victoria.
The Chinese community in Canada is highly influential and deeply connected. Many potential Chinese buyers who consider Canada for investment purposes either have friends or families already living here. News about major Chinese corporations like Greenland investing in Canada or a trip by Chinese billionaire group in October this year are all keenly followed by Chinese businessmen all over the world.
In addition, word of mouth goes a long way in generating positive exposure for Canada as it is consistently ranked in global polls among the best place to live, work and play.
According to Burley the interest of Chinese consumers from 2014 to 2015 in Ontario has increased by 134 per cent, British Columbia registered 213 per cent increase while in Quebec it is 348 per cent.
Burley notes that Chinese are impressed with Canada’s education system. This is also a major reason why parents of Chinese students are looking for a home for their children to live in while they attend school. Other strong factors that attract Chinese to Canada are investment opportunities, friendly immigration policies and the lifestyle.
Toronto > Vancouver
Reacting to the Real Estate Board of Greater Vancouver's statement that home sales plunged 38.8 per cent in October 2016 as compared to the last year’s because of series of government interventions like a 15 per cent tax for foreign nationals buying residential property in Metro Vancouver, Burley comments:
The reaction from Chinese consumers can be seen in the number. The tax was announced in June 2016 but came into effect in August. In July, we saw a decrease in Chinese Consumer inquiries for Vancouver down by 48.8 per cent.
However one city's loss is another’s gain.
We have seen increased interest in Toronto, Seattle and Calgary since the foreign buyers tax was implemented in June.
Who Are The Buyers?
Juwai target customers are from Mainland Chinese consumers and Mandarin speaking Chinese who generally look for properties priced between USD $500,000 - $1.2 million. The majority of Chinese buyers look for good investments at a price that is fair for the market. Burley says they are interested in a wide variety of properties, ranging from residential to commercial an vacant land. But when it comes to residential buildings, they're more keen on buying new properties:
Chinese consumers have keen interest in newly, recently built or pre-construction condominiums in strong urban locations. Ideal properties are located near a good school district, public transportation and shopping. From our experience, we also know that Chinese consumers like new low rise communities in cities with stable markets. Cities that have airlines flying direct from China also benefit because of increased interest.
He welcomes and lauds the recent announcement of the increased number of immigrants to 300,000 that Canada plans to bring.
However at the federal level there hasn’t been a significant national level policy change to affect Chinese consumers and their investment in property.
Burley calls the international real estate market a buyer’s market. The prices of Mainland China properties in major cities are more expensive than the real estate in other parts of the world where the market is stable and progressive.
Juwai and Sotheby's
On Sotheby's International and Juwai partnership topic, Burley says Sotheby's International Realty brand is one Chinese consumers are familiar with:
Sotheby’s International Realty is a remarkable brand with very knowledgeable sales teams located in many countries around the world. The company also gets access to some really great properties that are well presented with strong marketing material and images. It certainly helps as consumers feel interested in well represented and presentable properties.
According to National Bank of Canada, in Vancouver Chinese buyers account for about 33 per cent of the market while 10 per cent of new condominiums bought in downtown Toronto belong to non-residents as per Canada Mortgage & Housing Corporation. Chinese buyers have influxed the Canadian market and that too has fuelled the market prices sharply and trend does not look having a slowdown in foreseeable future.