More and more Asians are looking to Canada for real estate opportunities. So much so that it’s becoming increasingly important to attract these buyers.
As this Globe and Mail article points out, inquiries for Canadian homes on Juwai.com–a real estate search engine that lists properties from around the world for Chinese buyers–jumped 134 per cent in the first quarter of 2016 from the previous year.
The spike comes during a period of uncertainty in the Chinese economy and stock market. And Chinese aren’t the only Asian buyers interested in the Canadian market. There has been growing interest from the Taiwanese, people from Singapore, citizens of Hong Kong, and other countries in the region.
A Safe Bet
In many instances, Canada is seen as a safe investment in uncertain times. Our economy is strong, the returns on property investment are high, and our government is stable. According to Richard Silver of Sotheby's International Realty Canada, Canada has the added bonus of personal property laws.
The big thing that people mostly have to be aware of, and what makes Canadian and American real estate look very good, is that most of the land in Asia is lease-hold. That means that you can't own property as such for any length of time, you lease it on a ninety year lease, or a sixty year lease, or a fifty year lease. It's not full ownership the way we have it here or in the United States, so that really makes our market look pretty attractive.
Jim Burtnick, broker, SVP of Sales, Sotheby's, agrees with the sentiment. He says there are many reasons Asian buyers are attracted to Canadian real estate, one of them being that Canada is simply safer than their home country and it's well know for it's diversity:
I think in many respects people see it as an accepting place where they're welcome to practice their religion and speak their language.
With growing demand and a seeming endless supply of interested buyers, it’s important for any good agent to know how to appeal to these customers.
Asian cultures are different from Canadian in many ways. But that doesn’t mean you should shy away from them. There are many advantages to reaching out to new community groups. But you have to be careful and learn as much as you can about their customs, to be prepared for the encounter.
So how do you make sure you don’t offend anyone? A list of important things you should take into consideration can be found here. But we wanted to dig a little deeper.
This is a Chinese philosophy that believes there are many benefits from harmonizing people with their surroundings. The philosophy can be applied to things as important as religious temples to things as inauspicious as a family home. According to Tracy An, Sales Representative, Sotheby's, there are a few things Chinese buyers will pay attention to while browsing for the house, things one outside the Chinese community might find odd. For example, what the house faces and where the staircase is in the house. Another thing is, if the address number ends in 4, that might just be enough for the buyers to decide not to buy the house. The number four is considered to be unlucky in China, because it sounds similar to the word for "death".
On the other hand, number six and eight are considered to be lucky, six sounds similar to "fluid", "happiness", or "blessings" and eight sounds similar to "prosper", "wealth" and "fortune".
So if you’re selling 44 Main Street to Chinese buyers, An says there’s a good chance it will sell for less than number 46, right next door.
The importance of numbers isn’t reserved for mailing address though. As Burtnick points out, people will even pay attention to the price of the listing.
If I were listing a property for sale that I think I was targeting for Asian clientele I would put a lot of 8's in the asking prices. So, for arguments sake, $9,888,888, to catch their eyes.
Burtnick and Richard both tell stories of hiring Feng Shui experts to come in and help them with a property. Feng Shui experts will come in, make recommendations, and certify the property. They’re very well-regarded within the community, says Silver.
He once had a house for sale in a predominantly Chinese area, but it just wouldn't sell.
The problems with the house were:
- the location of the tree in the front yard
- a curved staircase
- when you came in through the front door you could see right through out the back window to the garden, which means the money's going to come in the front and go out the back.
Feng Shui turned the whole situation around, says Richard.
We had a Feng Shui Expert come in and he made some changes to the furniture and put in a few things and certified the house. Within a week of that it sold. It had been sitting on the market for the two and a half months prior to that.
Silver says that presenting a business card is very tricky. That’s because there are a lot of do’s and dont’s when exchanging business cards in Asian societies.
The way you present the business card is a way of showing respect to the other person. You of course hand your business card to the other person by using both hands and by focusing it and putting it in a place where they can actually view it. And then it's received by the other party in both hands and they read it first before they even look at you or say hello. So it's very traditional.
How to present a business card to the Chinese:
- hand your business card to the other person by using both hands
- focus it and put it in a place where they can actually view it
- it's received by the other party in both hands and they read it first before even looking at you or saying hello.
- don't put it in your pocket immediately.
Tradition is part of many aspects of Asian culture. This is especially true when it comes to food. Hosting and being hosted is important when doing business in Asia. This can often mean trying food that seems unusual to Western palates. According to An, if you want them to accept you, you have to accept them and that also means you have to accept their culture and customs, including food.
An, who was born in China, speaks gleefully of her recent Asian trip with Richard and watching him try so many new types of food.
Richard's been very brave with food. Any part of the animals. So last year we were in China and he would eat any part on the animal. Like chicken feet. He tried pig stomach. And the duck blood. It's just delicious, I'm telling you.
For Richard’s part, he says he enjoyed the experience. And this isn’t something that’s restricted to oversea trips. Richard says you’re just as likely to encounter exotic foods here in Toronto. He recently closed a deal with a Chinese couple and they all went out to celebrate.
We took them out for dim sum, so yesterday for the first time I tried eel. I hadn't tried eel before, so I tried eel and I just sort of jumped in and did it. And it was quite good! It was tofu and eel and if somebody were to have said to me I'd be eating eel earlier in the week I would've said 'no! Are you kidding?'
It’s also important to always bring gifts when conducting a business in Asia. According to An, if you're visiting China as a business group, at the end of each meeting comes a gift exchange. She says it’s most important to make sure you have gifts for the boss.
You always have to cover that person (the boss). Even though you might not see him or talk to him, he's not the person you really worked with.
An says the amount of money you spend depends on the person’s class and how well-regarded they are. Class is very important in Asian cultures. But An says if you just pay attention and be respectful you should be fine.
Expand Your Team
If you’re going to do business in Asia, especially China, you need to have someone who speaks the language. The fact is, the biggest pool of Asian buyers are currently coming from mainland China. Richard says having someone who can communicate with them increases your chances of doing business:
There has to be somebody who has 'cultural affinity'– so you may not have to speak Mandarin, but you need to have somebody on your team who does and who understands the difference in culture.
Recognize The Differences
But we’re not just seeing Chinese buyers coming to Canada. There are people from all over Asia flocking to the Great White North, and Burtnick says it’s important to understand the cultural differences. He explained the differences for our readers:
- British-based, so they understand the types of law that are in Canada, that are based upon English-law; tort law
- they're pretty sophisticated business people
- they've been in the capitalist environment for quite some time and are well-versed on how things operate in North America.
- between capitalist Hong Kong and the rest of China
- not as spend-thrift as the Chinese
- sophisticated money managers
- their wealth is recent and new so people are not that used to dealing with money
- a bit more spend-thrift
Celebrate The Differences
Asia is a giant market for Canadian real estate. It can be trying to tap into that market–to navigate the cultural differences and remain respectful of everyone involved. But at the end of the day, Silver says, it’s a great opportunity for everyone involved.
I would just encourage people to not look on it as a chore. It's actually just going to open up a lot of new experiences and excitement for them.