Canada top destination for property investments by mainland Chinese buyers: report
House at 6011 Churchhill that sold for $4.5 million to a Mainland Chinese buyer. (Steve Bosch/PNG)
A large Chinese real estate website claims Chinese investors at home and abroad spent over US$100 billion on overseas property investments in 2016.
This is a 25% increase over Juwai.com’s 2015 estimate of US$80 billion.
The website named Canada as one of five top destinations for this record amount of money, after the U.S., Australia and Hong Kong.
The estimate includes purchases made by corporate and individual buyers and are based on the website’s own data as well as industry and government information, according to Juwai, which was started by Australian expatriates in Hong Kong and has offices in Shanghai and Guangzhou.
The Juwai report comes as new data released by the B.C. provincial government shows the total value of property transactions involving foreign buyers in May accounted for 3.1% of the total in Metro Vancouver, and six per cent across B.C.
Meanwhile in Ontario the provincial government said Tuesday that between April 24 and May 26, 4.9% of homes sold in the so-called Golden Horseshoe region were to foreign buyers.
Local critics and some in the real estate industry say keeping track of the number of foreign buyers like this doesn’t allow for understanding the amount of overseas money flowing into Canadian markets because purchases are being made with offshore trusts, shell companies and the use on land titles of proxy names to obscure the identity of beneficiary owners.
In particular, they cite a 2016 Transparency International study that says 50% of the 100 most expensive properties in the City of Vancouver are held by such means.
Others such as Sotheby’s International Realty Canada CEO Brad Henderson say that Juwai’s estimate of Chinese buyers spending “$100 billion all over the world, helps to put (their spending) into perspective.”
It’s a milestone to break through the $100 billion mark, but this figure isn’t significant compared to overall Canadian real estate sales, said Henderson. “It is only a very small portion,” he said.
Juwai said that by analyzing what information its users seek, it expects “2017 to be another near-record year for Chinese outbound property investment, although flows will likely be lower than in 2016.”
For example, in the first quarter of 2017, Juwai users made fewer inquiries than in the first quarter of 2016, but “almost an identical number of inquiries as in the first quarter of 2015, a year which set a peak only surpassed by last year.”
“Despite its torrid pace of overseas acquisitions in the last decade, China has been buying for such a short period of time that its investors have only accumulated a relatively small stock of overseas property and other foreign assets,” said the Juwai report.
Sotheby’s has been working with Juwai “to reach the Chinese market and to compile data on Chinese inquiry trends,” but did not participate in this latest report, said Henderson. “We want to know what buyers are looking for and understand their intentions.”
Sotheby’s aren’t the only realtors eager to connect more directly with buyers that prefer Chinese-language sources of information online. West Vancouver-based luxury realtor Malcolm Hasman advertises a connection with Juwai on his website. The real estate arm of American investor Warren Buffett’s Berkshire Hathaway announced a marketing agreement with Juwai in April.
Henderson said that aside from breaking the language barrier, Juwai’s ability to host sites on both sides of Chinese government Internet censors allows it to more readily upload listings information and offer a smoother browsing experience.