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Despite taxes on foreign real estate<\/a> buyers in the Vancouver and Toronto areas, Chinese interest in Canadian real estate continues to have an impact in both regions. In B.C., where the tax was introduced in August 2016, property transfers involving foreign nationals have been steady increasing during the last year, with much investment coming from China.
Ontario’s tax arrived in April 2017. The government says that foreign buyers accounted for 5.6 per cent of transactions in September, down from 7.2 per cent when the tax was introduced. Most analysts believe the trend in the Toronto area will follow what happened in Vancouver and that foreign investment will pick up again.
Oxford Properties, which owns 11 shopping centres in Canada, recently announced that Chinese visitors and recent immigrants can now use their WeChat Pay and Alipay mobile wallets in Oxford’s shopping centres, affiliated hotels and travel partners. The apps have more than 1.2 billion active users.
“Our Chinese retail customers have told us that tourists, students and newcomers alike want access to their mobile wallets in-mall,” says Brad Jones, head of retail at Oxford Property Group.
So, what’s the big attraction that’s bringing these Chinese visitors, immigrants and real estate buyers<\/a> to Canada?
Property portal Juwai.com says education is a major draw. China is the top source of international students who are studying Canada — there were 132,345 Chinese students enrolled in Canadian schools in 2016.
Juwai teamed with Sotheby’s International Realty Canada to find out why Chinese home buyers want to come to Canada. Juwai conducted a survey of more than 4,000 Chinese international property buyers in 2017.
It says the cities with the most Chinese buyer interest in the first half of 2017 were Toronto, Montreal, Vancouver, Ottawa and Victoria. Canada currently ranks fourth in Chinese buyer interest, behind the United States, Australia and Thailand.
“Education has long been a prime motivation for property investors from China to buy homes abroad and Canada is one of their perennial favourites, as its world-class education system holds massive appeal for Chinese students and parents for several reasons,” says Juwai. “With Chinese being a huge stickler for top grades and quality, Canada’s education is certainly right up their alley.”
The report says Canada’s government updated its visa system so that graduates of Canadian universities got extra points when studying for Canadian Permanent Residency. International graduates from B.C. universities who qualify for a post-graduate work permit can be exempt from the foreign buyer’s tax, says the report.
Tuition rates in Canada are also lower than in other countries. They were 42 per cent cheaper than in the U.S. in 2016, says the report.
The Sotheby’s\/Juwai report cites other reasons why Chinese investment remains strong. First, follow the money.
“In spite of the strengthening of the Canadian dollar, interest from international buyers hasn’t waned,” says Brad Henderson, president and CEO of Sotheby’s International Realty Canada. “Relative to other cities, Canada’s main cities continue to offer<\/a> considerable real estate value.”
Seventy-nine per cent of Chinese home buyers surveyed cited low cost per square foot\/value as a key criterion in their purchase.
“When we did this same research a year ago, safety was the top factor. This year, value has knocked safety out of the top spot,” says Carrie Law, CEO of Juwai.com. “This may be a result of the stepped-up enforcement of capital controls, which has caused some families to squeeze their budgets to reduce the amount they need for their down payment and ongoing costs.”
Safety came in as the second most-important factor — both as a safe haven for investments and for personal safety.
“China has relatively high standards of public safety and low rates of crime and violent crime,” says Law. “The Chinese media are full of stories of mass shootings like in Las Vegas, terrorist attacks like in France and criminal attacks on Chinese like the beating to death of Ji Xinran in Los Angeles a few years ago. Chinese parents sending their child overseas to study or work naturally worry, as any mother or father would.”
Sixty-nine per cent of survey respondents cited “convenient to shopping, entertainment, activities” as a key factor.
The report says the assumption that Chinese buyers are looking only for high-end real estate is incorrect. Most buyers are looking for properties at or below the average sale price of residential properties in the local neighbourhood. Only 17 per cent of survey respondents cited “prestige and exclusivity” as a factor of importance in their house-hunting.
Ranking next was “property rentability” followed by low maintenance cost, proximity to good schools, construction quality, yard\/land size, community amenities (parks, golf course) and ethnicity of the community (at 39 per cent).
Ranking at the bottom of the list with fewer than 20 per cent were multigenerational living, character\/uniqueness of property, energy<\/a> efficiency, property customizability and accessibility to friends\/family.<\/p>\n The survey also says that Chinese purchasers prefer new construction homes to existing or remodeled homes.\n\t\t<\/p>\n<\/div>\n Realtytimes <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"
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