Chinese buyers coming back to B.C.
October 30, 2018
Online searches for Vancouver area homes by China-based buyers surged 130 per cent in the third quarter from the second quarter, according to Juwai.com, the largest China portal for foreign real estate.
In early 2016 it was estimated that about 11 per cent of Metro Vancouver homes were purchased by foreign buyers, but that plunged to 1 per cent after the B.C. government introduced a foreign buyer tax in August 2016 and then raised the tax this February to 20 per cent of a home’s value.
But economic turmoil in China due to the China-U.S. trade war, combined with a fall in Metro Vancouver home prices this year, has apparently convinced some buyers that Vancouver may be a safe investment destination after all.
Carrie Law, CEO and director of Juwai.com, told Glacier Media, “Our inquiry data shows that Chinese demand plummeted during the first half of the year. In the second quarter, Chinese buyer demand actually hit its lowest level since early 2015. It’s like a sinkhole opened up and swallowed all the buyers. That was the result of several quarters of plunging demand.”
A dramatic increase in inquiries turned this around in the third quarter, with searches up 130.8 per cent from Q2 and up 30.4 per cent over the third quarter of 2017.
Law said, “This is an upswelling of demand that we frankly didn’t expect. What we can’t tell you yet is how many of these buyers will go all the way and acquire a home, despite the foreign buyer tax. Given the time it takes to research and complete a transaction, those who do purchase should begin to show up in the official statistics only from the first quarter of 2019.” A further reason for the uptick in demand for Canadian real estate could be because Australia, which has banned major banks from lending money to foreign home buyers, and New Zealand, which outlawed residential sales to foreigners earlier this year, have made it much harder for Chinese investors.