Chinese Buyers Rekindle Interest in Metro Vancouver Real Estate
The number of queries on Metro Vancouver real estate has recently soared judging by the numbers fromJuwai.com.this is coming after a slump in inquiries in the year’s first and second quarter.The report says searches rose from approximately 350 in the second quarter to nearly 800 in the third quarter.
This is coming nine months after the British Columbian government raised the foreign-buyer tax on Metro Vancouver homes to 20% of the property’s values.
However, Tina Mak, an agent with Coldwell Banker Westburn Realty in Vancouver, advised investors to take this news with a pinch of salt.
“As much as we don’t like to think so, Canada is not as important to China’s buyers as other places, especially the United States,” she said. She further states that enquiries through Juwai.com have gone up for almost every country because worried Chinese investors are trying to get money out of the country.
“We have seen an increase in inquiries from China buyers recently,” confirmed an agent Michael Hu of Re/Max Westcoast in Richmond.
Carrie Law, CEO and director of Juwai.com, said: “Our inquiry data shows that Chinese demand plummeted during the first half of the year. This matches the official data showing that foreign buying in Greater Vancouver was down to just 1% of activity in the first half of 2017. 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.”
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.”
However local realtors report that the increase in inquiries has not resulted in many sales.
Vancouver real estate agents say a drop in home prices this year has made real estate an unpopular investment for China-based investors.
“House prices are down 18% to 20% on the Westside, [compared to 2017]” said Faith Wilson, president of Faith Wilson Group, Vancouver, “So there is the [foreign-buyer] tax right there.”
Law agrees that Vancouver may appear a relative bargain for Chinese buyers.
“Vancouver still offers Chinese the prospect of homes or apartments at a relatively low price compared to similar property in China. The price per square metre for an apartment in downtown Vancouver is 37% lower than in Shanghai, according to Number," Law wrote in a statement to Glacier Media who had requested for the figures.
“In China right now there’s a great deal of insecurity about the real estate and economic outlook. Most middle-class and upper-middle-class Chinese owe much of their financial security to their homes and investment properties in China, which have appreciated massively over the past two decades. But determined government policy seems to be bringing an end to price appreciation and could even cause prices to fall for the first time. In addition, political changes, the trade war, and the falling currency combine to make Chinese very nervous about their personal finances.”