Interest in Canadian real estate is back up among Chinese home buyers. But a new report found that properties in Canada’s biggest cities, Toronto and Vancouver, are no longer the highest in demand.
Chinese buyers are now flocking to properties in Halifax and Calgary, according to a report by Juwai.com, a real estate portal that connects Chinese buyers with international listings. In 2018, interest in Halifax shot up by 394 per cent, while interest in Calgary grew by 234.4 per cent.
“With steep foreign buyer taxes and high prices in Vancouver and Toronto, we have seen an increasing number of Chinese buyers shift to other cities in Canada,” Juwai CEO Carrie Law said in a statement.
Interest in Canadian real estate fell among Chinese nationals after the introduction of the foreign buyers' tax in Vancouver and Toronto.
Initially, a 15 per cent tax was imposed on non-resident purchases in the Metro Vancouver area in 2016. However, the tax increased to 20 per cent in 2018, and its geographic restriction expanded to include areas like Fraser Valley and Nanaimo Regional District.
In 2017, the Ontario government also imposed a 15 per cent tax on non-resident purchases in the Greater Golden Horseshoe area, which includes the GTA.
As a result, enquiries by Chinese buyers into Toronto properties dropped by 25 per cent in 2017, and fell by 18 per cent in Vancouver that same year, the Canadian Press reports.
Despite this, there is renewed interest in Canadian real estate among Chinese nationals. From 2017 to 2018, enquiries into Canadian properties increased by eight per cent, according to Juwai’s report.
Additionally, enquiries in Toronto and Vancouver only declined by 10.3 and 2.8 per cent, respectively, year over year in 2018.
Besides the foreign buyers' tax, there are other reasons why Chinese nationals are now looking to Halifax and Calgary for Canadian property, Law said.
“[Canadian real estate businesses] are successfully marketing local real estate in terms of affordability, lifestyle, and educational institutions,” the CEO explained. Thus, cities like Halifax and Calgary are finally on the radar of prospective Chinese buyers.
A previous Juwai report conducted in partnership with Sotheby's International Realty Canada found the primary reason Chinese nationals want Canadian real estate is for education purposes. Specifically, 41 per cent of those surveyed in 2016 noted this.
The second biggest reason, according to the data, was for “personal use,” followed by investment.